No one knows them better than dan tillman. Plus, working from home, bitcoin and more. And demand for electric vehicles. We hear from the ceo. We have to get back to the markets. This is the top story of the markets ending the day near the session highs. Stocks tech stocks are ending high. President elect nominate janet yellen to be treasury secretary. So much news on the day. There is more positive news around vaccine. We have this big, cyclical valley. That brings another record high for the small caps. As you are pointing out, it has taken a few years for them to get a record high. Day, hitting the alltime high. The energy index is up. It will be interesting to see what is there and what happens in the future. Some are saying that the excitement around the iphone 12 is priced in and the buyers are stepping away. Nominate is likely to janet yellen, the former fed chair for treasury secretary. The markets took a move up. There was a moment where the s p 500 dipped ever so slightly. There was some wobbly trading. Janet yellen guided by through the crisis. She was on the fed during the financial crisis. Style, thatow her she is one that really favors messages veryher clearly. This is not enough to get out of that range. We have been watching this range over the last few months. Markets certainly did respond well to janet yellen. Youre talking about janet yellen. The key thing for me what i kept hearing about was the stability that she provides. Did the markets like the stability . Do they like her policies . Think he really like is her messaging. She is solid in terms of the messages that she delivers. She really leads the markets where they want to go. This will work well for the cyclical trade. I think it has more to do with the catch up piece of it. We had tech up in a big way. The banks are still down 20 . Energy, thel for new york bank is up. That is where money can go. Waiting on that ever elusive stimulus. Thank you as always for joining. Another vaccine issuing promise in the fight against the coronavirus. This prevented a majority of people from getting the disease. It stopped an average of 70 of participants from getting ill. Effectiveness did rise to 90 for one of two regiments. It was the second sentence that caught my attention. 70 , 90 but neither of that meets that really high bar set by pfizer. Line upes astrazeneca in your view . This is good news. It is a Different Technology than pfizer and modernity. You take all the results together. A lot of vaccines are likely toward. As for the results themselves, they are of confusing. Main fulle does, the dose was only 62 effective. Second thursday tested they only tested that one on a smaller number of patients. They said that one was 90 effective. How do you do a lower dose . Why would a lower dose be so much more effective . That is not what you expect. They do not have a good explanation of that. Basically, there was a skeptical reaction to that. What does that mean . That means that they are not as far along and they have to adapt the trial to test this new, lower dose. There is a lot of confusion. People were not sure which number to believe. A wealthy country that has access to more effective this might be all that is left. Analystske with the just a little while ago really raised the confusion about that trial, maybe it was inflated and he was not sure if the u. S. Would even legalize this vaccine or have it in the u. S. The company saying, we will release the full data and analysis within a few days. What did you need to see the squash some of the skepticism . There needs to be a clear explanation of why the results are so divergent so you can think about, what are the results for efficacy . The u. S. Trials are bigger than these trials and that is testing these higher dosings. The ones that need to be shown the higher of the two dose regimen, now they might have to switch the u. S. Trial also testing the lower dose regimen. It kind of leaves you in a quandary of what to do. What is approved . If most people have been tested . It is not bad news. Is this just a little bit less effective than some of the other vaccines or is it significantly less effective . And if so, why . This is one that has a long overhaul, they were not fully reassured about the safety. Wanted to hear more about the safety data. There are more questions about this one because of the confusing data set. Taylor the devil is in the details, do we assume that distribution and equalizing the Playing Field . This vaccine does have advantages in distribution over the mrna vaccines. This can just be basically refrigerated and does not have the same freezer requirements as the messenger rna. This may be an easier one distribute. If they can come up some dose that is maybe just a little bit less effective than the mrna vaccine, that would definitely be an advantage. My understanding is that the u. K. Will get a lot of the first doses of this vaccine because it was developed in the u. K. I dont know what the roll up rollout is going to be after that. There is definitely a deal with warp speed as well. It remains uncertain right now which vaccines will go to which countries. Taylor not only with countries, but you think in the cities and rural areas. The idea of pfizer and moderna, these freezing cold temperatures. Temperatures that they need to be stored in. Can we get them to Rural Counties in the u. S. . Pfizer says they are working on a system, they have these containers that can be used, it will be shipped to places that have freezers. From there, i guess it can be put in the dry ice packages they design. They said, yes, they can do it. But it is more difficult and complicated. The next thing to happen will be j and j probably early next year. That technology is more similar to the vaccine rather than the mrna vaccine. Novavax using more traditional technology. All there could be a lot of vaccines out there. There could be confusion. Which one to get, or to go to get it. It could get very confusing if there are four, five vaccines at work. We are just parsing out the details of which one looks best for which people. Taylor like you said, just the Technology Behind this, the speed at which we have gotten these vaccines years before people thought it was possible. That was robert, thank you for joining. Coming up, facebook, your member you remember that 22 billion whatsapp acquisition. We look at how they may be having a more lucrative quarter. This is bloomberg. Taylor messaging might just prove lucrative for facebook. They acquired the popular messaging app whatsapp in 2014 for 22 billion but since then, the app has not generated the kind of returns they were hoping. Recent developments to show signs of the Company Might have plans to monetize the app even further. Joining us, the executive director at m km partners. A buy rating on facebook. Great to have you. Talk to us about what you think about the whatsapp evaluation as it relates to the broader world of facebook. Thank you for having me. It has been six years since facebook acquired the second largest platform on social media, that is whatsapp. Whatsapp is the second largest platform in terms of number of users. There are more than 2 billion monthly active users on whatsapp. Has not yet made significant inroads in making money off of whatsapp possible significantly large user base. I think we put out a note earlier this week saying that facebook is on the cusp of monetizing users in india and brazil, showcasing how they can make money off of not just advertising. We are going to see actuating revenues, actuating monetization. Taylor india and brazil, why have they been able to show progress there is that . Progress there . Does that translate into progress in the u. S. . Rohit whatsapp could be that one super app that is the gateway to the mobile ecosystem in those two countries. In the u. S. , we still do not have a super app. We use amazon for commerce, google for search, and youtube for something, so on and so forth. Outside of the u. S. , countries such as china and india, there is this notion that there is one main app. In china, maybe two or three apps that most people use to find other services and products. In india and brazil, whatsapp is trying to be that super app. A position that unlocks many more ways for the company to make money. In india, a license for all the users on the system that is a significant development. At the present, they have a license but there have been some false start. We have been monitoring that development. That said, beyond advertising, the market is huge. Hink Whatsapp Taylor whatsapp is very monetize a book. Taylor how stiff is that competition . Wepay, companies that have already created that super app, are they already dominant . How does whatsapp make inroads . Rohit in india and brazil, we have been paying attention to a couple of things. Google pay is used in india. It is probably a number three player right now. Number one is a company that is owned by walmart. There is no Chinese Super app this largess whatsapp in terms of users. Having a base of whatsapp users could help whatsapp windy incumbent win incumbence in india. Again, you are talking about thinking over the next five years, this is a company seen for many things. Taylor Rohit Kulkarni of mkm partners, great to have you. Coming up, we are taking a look at one cloud company. Why they are forgoing the traditional ipo. This is bloomberg. You will see a flood of ipos between thanksgiving and christmas. If those are received well, that bodes well for 2021. Taylor going public via spac or merger. The company is one of the largest microsoft 365 Development Teams outside microsoft itself. Why a spac versus a traditional ipo . On spac side, two main reasons. We looked at a traditional ipo as well as a spac. We are the largest developer for microsoft 365. We actually looked at both rounds. When we met jeff epstein, exoracle ceo, we felt that their Capital Knowledge would help us with the next stage of evolution. Second, in the spac world, everything is much quicker, so that would allow us to continue growing our business, a market with 250 million active users, growing to 500. We have 7 million and there is much market to go get. Taylor on that note about the business, do you ever worry about customer concentration and not being diversified enough . We have been a microsoft partner and independent Software Vendor for the last years. Years. It iseen the largest Enterprise Cloud today. We do follow our customers. By definition, many of our enterprise customers are multicloud. They could have Microsoft Office 365 for Office Collaboration but they may also have aws for compute, salesforce for crm. We already support some of our customers around cloud backup, around salesforce, around dropbox, and also supporting aws and google, around compliance. Taylor pushing into some of the financials, you generated 148 million in total revenue for the year. That is 26 growth yearoveryear. Can we expect those numbers in the next five years . It is rare to find a 90yearold software company. Old software company. We did the Cloud Transformation in 2011. Now, out of the conversion, we have highgrowth, predictable growth. This is our second Straight Year of nearly 30 arr growth. Revenue wise, we are looking at 30 yearoveryear as well. We are a highgrowth company that is also cash positive and margin positive. We are well north of that rule of 40 as a key metric. A great part of the subscription is thes model predictability of our business. Going into the year, over 70 of revenue is already spoken for. Major market share in this market with continued highgrowth. Taylor you are unique in that you have some real insight into customer behavior, i. T. Tech spend at this moment. How is tech spend . There is massive acceleration towards cloud. The microsoft ceo famously said the Digital Transformation journey is now compressed in a matter of weeks. We see this as well. Surveys of ceos of major fortune 500 companies also tells us that even after the pandemic with vaccines on the way here, the movement to cloud, a massive migration of data. Cloud is there. Now, customers are looking at leveraging data to innovate and collaborate faster. Taylor thank you as always for joining. Coming up, will consumers spend or save this Holiday Season as the pandemic battered economy continues to affect budgets . We will hear firsthand from the paypal Ceo Dan Schulman. This is bloomberg. Taylor welcome back to bloomberg technology. Im ylor riggs in new york, in for emily chang. As we head into the Holiday Season, resurgence of covid19 cases around the world impacts consumer spending. The paypal ceo sat down with emilchg to dcuss how a pandemic driven shift to Digital Payments and ecommerce has transformed consumer behavior, and whether itll affect the end of the year. Dan i dont think it is an exaggeration to say the pandemic accelerated the shift to digital by three to five years and three to six months. It is not even hyperbole, it is just the math of what we are seeing. You are seeing a huge shift from physical to digital and it is not even not just that shift from physical to digital but even instore has gotten more digital. You are seeing blurring between online and offline. Obviously, more and more people are shopping online but not even when they are going into the store, they dont want to touch cash anymore. They want to use cards or qr codes. The other thing you are seeing is that 40 to 70 of consumers dont want to touch cash anymore so youre really seeing a decline in the usage of cash which is why you are seeing a version and Digital Payments. Emily could this lead to the disappearance of cash, would you say . Dan i think a lot of people predicted the demise of cash and have been wrong over the years but there is no question that the use of cash and the prevalence of cash in transactions is dropping somewhat precipitously and whatever that trend rate was, it is now much more accelerated. Emily what are you expecting to see then as we head into the Holiday Season . Dan yeah, well, i think there are a couple of Different Things we are going to see. First of all, youve got over 50 of the population that is concerned further health about going into physical stores. By the way, that was a survey we did pretty all the explosion of the pandemic. It is probably a much higher number. People are going to move their spending online. If you look at 18 to 55yearolds, about 75 to 80 of them, a huge proportion, say they are going to do substantially all or at least half of their shopping online. You are going to see a dramatic increase from people shopping instore to shopping online. You are also going to see more of a spread of the holiday spending. Before, it was very peaked from black friday to cyber monday. That is going to be elongated because the Logistics Distribution are such that retailers are trying to spread that as opposed to have it peak. The final thing we are seeing now, which i think is really encouraging, is twothirds of americans want to shop at Small Businesses. And, that is really encouraging because Small Businesses have really suffered during the pandemic. I think a really interesting fact that i love seeing is that as Small Businesses have moved digital, the sales they are seeing have gone dramatically outside of their local market. So, when somebody puts in paypal for a small business, 75 of their sales are outside of their home state. That is a pretty remarkable occurrence. So, Small Businesses are dramatically increasing their market. Emily so, what is all this telling you about the health of the American Consumer . Obviously, we have been in a recession. A lot of people have lost their jobs. Theres also this increase in activity online. Dan i think we are clearly seeing more americans than ever before worried about the state of their financials. The pandemic, in my view, just exposed more evidently the trends that you had almost two thirds of americans struggling to make ends meet at the end of the month pre the pandemic. We are living in a time where people are really struggling to make ends meet and this pandemic has only heightened that and brought more attention to it. I do think there are ways that the government has weighed in to try to help. I think you need to do more of that going forward. Businesses like paypal have tried to help as well. We should not underestimate the stress of the American Consumer. Emily the pandemic has sprung this conversation of working at home into the spotlight. You are at home, im at home. How is this changing how you think about your Office Footprint knowing if a vaccine becomes available, we are still looking at at least the middle of next year at the earliest . Dan i think that is right. From our perspective, we are probably looking at the end of the summer into the fall before the vaccine can really take enough people take up the vaccine, which we are hopeful about. I dont think we are ever going back to what was. I think we will go into a new normal. New normal, based on what we are seeing and as with think about the future of work, is probably going to be some hybrid of people continuing to work from home and coming into the office. Maybe working from home two to three days a week, and in the office two to three days a week. Some people will forever be at home, and others will be more in the office. But, the vast majority will be some kind of 32 hybrid, i think. Taylor that was the first part of our conversation with dan schulman. Shulman discusses paypals embrace of cryptocurrencies and what he calls the demise of cash. That is next. This is bloomberg. Taylor bitcoin has been on a tear lately, crossing 18,000 last week and still keeping up the momentum on monday. This after paypal said in october it will now allow users to buy, sell and hold cryptocurrency. Emily chang asked paypal Ceo Dan Schulman whether the digital coin is fina