Process known as data throttling. They began throttling customers in 2011 for those who went over their limits and failed to adequately notify them. Ibm has added 5 billion to its plan. Investors are giving an incentive for being patient. The company is repurchasing 19 billion worth of stock and still has 6. 4 billion available in the stock repurchase program. Now to the lead. Facebooks push to expand mobile advertising led to a big quarter for the social network. Facebook reporting thirdquarter revenue of 3. 2 billion. 59 yearoveryear. Net income, 806 million. 91 yearoveryear. Mark zuckerberg expanded facebooks ad initiatives by opening up its network of advertisers to Software Developers who can run ads on their apps. Still Facebook User growth was , slow, up only 2. 3 from last year. The slowest pace in facebook history. I asked Sheryl Sandberg and i am joined by president adam burke. In San Francisco. Our editor at large cory johnson is here and David Kirkpatrick joins us from new york. I have to start oeste ball facebook shares are falling in , afterhours. This apparently after the cfo of facebook suggested that q4 guidance is not going to be so good. What do you make of what is going on . The stock is down 73 a share. This is a 9 drop. What theyre saying is the numbers we will put up next quarter will be lower than all the business announcements would suggest. The analysts on the call were stirring to ask questions like you just did this, it is , pointing this direction. How come youre saying the numbers could be lower so they are trying to figure out, the company not saying the reason. In my conversation with Sheryl Sandberg, 66 of total ad revenue is coming from mobile which you will admit is pretty incredible. It is completely amazing. They had zero dollars and mobile ads the First Quarter of 2012 and here we are looking at one of the biggest is this is ever. Biggest businesses ever. Two thirds of every dollar they get is on mobile. Can they keep it up and they have been suggesting caution when looking at how quickly this will ramp up and what cheryl told me in response to that question, can you continue to grow this fast and mobile, she said comparisons are based on the growth of next year and as last year and as we put ads into news feed that was a big ramp for us. How concerned are you about the Current Quarter and mobile advertising . I do not understand the question. Asking why i would be concerned. It was a powerfully positive quarter. This is a Company Whose numbers on every metric continue to be up to the right. The next thing about next quarter, i am not a quarterly numbers guys much as some but they said on the call that Fourth Quarter was a strong quarter. I think they like to keep expectations as low as possible and consistently beat them as Many Companies do but they did do some Amazing Things this quarter. If you think that they have added 160 million users. New monthly active users. That is a lot of people to continue to be adding to a company of this scale. The other thing zuckerberg talked about, the businesses they are trying to build, instagram, whatsapp, messenger. And whatever the fourth one is. This is an astonishingly, saying Promising Companies still. Company still. If they are at 73, that is an opportunity. One of the things i spoke to cheryl about was video ads specifically. She told me Consumer Video is exploding. Were watching consumers upload and share ideas in a way they have not before. We always Pay Attention to the Consumer Experience at this and as consumers are putting videos into news feeds we feel comfortable with marketers putting videos into news feeds as well. What do you make of these comments . There is an inherent tradeoff and the more you monetize the more you put engagement at risk. The way you can get around that is by increasing the amount of revenue you get per ad impression. The matter is you get more per ad impression on video than you do with other ad formats. It was a pretty logical next step for the newsfeed. We will expect to see more video ads and the autoplay type functionality that we are seeing emerge are getting consumers ready for that. You made that comment. Whatsapp has lost money and i asked sharon about minority cheryl about prioritizing user growth. We found some of those numbers today. In addition to the Earnings Presentation in the conference call, they put out the financial filing that was separate with some of the numbers before the acquisition to cold and that was too cold and that thing was losing a ton of money. It lost over 230 million in the first half of this calendar year. Incredible stuff but they can do it because of the value of Facebook Users is growing and we saw it again with the report. They got three dollars and . 57 3. 57 for every user in the last quarter. That is 34 more than they did last quarter. So growing the value of users, your point about advertising and how it is working on mobile and working with video ads. They are getting more money from advertisers figuring out how to use facebook. And facebook is reaping the results. You are concerned about user growth and in response to concerns about that cheryl said there is a lot of room to continue to parts of the world we have not gotten to. Obviously facebook has more than one billion users but they do have more potential out there. How optimistic are you . He did say most of their growth is in asia and other parts of the world. There is a lot of reason to be optimistic. I am not concerned about their user growth rates at the moment. The internet. Org initiative which is a priority that came up repeatedly on the call and mark always mentions it is their big play to improve the world is the way he was talking about it but it is also to improve facebooks business. The more people that are in on the internet, all almost all of them go on facebook as the first thing they do when they get online. If you can put more people on, those people in bangladesh and botswana want to come online. They will go on facebook. They visited south korea together and i asked her about that trip. They met with samsung executives behind closed doors. She mentioned that samsung is a very important strategic partner. She emphasized that more than 80 of users are outside the united states. The focus on the user base is important. My conversation with ceo Sheryl Sandberg. Thanks for joining us. As always, thank you both. Next, we hear from john leger about the iphone six and the best quarter in the industrys history. You can watch more on your tablet and iphone at bloomberg. Com. Welcome back. You can catch our early edition. Tim cook criticized his own state of alabama for its track record on racial inequality and its inaction on granting gay rights. There is little if anything that matters more in our country than our basic tenets of equality and human rights. I have long promised myself to never be silent in my beliefs in regard to these tenets. As a state, we took too long to take steps toward equality, and once we began, our progress was too slow. Too slow on equality for africanamericans. Too slow on interracial marriage, which was only legalized 14 years ago. And still too slow on equality for the lgbt community. He pointed out that employees can still be fired for their Sexual Orientation in alabama and expressed hope that their future would be different. At his comments make an impression in the lgbt community, what does that mean the tech world . I sat down with christopher would wood and former San Francisco mayor willie brown and cory johnson. We have been equated in the same way that this country has of discrediting against africanamericans. It is not unusual. I am pleased that is coming from someone with so much authority in silicon valley. We have talked so much about discrimination against women, blacks, latinos in the technology community. Facebook and google have released their diversity numbers and they have said we are not satisfied but they never focused on the lgbt community. Or would you say it this stage about that community in the Tech Industry . It is important that they do take a look at the lgbt community. They are focusing in on their inequalities in other areas but they also need to include lgbt individuals in that reporting out. It is not out of the realm of possibility for these companies to take a look at of take a look at that. Many companies such as microsoft, google, at t, and even apple have supported their lgbt employees when the state did not necessarily require them to. Providing them benefits, services. Why would they not include them now and making sure they are equally proportionate in their hiring . To have Business Leaders take the flag and leading this charge about any quality of their work workplace. In the that was no corporate participation in the civil rights movement. You recall that Martin Luther king, junior who became the symbol really did confront america on that question in the corporate world when he was arguing that the business of their salaries and regular pay and promotions and all those kinds of things and you did not hear anybody do what protested on behalf of that issue. Why . Meant a great benefit. Mr. Cook is fully aware that we are now in the samesex stage world where it is commercially good sense to be an advocate. Although i think it is sincerity on his part. I do not think it is the business of dollars and cents but it is clear that it constitutes good valid value judgment just as it did for africanamericans to be right on this issue. You were one of the most vocal supporters gavin newsom one of the most vocal supporters of gavin newsom. He pushed to give marriage licenses here. What was the reaction from the Business Community and how does that apply to africanamericans . I cannot recall anybody in the Business Community stepping up and standing next to mayor newsom at that time and said what a great idea. As a matter fact, the political world condemned him for doing it on the basis that they put at risk the potential success for democrats on the political side of the aisle. So he suffered for a long time as a solo act. Suddenly that solo act has evolved. What the whole world is saying is yes and the court is saying yes. Multiple states saying yes but he lived for a long time by himself on that little island. Brown and christopher ward. Next, tmobiles ceo john leger will be joining us. You do not want to miss that. There he is surrounded i colleagues at tmobile headquarters. I am emily chang and this is bloomberg west. Customers keep flocking to tmobile. They added more subscribers and increased its fouryear forecast. The carriers pricecutting lead to a bigger loss. Joining me now, john leger. Taking a look at your last two years as ceo, you have added 3 million subscribers, up 50 . When you took this job which you knew was going to be difficult, what were your own expectations as to where you would be at this point and how satisfied are you . Well, emily, it is two years since i have been here. From the day came and i had extremely High Expectations for this Company Namely because i saw the brand and i saw the people and i saw the competition as inept as they are and i knew there was a great possibility for the business. A couple of items you missed in your introduction. The big word that i was here with the team talking about today, record results. This is 2. 35 million net adds, 1. 8 million branded net adds and Service Revenue is also up 10. 6 yearoveryear and you use the word by aggressive price measures. That is not what were about. We made this movement on a philosophy for changing the Wireless Industry and the brand is resonating with customers. We certainly had a great quarter but i can tell you, it continued right into october and we maintained as you see by our guidance keeping our guidance and raising the Postpaid Subscriber number 24. 7 which is which annihilated the industry and we are happy about that. What about the outlook or the outlook, what appetite do you have for price cuts . Again, whats wrong with you today, emily . That is the second time you use the word price cuts . Am i dressed in yellow . Do i look like the guy who is in charge of pricecutting . What about the sacrifices and what point do you stop taking them . Listen, emily. We maintained our guidance on ebitda. Anybody would forego shortterm profitability for customer acquisition. To go from the beginning of the year with two to 3 million Postpaid Subscribers and now 3. 4 to 4. 7 and maintain affability ability and a good , that pays back hugely especially when the churn is at alltime lows for the company. The outlook is fantastic for the company and i could not be more bullish on it. What do you think is the best thing for tmobiles future, not merging with sprint, youre not getting bought out by iliad. What about charlie [indiscernible] what do you think about him . You are so predictable. Every time, the same things. I shortened further question. What to expect from us is more moves to steer the course for the ones we have. What we want to do and i think we are, we want to change the Wireless Industry for everybody and that is going to pay back. It is part of the future. I have said to you all along, step number one i am certain of which is sustaining a standalone future for this company as a viable competitor and brand. A set of employees that are the envy of the industry. We have a tremendous amount of in organic options for the company. You mentioned some of the ones that popped up externally that the best way to think about it is is there a possibility to create greater shareholder value by expanding on the value chain or looking at other ways to use our capability and brand and distribution, possibly with some others. In the short term, all we know is that we can sustain a very profitable shareholder value creating future standalone and there are a number of options including the ones you have talked about that we will continue to look at and see how shareholders think about them. We have 30 seconds left. What is your appetite for more uncarrier moves, i did not say price cut. Absolutely yes. There are so many paying points, you and i are both on twitter. Watch the feed and you will see what customers want and in that feed will be on carrier 8 and 9 and if you think the first seven were big wait till you see what we have in store after this. I am watching you on twitter. John legere, thanks for being here. With your colleagues and adoring fans. Ok, everybody. [cheers] rex coming up, twitter ceo dick costolo. More after this. You are watching bloomberg west. I am emily chang. Twitters growth is slowing. Twitter reported thirdquarter revenue to my 361 in dollars but the net loss widened to 170 5. 5 million. The number of active users group 23 but the growth is not coming quickly enough for investors. I sat down with dick costolo and started by asking what wall street is getting wrong . We take a long view about the business and trying to build a lasting enterprise. When we think about our aspirational goal to build the largest daily audience in the world, it is all about certainly at its core that audience is composed of our monthly active users that we reported last night. Beyond that, there is also the hundreds of millions of people who come to twitter and do not log in and beyond that, there is a world of the syndicated audience. That audience we reach across the entirety of the weapon in now with our mobile Software Development kit fabric we reach into the mobile application ecosystem. It is the combination of the core and monthly active users that create a conflict content. And our syndicated audience. How do you measure that audience, how do you measure eyeballs internally, how do you know how much this audience is growing . We know and measure how many people come to our properties and do not login and what they do on the site and we have an understanding of the reasons they come to the site and how they use the site and service. The same thing goes for the syndicated audience. We under stand how that grows. Can you give numbers on that . We have studied that this is one to two x. The size of them are active users. How do monetize these eyeballs . So many of them come to the service through some expression of interest or intent. They have done a search for some hashtag or a particular user that has taken them to twitter so for those folks who represent a large number of the folks who come to twitter and do not login we have a very specific intent or interest they have expressed and we believe we can monetize that audience the way we monetize the login audience. Is there [inaudible] a vision for promoting tweets everywhere beyond just my feet when i login . Feed when i log in . Lets talk about fabric. You are giving Developers Tools to build out the twitter ecosystem. How will you know in six months that it worked . What are you tracking . If tracking becomes the if fabric he comes the foundation of the mobile application landscape because it is the best way to help developers build the best apps in the world across platforms, that is how we will know that we are successful. If we are the Solution Developers go to, to the day they want to monetize, if we become part of the fabric of the mobile application infrastructure, we will be successful. How does it drive growth, how does it change the business . How do developers help you bring more users into the twitter ecosystem . One is in the immediate term. It helps us grow our syndicated audience. With fabric, developers can embed twitter content with one line of code. They do not have to write their own code around our api. It helps grow our syndicated audience. If we become part of the foundation of the ecosystem, around the world, a not in or enormous opportunities will be realized. It seems like it is not good enough for investors. Why not say we will not give guidance like google . We have made a decision to give guidance. It is about credibility and helping your investors understand how you think about the business and i do not want to be hopping around on what, we do not like the way you are reacting so we will take our ball and go home. I do not think that is appropriate. We are trying to build credibility over the long term with our investors and help them understand how we are thinking about the longterm viability and success of the company. Lets talk about the medium term. In six to 12 months, where do you want twitter to be . You said you wanted to be moving faster. What are you changing to make that happen . Three priorities, one is to strengthen the core. That group of 284 million monthly users who come to the service and again. And log in. Priority number two is reduce the barriers to consumption and what it means by that is for the user to come and do not login, make it easier to create quick, fast consumption experiences for them that do not force them to have to search for them. They get them the moment they get there. They get highquality timelines when they come to the side and thirdly it is adding new applications and Services Like fabric, like our platform gnip and beyond. Some people find it confusing. What about doing away with usernames, how big an obstacle are they to adoption . We have a set of existing priorities you want to focus on in the immediate and midterm to address what i have laid out as our priorities and those want to talk about strengthening the core. It includes things like organizing content form new for new users. They get a great timeline without having to search around for the kinds of things they are interested in. It includes making it easy to move fluidly between the public conversation on twitter and the private direct messaging channel and pull content and opposition from the public channel into the private channel. More on my interview coming up including his plan to get more moms tweeting. You can watch on bloomberg. Com, apple tv, and amazon fire tv. I am emily chang and this is bloomberg west. Streaming on phone, tablet, and bloomberg. Com. Twitter has had its share of criticism. Not just by investors but by users who find the platform confusing, even complicated. What is the ceo doing to enhance the User Experience . We believe if we execute against our plans and strategies that could or should be valuable and vital to every person on the planet. We absolutely care about all sorts of demographics. It is incumbent on us to make it easy and obvious and simple for those users that come to the platform and get value from it right away. Whether they login and start tweeting or if they come to the homepage for the first time. Can you give us specifics about demographics where youre seeing progress and what cohorts would you like to see more. In countries where we are at scale the demographics of the platform near the demographics of the country. In the countries where in some of our highgrowth emerging markets where we are getting started, the population on twitter might index one way or another visavis the overall population. In the countries where we are at scale the demographics of the users on the platform mirror the population. I know you recently visited china. How optimistic are you that twitter will be unblocked in china one day and what is your strategy if not . We would love to be unblocked in china of course. Our fabric is used i developers around the world. By Application Developers in the u. K. And china. There are lots of ways to think about the business that we are building and how we think about the way we work in china the on the bounds of just the problem. When it comes to revenue, it is still half of facebook. You could show more promoted tweets if you wanted to. Why not show more tweets or promoted tweets or ads sooner . We have been methodical and careful about the way we have grown the business. From the day we started. In april when we first launched our advertising form. We have been the thoughtful and careful about the way we have grown the business and expanded it and we will continue to do that. I do not have i do not feel any sense of changing the way we approached that. You just raise the debt offering. You wanted to be opportunistic about how you use it. How much flexibility as does twitter have to make a multibillion dollar acquisition . The debt funding enables us to be very opportunistic about m a. What we said when we raise the money that we did not have a specific opportunity, we were thinking about when we raised the funding. It will allow us to be even more opportunistic and that is the way we think about it. Could you make a billiondollar deal if you wanted to . I do not want to speculate about anything we might pursue. It enables us to compete for deals we want to be involved in. You brought in some new people and how confident are you that this regime is a lasting regime . I think that management teams grow and evolve and change and that is always the case. I love the team we have in place, we have developed all sorts of tremendous leaders across the company. I could go on about the folks that are not on the front page of the media every day who has grown as leaders. I like the team we have got. What about when it comes to product . We have a variety of leaders across product. We have daniel [inaudible] he is the guy that led the product side of the fabric launch and within the Consumer Product organization as a mentioned on the previous conference call. A host of emerging leaders. You said you are doing experimentation with the product. How much experimentation are you doing on a daily basis and how involved are you . I am very involved in the way we think about the product and the way we take the product to market and the kinds of things we are trying in the product. I am very involved in that. We always have a number of experiments running for the way we think about onboarding new users and driving engagement with new users and users that are coming to the platform for the first time. There are a host of those running at any given time on web and across the ios and android app. What surprised you most when you looked at the results of these experiments . The things that surprise you when you look at datadriven experiments are that it is sometimes completely rethinking a way of laying out an interface that you might think will not have some sort of Lasting Impact that then drives tremendous impact. I will give you one example. When the Profiles Team came to me and said we want to completely relayout profiles to make them more mediaforward and mediacentric and more obvious to people coming to a profile page for the first time emma that this is rich content and loses some of the scaffolding of twitter like their replies, i thought that would be beneficial but when you look at the actual data behind the results and the tremendous increase in the volume of views those pages get, the volume of engagement people have on the front pages now that they have been relayed out that way. A it is remarkable. Nancy ran through the numbers on the call the other day. Those kinds of changes are important and create profound results. What is the best way for us to assess the future and longterm potential of twitter . We think about the total audience across monthly active users logged in, the logged out circle beyond that, and the syndicated audience beyond that. If we are successful, we will build the largest daily audience in the world and have a tremendous business. My interview earlier with twitter ceo it cost a low dick costolo. What is the next great device . The showcase for new gadgets next on bloomberg west. Welcome back to bloomberg west. I am emily chang. The demo conference is where everything is launched from smart monitors to smart glasses for a surgeon. What is there this year . Cory johnson is back with more. This is november 18 through 20. This is a big focus on the technology community. This conference has been so important. I think of it as a gadget conference and you are quick to tell me it is a lot more but i feel like it is a place where we have seen the manifestation of the trends we talked about in technology. It is much more than a gadget conference. It has been around for almost 25 years. As emily mentioned, companies from salesforce to evernote to ways have launched here. I am looking for the next Big Companies to use technology to solve problems. If you picked out one big theme, what will we see . This is around the internet of things. Intel likes talking about it. Everything from wearables to smart phones to even Smart Factory devices but it is a post mobile world and you see it first and the start of two are able to move more quickly. If you come you will see some more examples. Were looking at a motorcycle helmet. That does a lot. This is the skully helmet and they went on to raise 1 million. Theyre raising 2. 4 million. This is a prototype that looks different. There is a headsup display. It has navigation and it has a panoramic camera. It stitches together the panorama so does not look distorted. The most dangerous part of a motorcycle ride is when you look over. You get your navigation and music. It is going like crazy. I get the gadget appeal. What is it about this helmet that is that postmobile trend youre talking about . All these devices from helmets to smart stethoscopes to smart thermometers that we have seen in recent demos, they are taking advantage of the smartphone dividend. All the sensors and chips that have come down in price because they are being manufactured for smart phones. The scale has to been the price down and those components are available to other devices and other manufacturers, even startups. You have a startup that can create Something Like this, it would have cost millions of dollars to produce. You see that Companies Like apple that will make a chip that was able to drop into a wrist band. One of the cofounders of nest, there is a debate on when you have the Smart Devices in your home. There are all these different devices controlling your home. Nest would like to be that hub, apple would like to be the hub. There is a battle of who will control the home. They are throwing off all this data. On the backend you have these enterprises, Enterprise Companies and products who are trying to make sense of it. It is not about big data, it is smart data. How do you make sense of this data exhaust that we are seeing from these devices, not just devices but social feeds, etc. And we see all that at demo. You should come and see it in november. Connecting the dots. Should i . Go for it. Theres the motorcycle. Looking good. Cory johnson speaking with eric schonfeld. Now it is time for the bwest byte. One number that tells a whole lot. What do you got . 20. 9 . That was the pace at which tmobile added Postpaid Subscribers. They are a nonburner phone subscriber. While the loss has increased, because they spent so much money getting the subscribers, that is the kind of growth rate that is impressive compared to twitters 23 growth rate. Thank you and thank you for watching. We will see you later. The following is a paid program. The following is a paid entertainment advertisement from starburst entertainment. Tony bennett. The martin. Dean