that's what the bulls are kind of clinging to as things stand. >> did has been a see-saw week. we had a sharp down day, a sharp day yesterday and now lower today. taking a look at oil prices here. 56.66 as i mentioned, under some pressure on a stronger dollar. let's go over to jackie de angelis at the nymex with breaking news on crude. >> we just got the number from the eia on weekly inventories for crude. draw of 2.8 million barrels. this is a bigger of a draw than expect. despite the fact that the api last night reported a build. so interesting to see what's happening with prices here. we were down 83 cents before the number came back, we're rebounding a little bit. now over $57 a barrel. which is a key technical level. i will say this, what's buried in the report that doesn't come on the board that will be key is the u.s. production number. did it rise or did it fall? we did get a "reuters" report this morning saying that a draft report from opec says they expect the nonopec-producing countries to continue to bump up

their production. so what happens here in the united states is going to be very crucial. but right now oil prices rebounding just a bit, again, $57.05 for the moment. carl, over to you in california. >> all right. jackie, thank you very much. good morning, it is 8:00 a.m. here at the code conference in rancho palos verdes, california, it's 11:00 a.m. on wall street, "squawk alley" is live. ♪ ♪ ♪ joining thus morning, what a treat, xiaomi global's vice president, hugo barra joins us at the code conference along with jon fortt on an interesting

day for the markets. especially for tech. man, is there a lot going on. >> biggest pure tech acquisition of all-time, of course we'll touch on that first up, xiaomi is getting ready to officially launch it's first online store. selling mobile-oriented accessories on june 1st. but smartphone shoppers have to wait. yesterday we spoke with han hany nada, founder and managing partner of ggb capital. i tried to say about xiaomi's smartphone growth strategy. take a listen. >> i think these guys really have a very strong dominant brand in china. and they're trying to export that. i think they're going to go after india and middle east next. south america. i think you're going to see them because of their cost advantage over apple. they're going to become a very dominant second or third player in the phone ecosystem in the world. >> and with us this morning,

xiaomi vice president hugo barra, also formerly of google. so very much involved in the mobile space globally. we talk about xiaomi a lot. but we don't actually have the full complement of products to play withourselves. talk to me about what it is that you see tha xiaomi customer doing, the core customer in china, once they get this phone, what are the services and software that you see them most engaged with today that's fueling this growth of yours? >> so our users, and we call them fans, we call them mi-fans, are amongst the most connected people that you'll find. they are in social media. they shop online for everything. of course including their mobile phone. their primary means of contact. and access to the internet. so these are people that are connected all the time. they're using any and all apps. they're also very interested in integrated services, how can they have an easier time to whatever it is they're doing. this is exactly what we've done.

with all our products, with our smartphones, we've integrated internet services not just at the app level, but into the operating system itself. people who shop online, on social media are precisely the people who appreciate that kind of thing. i'll give you an example. this is a service that's deployed in china today. if you something people do all the time, make phone calls, right? it's old fashioned, but it's important. >> people still do that? >> absolutely. in fact mcdonald's is one of the most popular numbers in china. people call mcdonald's late at night. can you call and place orders and get delivered to you. it's the most popular delivery food delivery service in china. if you call mcdonald's on your xiaomi phone, your mi-phone, as soon as the call connects on the screen of your phone you'll see the latest you know, hot deals mcdonald's menu, as a visual menu on the screen of your phone as if you had walked into a mcdonald's restaurant. we've integrated all of that and by the way, our fans our users

are the ones who update the database with the latest shots, latest prices. >> it's curated almost like an wikipedia. >> it's a user-curated crowd-sourced approach. it's like you're driving in you want to see the menu. you call in, you see the menu. and lots of little clever things like this. that just make it so much easier to use a mobile phone for basic things. >> can you characterize your designs on the u.s. versus other parts of the world? >> so we're initially bringing to the u.s. in a few other markets our most popular sort of best-selling mobile accessories. those are products that work universally. don't require you know specific wireless band support. you know, 4g, 3g, they don't require detailed certification. customization of hardware and we know they are products that people really like. so we're bringing two of our most popular power banks.

we're bringing our highest-end head phones as well for a great price. we're bringing our first wearable product, a mi band, a fitness tracker, sleep monitor. that costs $15. so we, people have been buying these on ebay and amazon. >> what are your thoughts about how android has developed? because clearly you were at google, advancing android when you decided to move over to xiaomi. now we've got cyanagen that said we want to take android away from google. we've got amazon doing fire os in a way that services aren't google's. you guys are in china using android in a way that's not google-centric. three years from now, five years from now, is android going to mean so much more than just google services? and is it your goal to kind of spread that version of android with xiaomi's influence throughout the world?

>> so first of all, i don't think anybody could deny the fact that android has been insanely successful. it's been design and developed as a platform that is not only available across a wide range of smartphones, but also other products, like wearables and there may be more news today at google io. and it's been insanely successful because everyone who has done something with it, who has added services on top of it, who has customized the ui, like we did, for example, has followed very carefully the compatibility rules that google put in place. which means that no matter what brand of phone you buy, it comes with their version of android. which might look differently visually, but it's 100% true android. everyone is motivated to do that. if they don't do that apps start crashing and things don't work as well. that's been very successful. >> you don't fear the splinterization of android that some people have talked about. >> i don't. android was designed as a customizable platform. so people could do different and

interesting things with it it's been very successful in that regard. we're one of the best examples of a company that's done some really interesting things with android. we've given it a completely different look. we've simplified it in many ways, made it more customizable. but it is true android at the core. >> your growth doesn't benefit google's servicesings. the ones they try to monetize, because they're not baked into xiaomi phones. >> they are. they absolutely are for the phones that we sell in china, those are not. but for the phones we sell in india, indonesia, singapore and so on, they ship with full-on google integration. >> this month is turn into one of the record months for u.s. m&a. continued chatter about intel and whomever. can you explain to people why that's happening at the component level for someone who watch it is from a hart ware/software level? >> i think from a component supplier perspective, people are

looking for economics, for economy in scale. what are the best economics can you get out of whatever assets you own? and it is an insanely competitive supply market. you know we talk about companies like broadcom. there are so many companies we've never heard of that are successful suppliers. it's all about economies of scale and i think that's what we're going to continue to see. >> curious about where xiaomi goes from here. you talked about bringing accessories first. one of the criticisms i hear all the time is that as xiaomi expands outside of china, india, they're going to sue you guys, like they sued samsung. is that suggest think about at all? when people say, there are certain similarities that are a little bit too close between xiaomi phones and apple phones? >> every company in this smartphone face has to think about patent, patent licensing and all of it. so we're very young company. we're only five years old. of course we are thinking about that we're filing patents, we're

acquiring patents, getting ready to enter markets where the patent system is a bit more permissive. where people file patents for everything. we're prepared for all of that. and you know, we're pretty actively involved. >> it's great seeing you, you're going to talk here at the code conference in about 20 minutes. we look forward to your comments. please come back. as we talk about you guys all the time. >> thank you, carl, thank you, jon. >> hugo barra, global vice president at xiaomi. the dow is off 75 points, s&p down about 8. also moving today, the deal we mentioned for a pure play chip maker, evago. buying broadcom. $30 million cash and stock. it sleeked out before the close yesterday. we'll have more on the deal later on. coming coming, a lot more from the code conference in california. the ceo of twitter's periscope on the phenomenon of live streaming and the top executive at facebook, david marcus will

join us on messaging, payments, competition at the social network. a look at google, their io conference, including what google's chief business officer hinted at last night in rancho palos verdes. there's more "squawk alley" straight ahead.

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ago, right? >> talk engagement. mary meeker was talking about that yesterday and how so much more focus goes to engagement because top-line growth isn't the entire story. clearly any more. in terms of the number of times people are opening up periscope on their phones in a given day

or week, the amount of minutes that they're spending on it. what can you tell me about roughly how much that is and how much it's growing? >> well what i can say is you know we thought a lot about what the important metric is to us. and again, it's still early days. what we think is most compelling is what we call watch time. which is the aggregate amount of time that someone spends watching live content on periscope. we think that's the best indicator that explains how many people watch broadcast and how long they watch each one. that's the metric we're most closely tracking. we're blown away and are planning on sharing numbers later today. we've been blown away by that specific metric. in that it's early days, a lot of other numbers like download rates and open rates look great as well. watch time gives us an understanding of how much time people are spending with the core mechanic of our app, broadcasting and watching. >> as you approach these levels of scale, are there things you can imagine adjusting in the near-term? for instance i hop on a lot, and i'm locked out of commenting because there are already too

many people loaded in. >> you watch a lot of broadcast? >> a fair amount. >> is that something you would raise the limit on, other things that are easy to dial? >> i wouldn't say they're easy to dial, but they're ones we're looking at. commenting on the app is an important feature of the engagement. >> what's the limit? >> 100. we think if there's more than 100 people commenting on the screen it feels overwhelming. >> you can't keep up? >> it's a design challenge. in an engineering challenge as well. it's one that we have some solutions around we're totally working on. >> from here, do you do multicamera periscopes? do you do something different with orientation, encouraging people to go horizontal, though evan spiegel says it's all about vertical from here on out. i guess -- >> how about occulus. >> you're thinking big here. >> you know, i think that what i would say is we are trying to think big. definitely. and you know, other plat forms

may be a part of that. other input devices may be a part of that strategy. but what we're interested in is you know we have a tremendous amount of usage right now. in a very early period of time and we think about themes like discovery. there's all of this amazing content happening around the world right now on periscope and we have limited ways to discover the content. we have some compelling ideas i think around how people can tune into what's happening around the world right now. that's one theme we'll be focusing on moving forward. >> 70% of the stuff on the discovery list on periscope is on a list i can't read. if i do tune into that, i won't be able to understand what they're saying. >> we look forward to hearing your comments and breaking news at the conference. >> great tof y have you here. >> thanks for having me guys. apple watch and the future of gopro cameras, the future of self-driving cars when "squawk alley" returns.

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self-driving cars, new camera drones, augmented virtual reality. it's been a busy couple of days at the code conference. listen to some of the action we heard from the speakers on the stage last night. we figure out a way how we're going to go build a network, a completely different network architecture, completely different ways to build a network. you can expect in the next 18-24 months hopefully invite me here two years from now that our network will be ranked number one or number two in every single market. >> do you guys want gopro to make a quad copter. do you want gopro to make a quad copter? >> okay, gopro is making a quad copter. it's official. >> we want to make sure we have

a system that accepts the payments and the type of payments that our shopper and our guest is looking to use. >> at the very beginning we decided we weren't going do release data on the watch. we release maybe too much data today and we didn't want to, we didn't want to do that. >> there's legal things that have do change, there's regulatory things that have to change. there's consumer learning that has to go and to your point, scale as we put it on the vehicle. but you know i think we'll see great advances in five years, ten years. >> josh lipton, jon fortt joining me at the code conference, trying to make sense of the conference. figure out what is the headline. first night it seemed like it might be evan spiegel talking about a correction in valuations, but i would argue that's not been echoed by a wide part of the population here. >> yeah, i mean certainly, i thought the headline coming out of spiegel was the bubble talk and going ipo, wants to go public that was a big part of it and that's a conversation that keeps happening, bubble i think is always a tough wore, because

there's not a lot of agreement about what that word means, maybe a little more talk about getting more specific questions or the valuations, becoming more disconnected from the fundamentals, certainly a theme you're hearing. >> behind the scenes in you know quiet conversations, people talk a lot more about valuations being out of whack than they do on camera. no one wants to be the one to yank away the punch bowl. mobile gets said so seldom because it's seemed. if you're talking about being connected, online, talking about phones, you're not talking about pcs or even tablets any more. that's one thing. another thing is the move of digital internet into what we haven't can considered to be connected devices in the past or connected experiences, whether it's in store or in-home, in-car, this kind of pervasive sense that this is disrupting everything. and all of these other businesses had better wake up quick. >> certainly products, which as i recall last year was a big part of it self-driving car,

apple saying their pipeline was the best in 25 years. this year it's the gopro drone news was big. google is going to make news regarding mobile payments today at i/o. >> some of the speakers, you mentioned google astanni being on stage, google's chief business officer and some of the different questions he answered, confirming news that google will come out with a buy button on its search listings and when he talked about self-driving cars, kara swisher asked him how do you think about monetizing these moon shots and astanni said you build the product, get it right at the end of the day we're not building the core, we're licensing the technology. >> it seems like moon shots are a little out of vogue it's a block and tackle sort of environment. not so much about boy we're going to put somebody on mars. that was when, when elon was here a little bit ago. now they're talking about target what are you going to do to get people in the store who is have phones to buy more stuff? with cramer this morning, a

little more thematic purity and discipline, at least from google. let's go to simon hobbs and the european close. >> the big out of europe, hypersensitivity they're developing on the markets to what is happening with greece. the talks continue, markets in negative territory. let me show you what happened yesterday to highlight it. you had a big bounce as we got the news from the greek government maybe there was a structural deal. some markets rose 2% only to erode it today. the problem is the greeks weren't even on the ground in brussels, their plane had been delayed and sent over somewhere else in germany. you have to look at the headlines kamcarefully amid hypersensitivity. in dresden, germany, the g-7 finance ministers are meeting. the germans and the french have rounded on the dwreeks saying they should do more. the imf is maintaining a hard stance and the ecb has a stability report, warning about con dajen from other countries

from greece. while markets are not overvalued, they could fall and that would hurt recovery. the smerktor o smurkemicons higher in europe. hollywood producer brian grazer talking about streaming, mobile and tv versus movies. part adventure. it's part geek and part chic.

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i'm sharon epperson, here's your cnbc news update. the army's top general said human error was probably not a factor in the shifting of live anthrax to research laboratories in nine states. telling reporters the problem may have been a failure in the technical process of killing the anthrax samples. seven miles of los angeles county coastline is closed as coast guard scientists investigate mysterious balances of tar washing ashore. officials say it appears to be about a barrel or two of oil. teva has agreed to pay $ .2 billion to settle a fight with the ftc about how it's unit treated a sleep disorder drug. it had been accused of paying

drug makers to drop their challenge to its patent. the finance ministers are holding preliminary talks at the g-7 conference to set up a meeting with the heads of state in germany next week. our cnbc news update for this hour. thanks so much, sharon and welcome back to "squawk alley." we want to update you on a major deal announced in the semiconductor space this morning. avago is buying broadcom in a $37 billion deal. the largest chip deal on record. we had a conference call about the deal end moments ago. talked in great detail about the expected cost synergies, the combined company will see about $750 million in the first 18 months. avago will see this as being accretive immediately. which swi you're seeing the stock up today as the acquire. the two companies are

complementary businesses, they operate in different markets but share many of the same customers, like dell, cisco, samsung of course. broadcom does call apple a customer which has been a blessing for that company's valuation over the course of the last few years. but that's one reason why the companies have been so familiar with each other and why they've discussed merging at least a couple of times. including just last october. now a great interest to investors will be this merger agreement. it's going to be filed in the coming weeks. and it's going to detail what happened between them and -- then and now and which why broadcom which has been a rumored target for years ends up something to a company roughly its same size, rather than intel or qualcomm. which are much, much larger as we know. sources i spoke to mentioned perhaps regulatory issues or activist distractions were in the foreground. but that broadcom as any company who is involved in a change of control would, did reach out to potentially interested parties. and while you never say never. especially you never want to underestimate what a sense of urgency does in a space that is

consolidating, we do know that the avago deal is still the end result. and where avago is concerned there are reasons why there were a few catalyst when is they re-evaluated the deal. first the fact that both company's stocks were up. when you have a deal that at least partially needs a stock component, it becomes more valuable from a stock standpoint. there was a sense that debt could get more expensive late anywhere the game and when you have a deal that requires $15 billion in debt, that's important and broadcom completing aspects of its restructuring. avago finishing a deal, so you have that out of the way. there was an urgency for scale following the march merger between competitors nxp and freescale. what both the nxp deal and this deal need? they need regulatory clearance and china, too, which can present some unknowns. nxp said it will take several months to get through that it's expected today's deal won't close until the end of the year. but it's clear that with so much

consolidation, in this space, this is not the last we've seen of the chip spaces' urge to merge. let's get back to carl quintanilla and jon fortt at the code conference, guys, over to you. >> thanks so much, kayla. unbelievable. u.s. tech m&a is on pace to be the best year since 2000. that's lot going on in the space right now. >> and it's important to think about what the real forces are driving this. because i think it's a little bit different. i've been messaging back and forth with patrick moorehead over at moore insights and strategies, a chip industry guy who an analyst. and part of it is that system on a chip, which is increasingly important in networks, moenl era, it's been integrating some functions that individual chips from an avago and broadcom do and they're big players in the space. particularly in wireless and networking. it's two of them getting together. it's also interesting, there are a couple companies who are huge customers of both of them. apple more than 10% of revenue.

for both broadcom and avago, right? and apple has got enormous leveraith company when they're in that position. samsung, a big customer, cisco, a big customer. probably also what this does is it pushes aes all-tara, and all-terra to get together with an intel. saying that altera had time to figure out what to do there. there this is the biggest pure-play tech deal of all time up to this point. >> you got to get the scale of that into mind. we talk about billions all the time. this is $137 billion. >> it's interesting to see the market balance some of the imbalances when it comes to customer relationships. we have at the code conference and yesterday we had the chance to sit down with legendary hollywood producer brian grazer. as you know he produced "a beautiful mind" "friday night lights" and the hit show for fox, "empire." we asked glazer if he's fallen

more in love with television than movies. >> falling more in love with television and for me, "empire" and television is just, is kind of a continuation of "24." because "24" which i was part of producing also had these cliff-hangers. but they were at the end of the show that sort of caused you to see the next episode in this show there's like three cliff-hangers that live inside each episode. so you can't leave the set and you're always tweeting the entire time. >> so if i restricted you to one distribution channel, would it be tv today? >> yeah. if one platform, if i would choose television over movies. >> that's, that's, that's a statement. especially coming from you. >> well it used to be movies. >> of course. >> but movies are so, they're now such a polarized experience. in that they're either very lower-budget movies under $20

million, or event-status films. all the "marvel" "d.c." "batman" all of those shows, it's just the middle has sort of dropped out of the movies. whereas in television the middle is a very rich area. and that means shows that are really driven by characters. and that's the great movies of the '60s, '70s and a little bit of the '80s, that movies that have a hook but they're really driven by characters so now you get to see all of that on cable. you get to to see it on fox. we stretch the limits a little with "empire," it allowed other creators to come one shows that stretch limits as well. >> do you fault the studios for relying on those franchises? or is that, i mean it's working, right? >> it's the nature of what it is. >> it's working, it's the nature of what it is. i don't fault it and some of those movies are really good. but i did like movies that you now, some of these great movies of the '70s and '80s, that hal

ashby made like "being there" or "freakin'" "exorcist" amazing movie being made. some still of course, it's a franchise-oriented, event-oriented viewing for movies. >> why network tv for empire? you could have done so much more profanity-wise, nudity-wise, you could have stretched the limits if had you gone straight to netflix. >> i had this very passionate studio chairman named dana walden who wanted it so badly and convinced us all that we would be able to do everything we wanted to do on the fox network and we've been able to do that. >> danny has said that you, because of that because of the limits of network tv, you knew the story would have to be even more compelling. is that fair? >> that's fair. it has to have sex appeal and our show certainly has that. >> when we come back, google's

developer conference kicks off today of course as you know. we'll take you north to san francisco. where that is set to begin. plus speaking of payments, facebook's head of messaging, david marcus, used to run paypal, he's going to join us in a few moments, talk about the social network efforts in e-payments coming up.

coming up, dick fuld breaks his

silence, the former head of lehman brothers speaking publicly for the first tim since his firm's collapse in 2008. you'll hear him live. buyer beware, we talk to a fund manage another says stay away from that sector. and expectations of broadcom's big deal today could be one reason that dr. j has been buying that name. who he thinks will be the next chip to fall. see you at the top of the hour. dick fuld live during the halftime report, looking forward to that. >> google developer conference also today in san francisco. mark bergen covers the company for re/code and joins us now. mark? >> hey, all eyes are on the next version of android and virtual reality here at google i/o. and google still needs to prove he it keep innovating. android dominates the market would wod worldwide.

78% of smartphones. but developers like these earn more money with apple. on virtual reality, google risks losing to rival like facebook. google's approach is to take vr mass market. a $20 cardboard headset. but connecting people with more advanced devices like occulus rift. and so far google has shown little progress. everyone here is eager for any new news on google glass, as you know, google's shelved the product and handed it over to tony fidel, the guy who built the ipod. the guy who acquired his company for $3.2 last year. it used to be you could throw a rock and hit somebody wearing google glass that was the one spot. i see ten people standing behind you and no google glass, i guess it's really the end. >> i've seen about four this

morning but you know it's not what it was a few years ago. >> all right. mark bergen from re/code, thanks. up next, facebook's head of messaging, david marcus on the next frontier for facebook. whatsapp payments new messaging competitors, all that coming up on "squawk alley." can it make a dentist appointment when my teeth are ready? ♪ can it track my crew's performance, and protect their heads? ♪ can it tell the flight attendant to please not wake me this time? ♪ at cognizant, we see opportunities for every company. to meet the new digital demands of their customers. can it process my insurance claim? like, right now?

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with the rise of apps like snapchat and whatsapp, the competition picking up in messaging. facebook is paving new ways to monetize its mentioning servime by adding payments. and joining us, the former president of paypal, david marcus. your timing is exquisite, i must say. what is the headline right now in messaging would you say, david? >> i think that when you look at messaging, it's the thing that people do the most on their phone. and it's an amazing time to kind of reinvent how people communicate every day and we're hard at work trying to build tools that make expression a lot easier. it's just hard to express yourself just with text so we're building a bunch of different tools to enable people to express a wider range of emotions through the people they love the most. >> give us some inside insight into what happened with messenger over the past year? because the whole idea seems to

be facebook messenger didn't really have momentum. so facebook goes and buys whatsapp. you split it off as a separate app. next thing you know, half a billion users on messenger. it's a growth engine, too. what exactly besides splitting off that app has driven that? and is the growth continuing? >> so, yes, it's north of 600 million monthly actives right now and the growth is continuing. the reason we split the functionality from the main app is because if you want to be a world-class messaging product, you can't exist inside of a large app that has another purpose, than just messaging. and so, you know, everybody needs to have push notifications enabled and you need to have a single purpose app for that thing of like which is messaging, which is core to the things you want to do on your phone. and you know that worked really well because the product experience is so much better now. inside of messenger than it was when it was bundled with the core facebook app. that people come back and use it a lot more.

>> if that's true, why are you sticking payments inside of message centre by that logic, shouldn't you have a separate payments app so that experience could be so much richer? >> that's a great question. when you think of payments like person-to-person payments, it's a very conversational thing. the likelihood of you asking me for money before i give you money is very high. so it belongs in a conversational environment and it was always like i always like to rewind time and look at how things were done when there was no technology. and you know try to replicate what the user experience was looking like with technology and when you think about payments, as very conversational and i think that like the ability for you to pay everyone on messenger which is almost everyone now, inside of a conversation is actually good utility for people. >> i'm going to guess that monetizing a payment is a lot easier than just monetizing a message, yes? >> well, actually people to people payments is never going to be a source of profit for everyone.

it's not a good business. there are other forms of things that you can do with payments to make it a business. which were actually not interested in. >> such as? >> you know just payments for businesses and merchants. but you know that's not something we're, we're not interested in building a payments business. what we're interested in doing is trying to build the best possible experience. if you see an ad or something a product you want, and actually buying it on mobile. we feel the experience is not that great so we'll do whatever it takes and partner with whom ever to get that done, but we have no interest in building a payments service. >> people argue whatsapp enormously popular overseas, it's tough to monetize in markets where income is lower and buying power is lower, is that fair? >> look the way we're thinking about this, is that we first need to build capabilities inside of messaging platform to have the right to monetize. you have to do it the right way. you can't just slap ads on a messaging app. it's very private. it's a place where you go to

message your friends. and so you don't want to be invaded by low-signal noise. so the way were you thinking about this is we want to reinvent how people and businesses communicate. lately we've started rolling out what we announced, which is basically the ability when you make a purchase online, to continue the conversation with the business and get an enhanced receipt with shipping notifications and tracking. if you go and buy a t-shirt online, you'll get the connection on messenger. once you've bought the t-shirt and can you track it inside of the thread with messenger, you have a thread with the merchant. you can say hey, i like the t-shirt, can i have three more, and done. and two days later it shows up on your doorstep. it's a pretty magical experience. >> for a lot of people it's counterintuitive you're going to say we're building payments into this but we don't want 0 make money off of payments. your experience is going to be better overall if you stay

within facebook. not just for sharing photos with your friends or having conversations, but for doing payments. communicating with businesses. reading "the new york times." or whatever it is that you happen to be doing, stay within our world and keep engaged within facebook? >> yeah, i think, i mean it's always interesting that like, we always get like questions like, as if there was a grand plan to do like, amazing things, sometimes there is. but the reality is we want to do what people want. and what people we feel need. so in the case of p 2 p payments inside messenger, it's a natural place to do that. people consume a lot of news on core facebook. so it's normal that we try to make that experience better for them. so i think it's just more basic than that. we just want to make the best possible experience for people that use our services. and if we continue doing that, then you know they'll use it more and everybody is going to be happy. >> i bring in the rebate of

oculus was on stage yesterday. one of the things he was mentioning was why facebook, what's in to for you. he gave an example of the voice ip example. facebook, something they could scale effectively. is texting with your thumb, is that going to be a thing of the past at some point. is the voice so powerful it's all going to be spoken word? >> it's a great question. every day we have about across whatsapp and messenger, about 45 billion messages sent on facebook. and so that's a lot of messages. when you think about the primary use case of text messaging. it's kind of a really quick way to reach someone. i think that will continue for a while. until we find a better interface and if we have glasses and we can communicate you know by plugging in things, you know then fine. but like i think text is going to be there for a while. the way we see things is that we like to think about upgrading. you often start a conversation

with text. and you might send a sticker and animated gift and you might upgrade it to a voice call and voice call on messenger is doing really well. it's high-definition and super high quality and can you upgrade to video calling we released a few weeks ago that's doing really well, too. so we'll continue innovating around how can you upgrade from text to other things. we think that text is still going to be the primary communication media. if you will for a long time. >> david marcus from facebook. working on messenger, working on payments and more to come as well. when we come back, it's now 37% of all internet traffic, which tech giant is eating up a bigger share of your bandwidth, in a moment. far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can.

universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent. ibm analytics is working to make education smarter every day.

netflix taking an even bigger bite of all internet traffic according to a new report. netflix accounts for 36.5% of all downstream internet bandwidth during peak periods in north america in the month of march. up from 34.5 six months ago from sand vine a canadian bandwidth

company. netflix video uses more bandwidth than youtube, amazon and hulu combined. they did not present this year at code but they're always talked about. >> jim stewart making a great point about how they're steering policy as well. >> it's been a great couple of days here at rancho palos verdes. let's get back to headquarters, wopner and the half. ♪ ♪ welcome to the halftime show, let's meet the starting lineup. steve weiss is with us along with jon and pete najarian. our game plan looks like this, b biowreck, what the top-performing value investor is betting big on now. chips ahoy following broadcom's big deal for avago. our traders play match-maker and reveal who could be next to do a dance. stocks lower as we turn our attention to an event taking place in midtown