emily: i am emily chang in san francisco. this is "bloomberg technology." the dream force conference. we hear from an outspoken ceo on his new co-ceo, and the responsibility tech leaders have to shape the world. plus, filtering out. instagram founders are leaving facebook. this is raising concerns about the future of the platform and its competition with snapchat.

and, the google ceo heads to washington to meet with washington officials behind closed doors. can he convinced there is no left-wing bias at google? salesforce kicks off its dream conference with a record 100,000 . attendees.- 100,000 the cofounder has bought time magazine and he is open be salesforce tower, the tallest building west of the mississippi, and he's taking on a co-ceo. we sat down with him on a wide-ranging interview. he did not hold back his strong opinions. asking why he decided to share his job and title with his new co-ceo. >> he is fabulous and has been with us for five years.

and ia great operator feel like he needs to be recognized. the company-ceo and is now more successful than ever. emily: co-ceos have not necessarily worked out because it is harder to be decisive and efficient. how do you avoid those challenges? marc: those are things i tend to be ok on so i do not think they will be issues. we already have a great relationship, and because of that, giving him the title really was how we were running the company in partnership. i have been running salesforce for 20 years. me most important thing to is the success of our stakeholders, customers, employees, partners, public schools. that is what i focus on.

i'm excited keith is now co-ceo with me. emily: there were reports that salesforce was interested in buying twitter. investors did not seem to excited about that. do you see the possibility of salesforce having a consumer facing subsidiary someday? marc: today, we have billions of users using our products in one direction or another. the most important thing to me is that i am managing for all of our stakeholders and that i'm listening deeply. investors are one of my key stakeholders. customers are a stakeholder, employees are stakeholders, public schools are stakeholders. investors are stakeholders, and i will meet with them. when i meet with those investors, i am deeply listening to them. when they said we would like you to buy this company or do not buy that company, or we want this relationship, i take that seriously.

we have been a public company 14 years. we listen to them. if you look at our stock chart over the last 14 years, the reason it is up and to the right is because we listen deeply. emily: what does the m&a future look like and you have interest in buying twitter? marc: i look at every company. we have to evaluate every deal and look at private companies, public companies. we just acquired a couple of amazing companies. we bought an amazing company through which we are able to do marketing analytics in an amazing new way. we have a whole new vision of customer success. for $7ht the company billion and we are deeply integrating that product. it is incredible and one of the reasons we raised our guidance

again and why we are so excited about our futures. you will continue to see us deals -- do deals where it makes sense for customers and helping to get our customers to connect with their customers in a new way. marc: facebook bought instagram six years ago and we know the founders are leaving. this was a big bright spot for the company. is that a bad sign for facebook that something has gone wrong? marc: it is a sign for them and they need to pay attention. i have been talking about this for nine months. our industry has changed. every seo needs to ask himself -- ceo needs to ask himself what is the most important thing to you and your company? what is your highest value? ours is trust. nothing is more important than the trust we have with our customers, employees, partners, top executives. when you see top executives walking out and customers questioning your privacy practices or how you are using

or misusing their data or misusing partnerships, you need to listen and wake up and say what is going on. it is very serious. i will not call out any one and say that company has to change, for these executives have left -- or these executives have left. we have seen what the employees have said, we need to operate at a higher level. we just created a new office of ethical and humane use reporting to me. when employees have concerns or customers or partners, or other stakeholders, i want them to come to me and have that conversation. we are in the fourth industrial revolution. to know, if your product being used ethically and humanely. every company has to operate at a higher standard. every enterprise company like us , and every consumer company like facebook and others.

every ceo has to look at this very seriously. that is why the government is involved. i called for regulation in january. emily: you said facebook should be regulated like big tobacco. that was before cambridge and elliptica -- cambridge analytica. how do you think they should be regulated? marc: facebook is the new cigarettes. addictive, not good for you, and consumers need to be aware of what can happen. that is what the government is involved in needs to be more involved in the regulation of facebook and other social media companies. in the example of companies that have questions about our their products being used to mainly, -- are their products being used humanely, they need to look at that. technology is not good or bad. it is how you use the technology that matters. you have to be crystal clear

with your employees, customers, partners, with everyone on what are your values are -- your values are. examples of top executives leaving and you have been reporting on that. you will see more on that until ceos change. they need to change and pay attention. emily: do you think mark zuckerberg is not paying attention? toc: every ceo has to get another level of excellence. in the fourth industrial revolution, we are all connected. everyone and everything is connected. look at this show. when everything is connected, everything is changed. behind all of this is our core values. our company is built on trust. those companies have to articulate what is important to them, what are they willing to stand for.

then, we know if they are acting correctly because their employees will stay and executives will stay. you will not have that question. it should not be that question that any reporter or ceo has to ask. we have to look at this deeply. emily: you have had employees be critical of the work you do with u.s. border protection. there are protests happening outside and we heard customers are not happy. what is your response to that? marc: this is a moment in where i and every ceo has to deeply listen to every stakeholder. outside ofe show up the conference, even if we have 170,000 people, i do not dismiss them. i engage with them. every employee or everyone asking a question, i have

called. heard, areat, i have you deeply committed to the humane use of the technology? wow, yes i am. i have created a whole new structure in the company, a whole office of humane use run by our chief equality officer. we have partnered with leading ethics organizations in the world to build a structure that we can bring everyone in and have this conversation. this conversation is not going away. now that technology is at the center of everything we do, ethics are at the center of everything we do. every ceo will have to answer that question, are you operating ethically and humanely. you bought time magazine and you said you would not get involved in editorial decisions but you have strong views. how do you plan to run this magazine? an opportunitybe

to take a moral stand? marc: my wife and i could not be more excited about the opportunity to be the stewarts of this historic and iconic brand. our whole history of the nation ofreflected in the covers time magazine, of the editorials, the stories, the photographs. it is amazing what they represent, in the opposite duty -- the opportunity to acquire the company was something we could not pass up. i hope it will continue to be a positive global impact, the way it has been for a century. i hope we can usher it into the next century. how can we be sure your political views will not have an influence on the coverage that time does? marc: we are committed to keeping our relationship with time magazine at arms length. the editorial team is one of the

best in the world. everyone knows that. we will maintain that editorial team and leadership, and deliver a world-class product. it will be a fabulous opportunity for us to unshackle time and let it run as an independent organization. it has been a long time since time magazine could do whatever it wanted. now, we will see this amazing team and let them go and do something incredible. have a co-ceo, and iconic magazine, and you continue to focus on your philanthropy. would you consider running for public office? greatestis the platform for change. our opportunity to change the world is here. we can see our politicians are fundamentally not able to do that. the opportunity for change today is with business. had toitical structure be a public, private partnership.

the mayors were just year and the superintendence of schools were just here with local officials. let's bring everybody together. let's create a more positive world, together. this is how we create multi-stakeholder action. you do not need me as a political official, i would not be a good one. you know me well. the reality is, emily, i feel empowered and able to make a positive impact on the world based on the platforms i have been given and i am grateful. emily: salesforce has done the hard work to close the pay gap. now we hear about the equity gap across the industry's and in silicon valley especially. what is the hard work you are doing year after year to make sure the pay gap and equity gap does not widen again? marc: every ceo needs to be focused on equality. at this show, you can see right behind us, we have the most diverse of and inclusive set of

customers and partners, and employees in the industry. we are working to make it even more so. that is one of the key equity gaps i see bringing everyone in. having true inclusive capitalism. we are also fighting for gender equality so every man and woman is paid equally. we are fighting for lgbtq equality. we are working to make sure we have the equality of every human being. and that is not just the qualities of san francisco. everywhere we go, we have the same set of values so we will try t -- we will fight for that. you cannot separate our core values from salesforce. emily: you have committed to doing audits every year, right? marc: yes. emily: when it comes to pay. talk to me about the work that involves. marc: it is a huge amount of work to pay attention globally.

are you paying a men and women the same? the first time we did the audit, we were not and it cost us millions of dollars. why are we paying men and women differently? we did a second audit and you know what we found? we had a mismatch. when you buy a company, you do not just by their technology and culture, you buy their pay scales. guess what happens, we bought this mismatch so we leveled it out. every year we will guarantee that we are paying men and women equally in this company. we have asked all of our customers and partners to do the same. emily: that was marc benioff speaking earlier at the dream force conference in san francisco. coming up, we heard marc benioff on his take of instagram founders leaving facebook. we now dig into what led to this departure and how

announcement was taken. if you like bloomberg news, check us out on the radio. listen on the bloomberg app, bloomberg.com, and, in the u.s., sirius xm. this is bloomberg. ♪ omberg. ♪

emily: instagram's cofounders unfriended facebook. they are leaving over growing tensions with mark zuckerberg. been at the company since facebook acquired instagram and they have been able to operate independently of facebook and mark zuckerberg. lately, they have become unusualed with an uptick in day-to-day involvement with zuckerberg who is now more reliant on instagram for facebook's future growth.

i want to bring in sarah frier reporting on this. what happened? thatu are absolutely right facebook is so much more dependent on instagram now than ever. facebook's own growth is going to slow. they will have to spend more to grow. instagram is so crucial to that picture. it just hit one billion users but there are more users it could add. the advertising business is thriving. there has been a lot more attention paid to the ways instagram drives traffic to facebook. it is a new dynamic. --the past, facebook instagram was dependent on facebook for its growth. now it is the other way. emily: two years ago, i sat down with kevin and asked him, do you regret selling? facebook bought instagram for billions of dollars.

he said no. he talked about all the great things facebook did for instagram and how great it was to work with mark zuckerberg. take a listen. >> think of it like having the best board member in the world. imagine how many companies would like to have mark zuckerberg on their board. that is what we get. but you getndent, amazing guidance and counsel from someone who has tilt a tremendous company -- built a tremendous company. fast-forward to today. he said we are planning to leave instagram to flex our creativity in a statement. missing from the statement was anything about mark zuckerberg. what i thought was fascinating about the statement was that at the end he said something to the tune i wish the best of luck. sarah: they are the same

company. when the founders leave instagram, it is no longer this company in facebook. it becomes more of a facebook product arm. there is no one to challenge zuckerberg's vision should they want to and say this is not where we see instagram going. instagram has been very stubborn in terms of the products and vision for it and what they wanted to maintain for the culture. this opens up opportunities for zuckerberg to do more, to integrate instagram. it could threaten this unique brand the company has built. emily: mark zuckerberg did say that they were both extraordinary product leaders. he said i've learned a lot working with them and really enjoyed it. i look forward to seeing what they build next. the whatsapp cofounders have left the company as well. tried to kick off

his #delete facebook movement. this does not look good. what are employees telling you? are they seeing the tension? ,arah: the whatsapp situation the founders being replaced, that was heralded as a actionally -- potential toward instagram if they were not careful. there is definitely concerned about what happens now. i'm told the most likely person to take over instagram from here is someone who previously ran facebook's newsfeed and was hired by kevin to become instagram's head of product. and the ceo is back into facebook. sarah: so they have lost their ceo, cto, coo. are there going to be any sea level people in the future -- c

level people in the future? they have to think about how quickly they want to instagram -- integrate instagram. emily: we look forward to hearing what you find on your continue reporting on this. coming up, uber drivers are dealt a huge blow as a judge blocks thousands of drivers from suing for better pay and benefits. and "bloomberg technology" is streaming on twitter. technology and be sure to follow our global news network, tictoc, on twitter. this is bloomberg. ♪ . ♪ .

emily: it is a major loss for uber drivers. a federal appears court barred hundreds of thousands of drivers on suing for better pay and benefits. the ruling was not unexpected. in may, the supreme court bolster the power of individual arbitration instead of class-action lawsuits. amazon has come up with another

way to get alexa into your home. they are investing in a $6.7 million funding round for a company that makes module that can quickly be assembled into a home at a jobsite. amazon is making its investment into the alexa fund. the faang stocks could be adding a letter. one analyst told clients on tuesday that square should be the newest member. they highlight their boy and boyent volume -- payment volume. they spoke to sarah frier about the growing company user base. after ducking a congressional testimony, the google ceo is heading to washington. can he quell a rising wage -- wave of anger directed at the search giant? that is next.

this is bloomberg. ♪

emily: "bloomberg technology." -- it will allow regulated cryptocurrency. google said advertisers will need to be certified with google's -- with google for the specific country in which the ad will serve. staying with google, the company has been a favorite punching bag of conservative politicians of late. first player -- president trump claiming of news and search were biased against him and republicans.

for not sending its leaders to testify on capitol hill. be meeting with lawmakers to defend google saying in a statement, i look forward to meeting with members on both sides of the aisle and answering a wide range of questions and explaining our approach. the meetings will continue google's long history of engaging with congress am including testifying seven times to congress this year. to discuss we have been brodie who covers tech lobbying and tom giles. will testifypichai at some point this year after the midterm elections, but what can you tell us about this meeting with lawmakers and what might transpire there? ben: the focus will be on two things. one is the allegations of anti-conservative i is that you

talked about. that sort of punching bag we have had here. i think some of those concerns are genuine, at least on the part of lawmakers. has to do is convince those lawmakers and talk about their approach, as you said. it came about because of something else, being able to talk about what goes on there, but it's always a little bit of a lack box, and that does worry people. the other thing i expect to be huge issue is the attempt to get back in the chinese market. i think that will be a major talking point. kevin mccarthy tweeting, the mayor can people deserve the facts, these platforms should clearly know what is news and opinion. he was we tweeting a tweet from president trump's 2020 campaign manager. how much of an uphill battle is google going to be fighting here? this is after video leaked of

sergey brin telling the entire company that he found the election of donald trump offensive. out, theypointed didn't find a high enough level executive. he really has his work cut out for him. google's strength is to blind and with science. they need to come in and explained that our algorithms don't favor one side or the other. they can also remind them that the platforms very much, have a way of disseminating a lot of right-wing points of view. they happen a platform that the trump administration has been able to use to its advantage. these are things that google needs to emphasize. they also need to bring it back to the question of the public good. do we do the public good? what are the services that google provides to the consumer free of charge and how does the consumer benefit from that? is society better off or worse

off for us being there? that something google executive needs to emphasize. they: google did not skip testimony without understanding what the consequences would be. is it a smart strategy that they separated themselves from the social media company, which has certainly been getting dragged down. they are not in the same boat or the same business. including not going a couple of weeks ago, did it work in google's favor? ben: it's possible that is the case. we have been concentrating in washington on facebook and they have taken a lot of that he. i think -- i think things really did turn a couple of weeks ago and i think it was a little bit of a miscalculation and we are really focusing on google now. the advantage pichai will have when he testifies openly in november is republicans may not be looking as much for that punching back as you mentioned, because it will be after the midterm elections. is weoblem he will face

believe he will be testifying before the house judiciary committee. he has the option of the senate intel committee. it has been relatively bipartisan, hasn't really been looking at political bias and thinks of that nature. the house judiciary committee is really sort of double down and held a number of hearings on alleged and the conservative bias. i think he would face really some tough and possibly fractious questioning their. they: we've been following department of justice decision to take a closer look at big tech. attorney general jeff sessions met with the attorney general to talk about things like privacy. we caught up with the attorney general of california after that meeting. take a listen to what he had to say. >> the conversation really focused on the issue of competition in the whole issue of antitrust and privacy. a great deal of conversation about privacy. many states i believe are interested in trying to make sure that our consumers are as

protected as possible it comes to their personal information. we see what happens when some of the personal information gets out there in the public sphere. we want to make sure we can keep that information for that person private. emily: after the meeting today, they decided not to open an investigation. onenot, and does it mean could not be opened at some point later? an investigation could basically be opened at any point. lots of justice departments often like states to continue doing what they are doing and there are states that are probing these privacy concerns as well as possibly some anticompetitive concerns. one of the interesting things that came out of the meeting was the idea that attorney general jeff sessions may believe the antitrust law is a way of confronting this alleged anti-conservative bias. that would be out of the mainstream, certainly out of the legal mainstream, if he did believe that.

meeting i took from the is that the focus here seems to be on consumer protection and privacy. it seems like the states increasingly will be talking to one another as they look into things like cambridge analytic a or the google location sharing. newy: tom, are we facing legislation? and the big area the ag wants to steer clear of is the whole idea of political bias. one to start legislating that, you start legislating free speech and you want to steer clear of that come as much as jeff sessions wants to try to bring it around to this bias, this censoring of opposing views. not want to get into the business of censoring and dictating to facebook and google and other platforms here is what you can and cannot do. there is really no legal basis for it. which is why keep hearing them come back to privacy and

antitrust. i know we will continue to follow all of this and new developments. coming up next, our exclusive conversation with the ceo of j.crew and why amazon is the perfect partner. plus, qualcomm versus apple. the long-running legal battle heats up with yet another accusation of intellectual property theft. is there a chance for settlement? this is bloomberg. ♪

j.crewlast quarter,

broke 15 consecutive quarters of negative sales. the last two weeks the ceo relaunched the brands. he sits down for an exclusive interview and discusses the company's recent decision to sell its mercantile grant on amazon. >> everly don't believe we compete with amazon on the main j.crew . i see the products that are being sold on amazon as more value-oriented. mercantile really is a new brand as well. it is geared toward the younger customer, still with the preppy spirit and a greater value. and we felt like amazon was the perfect home to launch that new brand. make sure not worried about cannibalization? are you concerned about how they might use your sales data? have a stronge

partnership with amazon and i believe that we will maximize the sales for mercantile by growing j.crew mercantile. furtheru envision j.crew brands being sold on amazon? jim: not at the moment. >> you developed a number of other third-party relationships. how big a part of the business do you see wholesale becoming for j.crew? jim: in the short term, wholesale has been a huge global opportunity for us. we have our wonderful relationship with the u.s. with nordstrom, but we did not have relationships across the globe. recently, we launched all across europe in all of the major department stores, and in south america as well. we are exploring opportunities in asia now. >> two weeks ago you relaunched the j.crew brand.

what sort of response have you had from customers? increased traffic and higher sales? jim: we are excited about the relaunch. we are definitely seeing an increase in new customers as well as reactivated customers. people that have left the brand and are coming back to j.crew. the spending as much as you would like? jim: they are. it's an exciting time. when i started, i received so many emails from customers j.crew, but id have grown out of the brand, meaning physically. it doesn't fit me anymore. we are now receiving so many comments be a social media of people who are so happy to be able to shop the brand again. so inclusive he isn't just about trying to be everything to everybody. it's about in whatever you are doing, including as many people as possible. received a comment

on instagram from a woman who said, thank you so much for showing the extended sizes. please keep doing it, it helps me a. >> you've talked a lot about engagement through social media. the change in marketing strategy or a shift to more digital marketing. what iu also relaunched guess i would call the backend of the business as well? how much has supply chain and inventory management changed at j.crew? jim: that is the work that has been happening over the last year. a lot of it has changed. we have organized the business to be more responsive to customer needs, essentially more customer centric back end process. brett andt was jim exclusive interview with bloomberg. j.crew might welcome a partnership with amazon but another ceo says amazon is

encroaching on its turf, but it can compete with the e-commerce giant. he said he welcomes the competition and added it has a strong warning for canadians who may want to copy president trump's tax cuts. optimize it but do it evidence-based. it's largely emotion-based and not science-based or anything like that. i think they are attempting a very dangerous experiment over and i want to be a bit more careful. >> in your own business, globally, we've heard also from ceos and experts that the

chinese relationship is still a difficult one, including the big sticking point on trade which is intellectual property theft. what is your thinking around that in how careful you are about china? >> is very complex, very money faceted. at the same time it's overblown in some ways and unappreciated in others. i think it is a reality of the globalized economy that everyone has to be very aware of how to deal with i.t. in general. there was a time when you didn't really have to think about a lot of these kind of things, but it's not even specific of china but generally of global kind of thing. war,u talk about the trade it has presented an opportunity for canada specifically. you have the economic situation and now the overhang of nafta,

no one really knows which way that's going to go. i think it's an opportunity in diversifyr canada to a little bit and look at asia and europe. it made up being quite good for the economy. have you constantly respond to that? >> is no different for the company itself. ,e had merchants sell globally the global situation as we talked about changes a lot. we are so used to it changing technology basis, were best channel, being a big but you also buy something from on amazonat you buy

or facebook or elsewhere. the interesting thing is, that is very transient. five or 10 years ago, we had myspace. that is no longer a factor. company inchnology the retail space. it's really a core value of the business. ceoy: that was the shopify speaking with amanda line. coming up, the showdown with apple. is there still a chance of the settlement? that's next. this is bloomberg. ♪

emily: it seems like a

never-ending battle between qualcomm and apple, and yet another dispute over intellectual property. qualcomm is claiming apple used its software to help intel improve its own chips. it follows more than 70 suits and countersuits over patent royalties and infringements globally. apple first suit the chipmaker and now it exclusively uses intel chips in new phones. could the new accusation further hinder of future settlement? what is the latest going to mean? >> this came out about a year ago and qualcomm through it around and said there was some suspicion about what apple was up to. now it's saying we have the evidence and we want to add it to a case that is already going on. clearly it's another attempt to ratchet up the pressure on apple. emily: is the evidence compelling? ian: we don't know. the judge has to initially

decide whether she's even going to allow it to be considered or if there will have to be more time for more evidence and discovery and everything else. emily: we sat down with the , take a listen to what he had to say about this suit with apple. >> i think there's probably no better opportunity and partner for all come in to work with apple. it makes sense that the technology leader in mobile should be partnered with the product leader in mobile. those things tend to work out. the way we think about the business is eventually you get the disputes figured out and you move on to a different time and i hope to be in that period according to the schedule we have already laid out. you square that optimism with the filing today and the bitterness? sometimeshe said was these things get settled, so the

basic strategy on both sides, apple is doing the same income as much pressure as you can, causing the other side to blink, then we will smile and shake hands and walk away friends. emily: what is the chance of settlement? ian: we haven't seen either side come close to blinking. emily: so what else are we waiting for? ian: the juries have to take a look at the evidence and the jets has to show roughly which side might be winning, maybe there is an injunction, something like that which forces either side to take this a bit more seriously. , qualcomm is way not in apple's phone. would we expect that apple would go back to qualcomm for later generation, or is that done? ian: if you believe what steve told us, we design a better chip, if we can produce something apple has to have, they will find a way to put it

back in there. at the moment, it looks like a distant prospect, though. emily: how big are the consequences for qualcomm if they lose? ian: the consequences are already baked into what it means for the chip business. for licensing, the consequences are huge. this is the business that drives the majority of their profit. without that, their ability to push that chip net: -- technology forward is challenged. emily: what does apple lose? basically apple has to go back to perhaps using qualcomm and it has to pay millions of dollars in licensing fees. emily: which they are already paying. stoppedch they have paying, but they say they are putting the money into account. it's not chicken feed but it's not going to make a huge difference. apple isdy think taking this to the wall, given its size and scale?

things,rand scheme of it's not that big a deal. ian: they can afford to win, lose, or draw. why not put as much pressure as possible on your opponent? emily: when do you expect to see a resolution? -- a saw a poppet possibility of it coming to term. the courts have the ability to ban in theory the import or export of iphone. if you are apple, that's not something you want to be facing. assuming there is a nudge in that direction or the opposite direction, and maybe one side has to cave in when that decision starts to materialize. emily: you have been covering this industry are two decades. qualcomm tends to win. it's lawyers, by and large, have

won over time. they would argue it's because their intellectual property is so fundamental to what is going that as soon as they can get in front of the right judge and jury, they will win. emily: we put a lot of money on what you have to say, so thank you. you can catch the rest of that 1.0.rsation on studio we talk about a lot. and that does it for this edition of "bloomberg technology." tomorrow we will have the roundup of the senate commerce the executives are heading to washington to testify, and we are there. i'm emily chang. this is bloomberg. ♪ this isn't just any moving day.

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>> welcome to "bloomberg daybreak: australia." >> were counting down to asia's major market opens. haidi: these are the top stories recovering in the next hour. president trump addresses the united nations. iran says he is committing economic terrorism. fdustrious lad, treasuries