and field under their own flag as a member of the russian olympic committee. lynchttorney loretto traveled to orlando, the scene of the deadliest mass shooting in history. she praised first responders. are also offering emergency counseling to first responders to help them deal with the trauma they experience. it doesn't know bravery, they shoulder the dangers visited upon all of us and they carry that weight long after the smoke has cleared. >> the attorney general also met with those wounded and killed. -- i am mark crumpton. bloomberg west is next. ♪ emily: i'm emily chang and this is "bloomberg west." coming up, elon musk makes his latest play. tesla offers to buy a rooftop solar company where his cousin is ceo. does the deal makes sense? he will discuss. daily on million instagram. more than doubled. we sat down with the ceo of instagram to talk about unprecedented growth. and 10 sent it to become a global player. and can china's largest internet company become a global player? they will pony up nearly $9 billion for a stake in tencent. elon musk is the largest shareholder of tesla and solar city. musk is the largest shareholder of both companies. says the proposal is in the range of $50 a share. onarcity shares closing up wednesday. tesla ceo elon musk said the basic message is there is a huge opportunity to have a highly integrated sustainable energy company. that answers the whole energy company from storage to transport. solar city is surging in after-hours trading on the news. for more details, i want to bring in our editor-at-large, cory johnson. cory: they want to cover everything from the creation of energy to exxon mobil, maybe. this is a strange thing. musk is investing in one company to bailout another company that has fallen substantially in the last year. just a look at the numbers shows how crazy this is. if you look at the cash tesla has on hand and throw in the debt, you have a company that cannot afford solar city. tesla has $3.2 billion in debt. if you look at the cash and debt, solar city is $5.8 billion in enterprise value. tesla has $1.4 billion in cash++ and has to build more factories to build the amount of cars it needs. now, they have to somehow raise more money to acquire a company that's in a very different business. installing rooftop solar is a very different business than manufacturing cars. installing rooftop solar is a very different business than manufacturing cars. to try to do both at once is very difficult. emily: tesla is not just manufacturing cars anymore. they are making batteries. on the call, musk said this is something we have been debating about and thinking about for years. the timing seems right because tesla is ramping up activity with power storage. if you think about it that way, does it make more sense? corey coleman it is unclear what kind of business power wall is going to have. use coming out of the panasonic tesla plant in nevada is batteries for tesla cars. they are in the power supply business is ambitious. carmaker, after-hours, shares are down 11%. i think a lot of tesla shareholders are going to say, wait a minute, i think this business, the stock is taking right now. emily: elon musk has said he will abstain from the vote, but let's talk about his involvement in both of these companies and what this means. cory: keep at the board together on both companies. emily: his cousin is the ceo of solar city. cory: the notion that these companies could be independent, i think, it's good of him to recuse himself, he absolutely should, but i don't think we should look at those boards and say they are absolutely without influence on each other or don't follow the desires of elon musk. emily: my question is why now? tesla is supposed to be focusing on the model three. he said he was sleeping in a sleeping bag at the end of a -- the production line. what is the impetus at this very moment for them to make this offer? cory: financially, both companies need a big change. some critics say tesla does not have the cash it needs to build extra plants to support the accelerated production goals they have announced. accelerated production goals they have announced. they want to open a factory in china, which we reported on yesterday. which makes me think, where are they going to get the money for that? to be very expensive for tesla to do all of the things they want to do. they will need to do a massive capital raise to fund this and everything else they want to do. this is a wild story. emily: tesla offering to buy solarcity through elon musk's company. corey breaking it down. there is always spacex. why not make it three? coming up, a supersized deal, another one. a chinese internet company is shelling out for tencent. building up for the clash of clans. coming up. ♪ ♪ emily: china's largest internet company sets its eyes on the west. tencent is looking at the maker of mobile hits. tencent already dominates the scene in china, but this could give the company serious exposure abroad. the other half of the story is who tencent is buying supercell from. in a surprise move, the japanese internet conglomerate announced that its president would be stepping down. joining me for more context is our editor for asia coverage and the ceo of a mobile game corporation. so, what really happened? is son said he was heir apparent to the company, and he, interestingly, has been cracking a few jokes on twitter. what is the next big investment, are you going to just roam the world? he has to plan, he tweets. >> it certainly was a surprise when he was recruited by google two years ago. he came in first to make investments in internet companies and other technology companies. a year ago, he was promoted to president. he was talked about as the heir apparent. he said he was looking for somebody who could succeed him in the ceo role. the interview our reporters had with him, he said he wanted to remain in the ceo role for a longer time. very young feel still, i want to continue running the company." arora had hoped to take over the position more quickly, and for that reason, he was going to leave the country. there are questions about arora. outside investors had asked to investigate and possibly dismiss him. they did not think he was qualified to take over the job. the board of directors had an independent group investigate him and clear him, but there seem to be some questions behind the scenes that have not quite been answered yet. emily: christian, as one of the earliest investors in supercell, and a board member, what do you think of tencent taking control of supercell? >> i think it's smart, to be honest. as you said, they are already very powerful in china. they don't have the same exposure internationally. mobile gaming is the largest part of the hundred billion dollar games market. right now, having tencent as a partner domestically is a big deal. similarly, tencent gets exposure abroad. they are one of the few companies in the gaming industry that can consistently create hit after hit in the mid-core gaming sector. from that perspective, it really could be a very good deal. perhaps tencent can help supercell in a way softbank could not. emily: softbank is unloading a stake in alibaba. peter, your firm is reporting that there may be a basement deal in asia. what are you expecting? >> softbank has been focused on cleaning up its balance sheet. they sold the stake in alibaba. it was about $10 billion. now they are selling their holdings in supercell. they also sold off another game company. entertainment. they are trying to raise some cash and straighten out their balance sheet. sprint has been a challenge for them. the interesting thing, from a tencent side, they are spending all this money and not getting control of the company. supercell.n for the founders will still run day to day operations. the founders want to preserve this unique culture that hristian was talking about earlier. emily: in the world of gaming, one hit wonders are legend. we have seen companies suffer from this before. can they keep the innovation going? >> i think they can. the gaming industry is about talent and culture. what supercell has done so well right from the start is to have a team of creators and a culture of trying, trying, trying again. famously, they say they celebrate every failure. they have killed more games than they've launched. they had a large hit this year and before that, heyday. the big question is, for the industry, mobile gaming has become the largest segment of the games market. what next? supercell has proven they are very good at the gaming experience. what happens when the course of continues to grow on mobile? we expect to see in the next 3-4 years, core gaming growing in a big way. emily: all right. thank you both. up next, we sat down with the instagram cofounder and ceo for a wide interview about the company's 500 million user miles down, ad strategy, and whether or not he regrets selling to facebook. all that and more, coming up. ♪ ♪ emily: now to instagram. four years ago, facebook bought the app. we sat down with a cofounder and ceo for a wide-ranging interview. i started by asking about the half-billion user milestone. kevin: i think the last time we talked, we had a couple million users. it has been a little over five years. getting there at breakneck speed. we built from a company of 13 people to now just shy of 500. it's crazy the scale. we have nearly one out of three people in the united states using instagram every single month as well. it's ubiquitous, and that's every entrepreneur's dream. emily: you added the last 100 million users faster than the 100 million users before that. why do you think that is? kevin: images are a universal language. everyone.at speaks to they allow us to communicate globally. helped asacebook has well. emily: which countries or cities are incredibly popular? >> brazil is one of the biggest countries. they use different phones and platforms, but they are totally into social media and they love sharing images. my cofounder is from brazil, and when he goes home, he is an all-star. emily: what are your plans during the olympics? >> the olympics are always a big moment on instagram. you have all of the athletes and countries represented. now that instagram is so big, i think it's a great platform. emily: what about a brexit? could that affect you? >> it might. we have a thriving platform in the uk. i don't think it will be a big deal for amsterdam. emily: what has been your experience working with european regulators? >> when we were talking earlier, i expressed how much my job has changed. i did not realize how complex it would get to run a company of 13 people with 13 million users users around the million,w over 500 taking each country on its own and understanding their local laws and local regulations. we want to be globally available, so we have a big team focused on that. it has been one of the most interesting learning curves as a ceo as we have grown. emily: the platform only started incorporating ads in 2013, but according to one marketer, it will account for 9.5% of facebook's revenue this year. that number is expected to grow to 14%. take a listen to sistrom's strategy. >> it's early, but it's promising. the cool thing about advertising on instagram is that early on when i went into the boardroom, that long, mahogany table where you are pitching your business like it's going to make money someday, and you get the eye rolls. we knew this would be a powerful platform. because it combines a couple things about advertising that make advertising work. one is inspiration. you log on every day and get inspired. the second is an engaged audience. when you get to the scale of 500 million people around the world, you can really reach any customer. we do that through targeted advertisements. relevant tot he customer where they can take action. emily: so, to the extent you can, give us some numbers. how much money are you making? >> that is off-limits right now. once we started, it has grown nicely. it's early, but it's promising. emily: people talk about instagram and your revenue model like it was easy, once you combine the power of facebook and all of its resources, boom, you can make money. what have the challenges been to transitioning to making money on a broader scale? >> when you have a company that has built its technology for a single platform, it's not as easy just to plug it in. the cool part is we have figured out how to plug it in in a native way. we did not support non-square photos up until a year and a half ago. people want to post creative across different platforms. changes like that, longer video, etc., are driven by consumer need and advertiser need. so those changes have been interesting to navigate. emily: and you still have users who are not happy about ads and protest very loudly. how do you balance that and keeping the user experience simple? >> our number one value is community first and we talk about it a lot. the first thing you should do is listen. as a company, we need to make sure we understand the experiences people are having. we are data driven. when people hide ads, we know which adds they are hiding. we change the ads we show to people. we get great feedback both internally and externally. every employee sees ads in their feeds as well, and we are able to get great feedback. emily: instagram will account for 9.5% of facebook's overall revenue. by next year, that will grow to 14% globally. do those numbers ring true to you? >> like i said, we are not talking about specific numbers yet. we are trying to lay a foundation so we can grow from it. as we dial in, i think we will create a platform for a long lasting business that will appeal to everyone. emily: you do not make money on influencers who get paid to post products and may or may not disclose that they have done so. what is your view on this? how should instagram be participating in the influencer economy? >> it's really challenging. i don't think you've seen this because not many other networks are at the scale where they have the amount of influence that influencers have on instagram. that method of advertising is not nearly as effective as going through the instagram system. you can't target users. you have no analytics or insights. you can't link out to an external website. while we see it and we understand it, we need to make sure we work alongside it and work with influencers to allow them to get the value they need. because of course, we want to make sure people build long-lasting presences. emily: is it something you would crack down on? >> i would not say crackdown so much as partner. right now, it is a very small percentage of the total value flowing through instagram. while we cannot ignore it, at the end of the day, we need to be the consumer's advocate. it's not ok to not know that something is an ad. that's what we are going to crackdown on. emily: what will you be pitching to advertisers about instagram? >> i don't want to spoil the pitch. we have a great team going to talk about instagram and how it pairs with facebook. my job is to think about the consumer experience and making sure that ads are great in the long run, that they pair nicely with the feed and content we present. my focus is on building great product. emily: my interview with instagram ceo kevin systrom. still ahead, we continue the conversation. i ask if snapchat is a threat to the business. you can listen to bloomberg on the radio, at bloomberg.com, and on serious xm. more of "bloomberg west" next. ♪ >> at this is bloomberg west i met emily chang. back to my conversation with instagram ceo. part three of my interview, i asked him to talk about his vision for video and and his thoughts on the competition. >> everyone wrote video of. there were a lot of photo services that would add video but it never really took off. what we have seen over the last six months is video watch time, people spending time has increased 150% in just a few short months. instagram is becoming more and more video dominant, video heavy. i think that is a sign of the times. people are taking more video, consuming more video. all these influencers we were talking about that are going to vidcon are using video as well. i think it is a generational thing. emily: and you are moving into longer form. but to 60 seconds. what is the vision? is this around big events? presumably like the super bowl? >> the idea of expanding to 60 seconds is all about being community first. 15 seconds is too short to share anything compelling and dynamic. so as we talked to influencers, , celebrities, etc., they have things they want to share. if they want to share their content on instagram, we want to make sure they are able to do it in more than 15 seconds. emily: facebook and twitter keep talking about live events, live video, event-based products. you have dipped a toe into this doing compilations after a defense. what is your strategy around live in particular, and how do you get more of it? >> i believe our opportunity at instagram is to capture and share the world's moments both in the moment and after the moment. if you want to know what it's happening in the world, we want to show it to you. that is what you can use our explorer page four. you can see a big dance music festival happening in las vegas right now. we have compilations after the fact of chefs making dishes. it's all about knowing what's happening in the world right now and being able to come to instagram as a media destination. facebook has dipped a toe into it -- well, they are going heavy \i -- well, they are going heavy into it as well. you have to figure out how it will be different at instagram than all the other offerings. the crazy thing about a service that starts at 21 minutes a day for the average user is that time is of the essence. we only have limited time to pull out our phones and do something. the facebook family continues to share and grow on time and be the destination where people love spending time in mobile. anyone who competes against that is a competitor, but at the end of the day, we are focused inward. can we deliver on creative content and products? is the experience compelling? does that help people spend time on instagram? that's what we are focused on. emily: it sounds a lot like what jack dorsey says about twitter. do you see yourself competing more head to head with twitter? they don't have the user numbers you do. i am the reason why smiling is because, what social media outlet does not say this, right? it is the opportunity of our time. the thing that didn't exist 10 years ago, that could exist right now, is what happening in any corner of the planet right now? i believe a visual imagery as one great way of going about doing it that. emily: one user told us they were concerned that facebook and instagram were not more scared of snapchat. are you afraid enough of snap to? is too not inc. our job be afraid so much as to understand what is going on in the world. i think we are competing against many different services for time and eyeballs, but getting to 500 million users around the world is big. 300 million of those our daily actives. 300 million people open instagram every single day. 21 minutes a day. that's big. we are absolutely not sitting happy thinking that will last forever. we need to keep innovating and introducing products. that is why over the last five and a half years, we have shown our track record is to do that and to continue growing. there will be other companies, but we are going to focus on instagram. emily: is there anything about snapchat that you admire or have learned lessons from? >> snapchat is an amazing company. i really respect everything they are doing. they have taken things we love and really catapulted them. visual sharing. i love that more people are taking photos today than they were two years ago because of companies like snapchat and others. periscope is a great example of this. we are all pushing on the same direction. what is cool is we are actually seeing the vision come to fruition. which is everyone is communicating visually. instagram is a part of that ecosystem. emily: what happens when all of these companies are trying to do the same thing? do some survive and some do not? >> well, there are a lot of flavors. everyone thought facebook and twitter could not exist on the same planet. when we talk to people, they talk about how instagram fits a unique space in their life. what they love about it is they can connect with interest accounts, a chefs, an amazing animator, trick media, those kinds of things. you can only find those on instagram. emily: is facebook competition? is whatsapp competition? people in your own family? >> we don't think like that. we spend more time trying to think of how to work together than how to work against each other. we obviously you overlap in some use cases but the surprising thing about combining these companies is how wonderfully toe, they work together achieve a greater mission. sharing content, sharing networks, making it easier for the consumer to ask is what i want which is compelling content. emily: that was my interview with instagram ceo and cofounder kevin systrom. coming up, a monumental vote could change the face of the european union. we will break down the potential brexit impact on venture capital here in silicon valley. ♪ ♪ emily: mayors from 10 global cities are working together to regulate sharing company apps like airbnb and uber. guidance could come as soon as i told her. our reporter has been following -- as early as october. our reporter has been following this story from paris. >> companies in the so-called sharing economy have gotten used to dealing with regulators around the world from france and the u.k., all the way to india. they have had regulatory challenges, pushback from different industries. we are seeing mayors from new york to paris teaming up to work together and come up with a common response to companies like airbnb and uber. that's going to be a change for those companies. they are used to dealing with these cities on a one by one basis. emily: our reporter reporting from paris. staying in europe, this thursday, britain decides whether or not to stay in the european union. fears of a brexit have investors skittish. how are venture capitalist in the tech industry bracing themselves? joseph, thank you for joining us. great to have you back on the show. what does brexit mean for silicon valley and tech? >> it depends on the state of the company. i think when you think about companies going public, anything that creates a cloud in terms of commerce, trade, immigration, that's the place where public company investors, any uncertainty and doubt about that causes people to slow down, and i think that's the place where we expect to see potential issues. emily: you don't invest in europe. why not? >> the role of a venture capitalist is to be super involved in companies. it's hard to do that from 2500 miles away, let alone 25,000 miles away. emily: you are an investor at greylock, but you have also been involved in a company called gladly. what is a big idea in customer service? >> if you think about the 21st century consumer and the way we communicate with friends, that is not the way we communicate with companies. we are always on every channel, communicating, e-mailing. companies are using technology that was developed 10, 20, 30 years ago that focuses on the idea of cases and tickets. it's anachronistic from the early 1900s hospitals where they took your case file and attached it to the bed. that is not the way we expect companies to talk to us. we are trying to reinvent the idea around people at the center, not cases or tickets. so that when you are having a conversation with a company, it's a single conversation. it can enable the agents to have an empathetic, knowledgeable conversation. i see you are calling about this reservation or this purchase. it's reinventing the conversation. emily: we see this happening at kleiner's and general catalyst. what is the process like? >> we have that history at greylock where we are either incubating -- emily: workday. >> workday is a great example. palo alto networks was also incubated with the office. usually, when you see a massive market opportunity and there is a team of people we know well, we will act as cofounders and entrepreneurs alongside them. it has turned out quite well, historically. emily: lastly, microsoft bought linkedin for $26 million. $26 billion. is that a win for linkedin or for greylock? >> we are no longer investors, full disclosure. from my perspective, it's a great combination. microsoft's role in work and productivity and linkedin's role as a network of professionals, i think we will see good things come out of it. emily: all right. i will look forward to having you change my customer service experience. thank you for stopping by. coming up, he is a rock star of the product world, now turning attention to a software that is rocking is business communication. ♪ ♪ emily: two stocks we are watching after reporting earnings. adobe seeing record revenue and year of 20%. despite this, shares are taking a hit after hours, down 4% among signals that momentum for cloud-based products is slowing down. in the meantime, the company is reaffirming full-year guidance. another story we are watching, slack, the business communication platform that has rocketed into our offices continues to grow. the company has 3 million daily active weekday users. it is looking to build a base of corporate customers, and now the platform itself is expanding with message buttons that will let customers go beyond communication to submitting expenses, booking travel, without having to leave slack for another app. joining me now is vice president of slack, april underwood. how far does this vision go? what is next? april: it's a great question. when we think about slack at its most basic level, it allows people to communicate in a new way. it's the best place to use all the apps you already use at work together. today, message buttons really allow the messages to come from all the applications used, google drive, greenhouse, all the applications you use to get your job done every day. it's actually allowing every person who uses slack to get more done inside slack. emily: what are your other priorities? april: the platform is really important to us. the world has really changed. there have never been more applications you can use at work than there are right now. it's rarely easy to build an application and get it into the hands of customers. that platform, and allowing all the apps to work well together, is really important to us. emily: everyone is talking about ai right now. how else could it be integrated in the plat arm? platform?ted into the april: we think ai is important, and that's one of the reasons we are making our own investment into it. we have customers, for example, that are making use of slack to automate some of their workflows. as workflows get smarter and smarter, examples like logistics, ai can make it more automated. that gives people time to do the hard, creative work they enjoy doing. emily: what about bots? april: people are talking about bots a lot. to me, bots are a way to describe the ability to interact with software the way you and i can interact. you and i can text each other. can i text software and get things done? when people talk about bots, they mean a lot of things. that in slack, one of our customers is in the e-commerce space. they are using a it is software that sits alongside the humans and allows the team to get things done more efficiently. it does what a human would do but faster and more accurately. that's something we humans fail at doing. emily: you worked at twitter in the early days. we have seen companies like rework and benefits pulling back because they went too fast. what are you doing to be careful about how fast you grow? april: ultimately, our mission is to make people's working lives more pleasant and productive. as we have grown from 152 500 even in the past year, where all unified around that mission and that goes a long way toward helping us bring in new employees and putting them straight to work toward the goals that matter to us. but we are also focused on diversity. we are trying to build a different kind of culture where people can do their best work. we work hard at it every day. i think if we stick with that, we can absorb the growth and we can take it to new heights. emily: what was your reaction to microsoft buying linkedin? april: like many people, i was surprised, but it makes sense. linkedin built a business that would be valuable to an acquirer in different ways and i think there'd data business is certainly something that will be microsoft.et to emily: doesn't mean anything to you guys, though? april: i don't think it does. emily: some other startups were snickering. april: we don't see that much of a connection between what they do and what we do. but great news and exciting for the linkedin team. emily: april underwood, thank you for stopping by. great to have you on the show. it is time now to find out who is having the worst day ever. today, the prize goes to the clinton foundation. it is said to be among the organizations in the latest -- suspectedeach breech by russian hackers. hillary clinton's presidential campaign is reaffirming concerns about her digital security. the fbi continues to investigate her use of a personal e-mail server while secretary of state. that does it for this edition of "bloomberg west." tomorrow, we kick off our coverage of the entrepreneur summit with steve case. that and much, much more. you won't want to miss our conversations with read hoffman and much, much more. that is all for today from san francisco. ♪ ♪ rate hike on hold. yellen's choice of word taken as a sign that is maybe pushed further into the future. and the pound near a five-month high as he's say the chances of leaving europe on one and four. oil is trading at 50 bucks a barrel ahead of the official data expected to show u.s. stock buyers