In chicago according to a report in politico. It will likely include a thank you to illinois for launching his lyrical career. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Caroline i am caroline hyde, this is Bloomberg Technology. A tumultuous year with another misstep, but this time it has company. How a social media giant is struggling. Plus, the commercial space race that could be set to lift off under donald trump. How peter thiel could be the x factor two deep space exploration. Wo tech titans sound off. First, our lead. Twitter is struggling with its video advertisement. This is the latest misstep to in videoth advertisements. It raises questions about the lucrative business of online advertisements. Is our guest host, brad stone. Is it another hit to twitter . Out andt us start address what i call the twitter paradox. The year has been horrible, the stock is way down, and yet somehow it has never been more important to the public conversation, depending on how you view donald trump. Onhas waged his Campaign Twitter and the media is it up. Eats it up. It has found its place in public discourse. The vp ofer hand, product has left, you mentioned the cto, this is really Anthony Notos company right now. He is really running things and it is his video strategy that has taken front and center. I really wonder what 2017 holds for jack dorsey as a leader. Caroline talk to us about the advertising conundrum that is going on at the moment. It is ironic, these companies are supposed to make it so easy to trace advertisements, but facebook and twitter are derailing things. Brad the specific minton mentioned, they reimbursed some advertisers, very small numbers. It is part of a broader trend. For the past couple of months, facebook has made these announcements that it is miscounting impressions, what people see on the site in its video advertising, and it is ironic because here was an industry the promised precision and really demolished traditional advertising, and they are now admitting they have not counted things very well. We need a neutral audit and i think that is where they are going. Caroline twitter seems to be ahead of the game when it comes to video advertising, looking at. Ine and periscope, bu brad i think twitter just doesnt have the assets or capital to compete for the content. You look at amazon or netflix are doing, paying billions of dollars to acquire content and sometimes creating their own, twitter is a small fish in the video pond. Caroline brad, stay with us, because this year was one of because we have heard from one of twitters most vocal detractors. He sold part of his stake in twitter. Check out this interview in San Francisco. Is an incredible story of underinsured underachievement. Product vision needs to come in and take chances. We know it has the most valuable body of information the world. There is stuff in there for every person on the planet. Toy have filled repeatedly put that in an easy to digest way for most people. Have you been disappointed in jacks leadership . Yes. I was hoping to see someone else get involved. Was that on the table . Yes. From 2 million users to but it was users, always at the front of the market. I dont think any of us understood the urgency about video. Deo live a i really want to see adam bains role grow. It has not grown like we thought it would grow. He has grown to the extent he can without user growth. I would like to see this go to a partner who has distribution who can grow it organically using other platforms and also say, we have the best data and faster than anyone else, why are we not making it easier . Do you think twitter can still be an independent company . I dont see how it gets materially better over the next three years without new blood. I do think there is any twitter 2. 0 or 3. 0 in the works. Ive not heard anything about what is coming down the pike right now. Do you hope for acquisitions . A new ceo . I hope for acquisitions. This is not a new thing for me. Ive been saying it for a long time. It is a natural complement to four or five companies. Who would you like to see . It is an obvious google fed. I think google underestimated the company for a long time because it is not scientifically difficult to pull off. Google put off blogger for so many years. That is what twitter is. But it is to a scale that blogger did not achieve. I think they could really bring some great vision to the cure ration of the tweet. And we busy all day check into twitter, i dont want to see the 10 most recent tweets, i want to see the 10 best. That is why sportscenter exists, you can see the highlights and you dont have to watch the game that happens to be on at that moment. Would be ableoft to absorb the business and take some chances with it. Disney . Overratingpeople are the importance of media on the platform. It was a lot of audience and engagement there, and if you do that, Media Partners will come. You dont necessarily have to achieve and media assets deal to get people excited about a platform. You just make it the most fun place to engage with the content and then content shows up. You were the biggest shareholder at one time. Have you sold shares . Yes. How much . Useddont own as many as i to because i am not an idiot, but i own more than i should because i am an idiot. Emily changat was with chris sacca. On who is thegin biggest shareholder. Chris sacca says he is not. Williams isevan still number one. He has 6 overall. Vanguard is up there. Number three is saudi arabia. With chris sacca that he was right to get out . The trajectory of twitter has not bestowed glory on anyone. This is a company, the many histories of the company show it problems. Me dna the founders never really got along. I think there is 20 of blame to layround, and some we could on chris saccas doorstep. He was very publicly for the previous ceo to be ousted. The last year has not been any better for the company. I think there is plenty of blame to go around. For sure he is right, there probably is a buyer, and as the stock continues to fall we might find out. Caroline speaking of stock falling, i have the recommendations up for twitter at the moment, the white line, the market cap is less than 12 billion. That is phenomenal changes. You see the yellow line, the price targets, it has kept a basically, were seeing a share price dip below and is price target. All along in the red, only 70 of analysts 17 of analysts say so the stock. Brad there is not a lot of consensus. Exists isct as it necessary. It serves the public function. As we have seen from the stagnant user growth, it does not have widespread appeal. Ae company has been on journey to find Something Else and we will see if the video strategy can be something. Caroline i think the most ironic is that one of the most public figures, donald trump, did not think they were heavyweight enough to invite to the tech meeting. Or it could be during about their refusal to play ball during the campaign. Caroline brad, thank you. You are sticking with this. Up next, a changing of the guard in washington means a chance to shake up the u. S. Agenda for deep space. What president elect trump means for nasa and spacex. This is bloomberg. President elect donald trump has not said much about the u. S. Space agenda once he takes office, but this week his team added a key figure to its socalled nasa landing team. Charles miller is joining the panel and he is seen as a strong advocate for partnerships with nasa that has given rise to spacex contracts. Peter thiel is Donald Trumps most prominent Silicon Valley supporter. Analystus now is Margaret Charis and lori garber. Lori, i want to get your point of view first. What are the intricacies they will have to go through in handing over from obama to donald trump . Lori the landing team got a late start, but they seem to be a large group. I think with charles miller, that makes eight or nine members and they have a very short time to review what is happening at nasa and recommend new leadership for the agency and policies. I think the team itself is split between a handful of people who are traditionalists who would like to see the status quo am a costplus contracts perpetuated and some of these new people who would like to do what the Obama Administration tried to do more of at the beginning but ran into congress. It will be interesting to see if they have more luck. Caroline marco, talk about the potential split. Who potentially went out . Will it be the likes of space x and blue origin or the older guard . Boeing and lockheed martin. Dont think anything is going to change dramatically over the next year or so, but there are clearly two camps, one that has a preference toward nasa continuing to lead the way, to create a vision for what to do in space, and then you have this new approach, which is really more of a partnership between nasa and private industry and even letting private industry take more of a visionary lead. Traditionally, nasa has had a harder time coming up with the vision over the longterm and sticking with it. Not that this is nasas fault, a lot of Times Congress changes things. Now is what you will see private industry setting the tone a little bit more than in the last halfcentury here it my what we seen given from mr. Trumps talk, he will have more of a preference for letting commercial industry take a leading role. Caroline lori, you are talking about the arcades the Obama Administration came across during that particular rule over nasa. What would you like to see in terms of the legacy obama had and how that might unfold under donald trump . I think weve got a foothold with commercial companies and have had some successes and there will be no turning back. The question is really one of balance. Theyou going to have majority of the funds going toward cost plus contracts to build a very large rocket that doesnt really have a destination that takes 3 billion per year to go in may be mid20 20s and into the mid20 30s into mars, or do you allow the private industry to compete . I think it is something we hope we can do, to have the private sector more involved. I think the one bright spot perhaps of a donald trump administration, hard for me to say, is that they will stand up to congress and say no, the contracts in your district are not Worth Holding the Space Program over or slowing the Space Program over. That they will allow entrepreneurs and even the lockheeds to compete. Caroline marco, what gets prioritized in the next 48 years, what will we see achieved by nasa . Marco a lot of the future of where we are going in space will be determined by the space launches and sls. That is a huge program. Up 3i said, that picks billion per year. This is a 10 billion program through 2018. If the decision is to keep that program going, even at the same time as other Companies Like spacex art developing similar rockets, we will know the shift toward more of a Publicprivate Partnership is not going to happen quickly. However, if the sls is canceled, we kind of know where we are going. We had youast time want, we were discussing perhaps the setbacks we had seen for spacex. How much will the sender spacex growing within nasa . Marco i dont think it will hinder it much. If youre trying to do some ambitious stuff in space, you will have setbacks just like you have had in all the other industries, aircraft, automobile, railways. One of the things that struck me a fewwhat elon musk said months ago about his plans to go to mars, they asked him more be the main requirement for candidates to go on a mission, and he said, you have to be willing to die. I think that was very honest and telling. It is clear there are going to be problems along the way. I think that is why private industry is a good leader for this industry because they will slow down a little bit but they will not stop. That is not so easy for government agency. Caroline lori, if we do see Silicon Valley more embraced by nasa, maybe even speeding up, what about where the focus is being put . A lot of Space Missions are to do with Climate Change and that will probably come off the agenda. Lori that is the big shift that i think most of us fear. The Earth Sciences program will be greatly reduced. Byre is a lot of talk republicans and the Incoming Administration of coming back on Earth Sciences at nasa, letting do it. Noa tosystems have been critical monitoring the planet. That is probably the most negative thing people are concerned about. You also have a shift in the longterm human expiration destination, from mars to the moon. You look at Newt Gingrich as a king key advisor, and we have all heard that we have had elon musk and jeff bezos at the tech meeting a week or so ago, and after the meeting we were told involved pence has himself and is hoping to lead the space council, and put us back to the moon instead of longterm go to mars. The moon as a next up. The commercial space industry, where you are developing space in a more rational stepbystep approach, that is a more natural way of doing things. There is a huge moonmars debate. I since the moon is rising. Caroline wonderful to have you both on. Thank you both for giving your time today. Now, more of Bloomberg Technology coming up. All of our this is her life streaming on twitter. This is bloomberg. Caroline on todays tech funding board, alabama ondemand alibabas Ondemand Service is securing funding for expansion. Round has the stock up by about 8 billion. Baidu says reports that it is planning a billiondollar ipo for its video streaming site next year are not accurate. They published a statement on friday. They say there is no timetable in place for the ipo and it supports independent growth and development is going well. Coming up, everything you need to know about this week in tech news, including ubers running with california regulators. That is next. This is bloomberg. You are watching Bloomberg Technology. This is a check of your first word news. Maltas Prime Minister says the man who hijacked a plane and diverted it to malta had a hand grenade and pistol on him. A second pistol was found on the plane. Plane1 passengers on the will be returned to libya after they are questioned by police. The hijackers are being interrogated. Investigators are trying to determine whether the suspect in a deadly german truck attack had help. He was killed today by police in milan. Germany and italy are trying to reconstruct the root he took to milan from berlin. Said how 30s have not he crossed into france. Video shows him calling for more attacks in europe. Isis claimed responsibility for the attack. Aim at thetin took u. S. Democratic party at his annual News Conference today. The russian president said the democrats need to learn how to lose with dignity. He also said that Donald Trumps about remarks about the u. S. Arsenal Nuclear Arsenal did not taken by surprise. He is something new. He kept saying in his campaign there is a need to consolidate the nuclear element. There is nothing absolutely new. Trump tweeted the u. S. Must bolster its weapons until the world comes to its senses regarding nukes. The world is reacting to these remarks. A chinese official said a country with the largest arsenal should take the lead in disarmament. Beijing is reportedly playing close attention to what Nuclear Weapons policies Trumps Administration will follow. Australia has five suspects inspired by Islamic State in custody after reported plans for Christmas Day attacks. Assure you that our Police Services across the country, our intelligence agencies across the country and around the world, are at the highest state of alert, learning from every incident, whether it , puttingre or abroad in place the measures to keep australians safe. Economic community of West African States says the block will use military action ia. There be a namb the president lost the election and refuses to leave. This is bloomberg. Caroline this is Bloomberg Technology. We are visiting the top tech stories of the week. There are more people leaving twitter this week. Self drivingulling cars from San Francisco street. Earlier i sat down with brad stone and sarah frier to recap the tech week. This company has had executive turmoil as long as they have been a public company. If you look at any time they have mentioned executive leadership in a presentation, you can cross off most of the names. Most of the name since they started in going public. They have had an out of trouble a lot of trouble defining their vision and moving in a direction that contributes to growth. This contributes to instability that twitter does not need when it stock is so under pressure. Caroline a billion dollars in market value wiped out this week. We have had a joke that it is dangerous to profile a twitter executive these days because they might be gone by the time the story comes out. This is really anthony Motors Company right now. Ofdoes have a vision organizing twitter around live video. We will see how that goes. They have very little runway. They have to do something dramatic. If the price falls, it might tear it up again in toys 17. National and sara overcharged some of their advertisers for video advertisements. Advertisement is what they want to focus the company around. The fact that they were overstating how many people viewed the ads. They issued refunds but it is still not a good place to be. To their credit, they are not the only company who has had that problem. We were talking about facebook here it they had several metrics that overstated the amount of Digital Engagement they have had. These are numbers that advertisers followed to find out if their advertising spending is going well. Great ironyis a that an industry that offered precision around advertising is now in mashed in scandal around what they are really telling advertisements. Advertisers. Caroline we are going to be looking at uber now. They have been running up against regulators in california and have backed off. They are shipping to arizona with the self driving cars. Out of the uber playbook, dont ask for permission, big for forgiveness. The fact is that our roads are public property and shared by drivers and bikers and pedestrians and we depend on government to keep it orderly. This was almost a step too far and now uber is moving to arizona and will march on. They do not surrender. Caroline it is fascinating whether they would act like this if they were a public company. Many people hoped they would go public in 2017. How do people feel about that . Do they think that uber shouldve gotten the license . Sarah this is a much different regulatory battle than their first. Different, it is technology that could actually kill people if it does not work. , they were not totally self driving. They had a driver in there who would take hold of the wheel if anything went wrong. They had other guys taking notes. It was baby steps. Where right, in the city it would be embraced, you would be but you have to brad nobody wants to see our streets turn into a science experiment that could have terrible ramifications. Lets shift into computer learning. Echo sold out. Brad it is a great product. People love it. You have to give amazon credit. They have labored for eight years experimenting and trying new hardware strategies, and a lot has not worked. The fire phone did not work or the fire tablet. Market,le found a niche but it has not expanded all that much since early days. They went on to googles turf and identified a great Market Segment and i think they deserve credit. Caroline sarah, you are the social media reporter here at bloomberg. Sometimes it has been painful watching. Mark zuckerberg has definitely hammed it up on his jarvisk page of how works. Hes was a personal challenge gave himself. It was not something for market. It was one of those things. That, andt, he built he has been using it in his home with the voice of morgan freeman. Caroline that was brad stone and sarah frier with me earlier. And a story we have been following, Vladimir Putin says the parties responsible for cyber meddling in u. S. Elections more from another country. As the president elect quite rightly said, nobody knows who these hackers were. They be they were in another country. Maybe somebody on a sofa or in bed hacked into theranos. Into their hacked emails. It is easy. What is important is that the essence of the information the hackers have brought to light. Caroline he went on to say that russia was the only country that win the donald trump to white house and accused Hillary Clinton being a bad loser. U. S. Intelligence experts have said that Russian Hackers played an active role in meddling with the u. S. Election. Our best, more of interviews of the year, including a oneonone with mark benioff. He talks about his relationship with Larry Ellison. This is bloomberg. Caroline so force is one of Silicon Valleys most inquisitive companies. Brad stone sat down with the chief executive mark benioff and talked about many things. Take a listen. Ai is a Huge Movement in our industry and i think one of the things that has been great for salesforce as we have bought several ai companies, and that has included spending about 600 million for them. Weve been able to take those employees, stitch them together into an Incredible Team and we are delivering an amazing a platform based on that Technology Including some of the best ai capabilities. Brad lots of companies are talking about it, different kinds of technology companies. Had he convince them to come to a crm company . We are not a crm company. We are one of the Fastest Growing software companies, the fastestgrowing of the top 10 software companies. We are committed to improving the state of the world. We believe strongly this is a platform for change and they 1 1 1 model. Back,llows them to give focusing on our schools, which is very important here in San Francisco and portland oakland. A lot of companies have not made the shift yet. Fortunately we have so we are attracted on to bring yours. Brad you talk about that commitment. About 4 billion in acquisitions recently, why has salesforce been so inquisitive . We only by a company when two things happening. It has to be a Great Company with great technology. Two, the process be right. Coming into this fiscal year, it was not part of our Business Plan to buy companies but a series of things happened that opened the door. The biggest thing that happened come t a phone call phone call that demand where had a major offer from another company and were we going to be part of the process, and we said yes. This is an amazing product used by so many of our customers are ready. Andomers like Louis Vuitton adidas. When they saw the ability for demandwear to the together, you can go to adidas website and see it in action. They will probably sell more than 1 billion this year on that place platform. The technology is incredible and we knew it was a good fit. Brad i want to talk about one of the deals you did not do, linkedin. Microsoft acquired the company. Going back, would you do anything differently . Yes, but it goes in the category of you cannot win them all. This is especially true when youre going up against microsoft with all of the power and money and resources. You are at a disadvantage but we gave it our best shot and we wish him the best. Brad does it make microsoft a more formidable competitor . Account that was formally of hewlettpackard. Are they a serious threat to salesforce . So. Dont think we remain the fastestgrowing Software Company in the top 10. The other thing that is exciting as we are number one in crm, and the vast majority of crm deals, we win most of them. Brad i want to bring up oracle. I know them very well. Brad what does that deal do for oracle . Think t really oracle is making a desperation move to boost their cloud. Now they will be able to boost cloud revenue and make the 10 billion goal. They may not be able to make it. Things like a say desperation on live tv, do you get a call or text . Relationshipmy with Larry Ellison is far more enduring. He also does not pull his punches. He does not. How i look at it, business is a lot like tennis. You get on the court with your friends, you play as hard as you can, you get really upset, you say crazy things, you go off the court and you have lunch and a glass of wine and remove how much you love them. I love Larry Ellison, he has been a great mentor and friend and there is probably nobody in the industry who has done more for me than Larry Ellison. Benioff that was mark speaking with brad stone earlier this year. Dig intos me now to that interview and salesforce more. That is the academy of frenimies. Brad his point is a very funny one. They take potshots at one another and then clearly theyre playing tennis of the weekend. Caroline having a beer or two. I come over from germany where sap rules the roost but theyre desperately trying to get on board with a cloud offerings and have done very well. Oracle has been slower. Is the fight to own the cloud space, the competition is hard. Brad one of the challenges for salesforce is the Legacy Providers have woken up to the crm. An 8 billionon sales run right and that will slow down by definition. They are looking for areas of expansion and they have expanded the Product Portfolio with an aggressive acquisition strategy. 5 billion in 2016. Intohave expanded ecommerce, artificial intelligence, and basically trying to give their customers more comprehensive suite of products. Caroline ai seems to be more of the turf. There was a brilliant piece recently about the focus of Honor Official on artificial intelligence. 200 billion is a big piece of the pie. Does salesforce have to diversify itself . Brad i dont know that ai helps them. Every year, they do something fashionable, this year is ai and last year it was the internet of things but now we dont hear anything about that. This will help the Salesforce Cloud get smarter, that is what they say. I think there is a little bit of marketing message there. We should revisit this conversation next year and look at, what is einstein, did it help salesforce . Caroline there is big focus. He just said on the call with my dream is to double revenue in 34 years. Nearly acquisitions are the way forward. That is like a company owning San Francisco, but maybe in europe they did not think about it too much. Brad we might get the opening of the tallest building in San Francisco in 2018, the salesforce tower. Microsoftlinkedin, acquired them. People criticize salesforce for even pondering twitter. But salesforce was to get smarter about who is the customers are and who they are talking to. Theyre looking for a social asset and there is a gap right now in the portfolio. We are going to see salesforce double, maybe they need a social asset or more of a brand in the consumer world. Caroline meanwhile, the social players get more enterprise focus. You have facebook for work, you saw google make inroads when it comes to enterprise youd it seems to be the enterprise. It seems to be the focus. Brad there are always two different paths, you start as enterprise and going to consumer, or the Consumer Companies with enterprise aspirations. We will see if that is marketing or reality. Caroline what are these events like . Brad if you are here for next year, it is crazy. It is very hard to get around because they close the streets. Salesforce puts on a good show and concert and it strengthens San Francisco of and the Business Community as a Global Business hub. Caroline at a time like this when it is festive, you have to take your hat off to someone like benioff. It is an Interesting Company to delve into and i hope im still there for the big dream force spectacular in 2017. Brad stone, it is great to have you here. Youre sticking with me. In a week that included major shifts in ubers self driving car plans, the ceo plans to spotlight its plans. This is bloomberg. Caroline and one final story we are watching as we head into the holiday weekend. Tesla may be ready to unlike more self driving features in their newest cars by next week. In his typical fashion, elon musk tweeted on thursday night, it looks like we might be ready to roll out most of the autopilot functionalities toward the end of next week. Hardwareerring to the he introduced in a surprise announcement in october. He said the newest vehicles would be equipped with full soft driving capabilities. This week we reported that tesla had already reported 2. 3 million files miles of data. Shares closed this week about 5 higher. That does it for this edition of Bloomberg Technology. This weekend if you have any time between festivities, we bring you some of our best interviews of the week, including conversations with tch ceo in the chair emmett shear. Happy holidays. From our studios in new york, this is charlie rose. Welcome to the program. We begin with two Supreme Court justices and conversation at the new york bar association. Ginsburg to ruth bader and sonia soto mayor. Myself as a of teacher. My parents but teaching would be a good occupation from me. They were not welcome as doctors and lawyers. Realize