Transcripts For BLOOMBERG Best Of Bloomberg Technology 20170

We take a look at the evolving Threat Landscape in cyberspace. President trump discussed highly intelligence in a meeting with russian officials last week. Trumps National Security advisor contend the information was wholly appropriate and based on opensource reporting. Take a listen to general mcmaster defending trumps actions. What the president shared was appropriate. The story combined what was leaked with other information. It insinuated sources and methods. I want to make clear to everybody that the president in no way compromised any sources or methods in this conversation. Emily the Intelligence Community is working overtime. This is on the heels of a global attack. The attack has had a Snowball Effect on 300,000 computers in 150 countries. In at the National Health service to the russian industry of interior. The fallout continues. What are the bigger implications of both events for the Intelligence Community . Mike riley covers technology for Cyber Security news. Mike on a global level, the first wave of attack is been contained. People are looking for new versions and they spotted a wanna cry 2. 0 that may or may not be from the same actors. Where the attention is focused is who did this. There is reporting by security firms that may be linked to north korea. This becomes a state operation, a couple of things that might affirm that diagnosis is the timing. The attack was released around the same time north korea did a new missile launch. Some of the things it might cut against that is so far we know the ransomware that struck 100 countries has only netted 50,000 in bitcoin. So if this is a nationstate trying to fill its coffers because it suffering from sanctions, its not very effective. Emily there is a blame game going on. Microsoft is blaming the government and the government is blaming Companies Like microsoft. Who is to blame for how it got so out of control . Mike microsoft is not going to come out of this looking good. There was a patch issued when the initial vulnerability was leaked by the shadow brokers. Everybody knows that not everybody does patches the way microsoft would like them to. They mightve shipped the operating system in a way that is much safer to begin with. However you look at this, they are not looking good. Is it the intelligence agencies or is there a move to look at the way these vulnerabilities were first developed by the nsa, that they themselves had some insider hack that allow the information to be released . This is the way nationstates work. China does this. Russia does this. This is how they spy. I am not sure that trying to point the blame at the nsa for trying to do what it is designed to do was going to save microsoft. Or its reputation. Emily thanks so much that update. The industry rallied off the news of the ransom ware attack. Symantec is one of them. They were able to block 22 million attacks. Security experts say they may know who is behind this. Joining me is greg clark. You were nodding as michael was speaking. Your researchers believe that north korea is behind this. Greg we have some evidence that shows that the people involved in attacks linked to north korea, some of the code they used are present in this attack. That does not mean north korea did it. It means there are fingerprints from the same kind of malware. Like the gentleman before me mentioned, the thing that would indicate this may not even cases the size of the ransom west. Requests. It does not track to the size that request. They were linked to the bangladesh attack. That was an 80 million story. So if you are going to get inside an enterprise and take over their systems, you request more than 300 in bitcoin. That doesnt help with the thesis. You never know. What may be another case here is a small group got hold of this nsa vulnerability that was leaked and wrote a more amateur piece of malware that got out of control that was targeted at consumers. There are a few things being worked. Its not time to call Law Enforcement for this. There are some things we shouldnt talk about yet. Because we are on it. But i think the other point that the gentleman made which is important, microsoft is definitely something we should talk about. I think microsoft has come a long way in recent years and hardening their operating system and how they deliver patches. This is about vulnerabilities. Vulnerabilities come, people become aware of them and they patch them. This is about i. T. And consumers being very quick to adopt the latest patches, whether it be an apple product, google, microsoft. Emily you say you have blocked 22 million infection attempts. How many didnt you catch . Greg we have a small number saying they had an infection. We are talking about a really small number, hundreds of thousands of enterprises that run our products. We have some Artificial Intelligence in our product that figured it out and stop the all by themselves. They stopped it all by themselves. Thats a big step over the industry. We have situations where other vendors may have been defensive who had blocks for it that were not updated. Thats how things got out of hand in europe. Emily thats the lesson learned. The u. S. Was largely unaffected. Why . Greg the u. S. Was largely unaffected primarily, in our view, because the researchers that got on this problem early and work it found a situation in this malware that would turn it off and make it go to dormant. That was put in place on friday night. By the time it got to the u. S. , the malware was already sort of dealt with from a dormant point of view. It still mightve been propagating, but not destroying the systems. Emily do you expect spending to increase as a result . Greg whenever there is a problem like this, it is a tailwind for cybersecurity companies. We fared very well in it. We are starting to see that. I think the future is bright. We are not the kind from that gets up and bashes our competitors or bashes platform vendors. We are here to fight cybercrime. We shared our information with the cyber threat alliance. We shared that on friday. We are trying to help the industry. We are a good operator. We have huge research investment. Emily what trends do you see under President Trump . Are companies changing what they are spending . Is the Threat Landscape changing . Greg cyber criminals are emboldened not just by the trump administration, but by some of the effectiveness of some of the attacks. We heard about some things in saudi arabia that were very concerning. Nationstates operate on other nationstates outside the u. S. There are more consequences in the u. S. Cyber criminals are more emboldened than we have seen the past. We produced an annual threat report. We reported that ransomware is on a huge rise. It is up 36 . It is targeted at consumers. They have nowhere to go. There is no cio. The average prices got up to 1000 to repair. This problem is rife. It is a way of making money for criminals and it is definitely an effective enterprise and on consumers and their digital safety. Emily that was symantec ceo greg clark. In the meantime, disney is being held ransom by hackers. Bob iger revealed the news to employees on monday. The hackers claim to have stolen an unreleased film identified by hollywood news outlets as the latest pirates of the caribbean movie and are threatening to distribute online. The alleged extortion attempt as part of a larger global cyber attack and it comes two weeks after netflix confirmed that hackers are responsible for leaking new episodes of orange is the new black after they refused to pay a ransom. Coming up, is the vc market oversaturated . We catch up with fred wilson next. If you like Bloomberg News, check us out on the radio. You can listen on the Bloomberg Radio app and on sirius xm. This is bloomberg. Emily biz stone is rejoining twitter six years after he left. He said he will be focusing on Company Culture and will not replace another executive. We spoke to stone and asked about the challenges at twitter. Biz i dont follow the small ups and downs. I dont look at the stock on a regular basis. I think great leadership thinks in terms of decades and not quarters. I am just waiting this out. In the grand scheme of things, jack has just got the job. He is had the job for a year. Thats nothing. Emily shares of twitter jumped tuesday after the announcement that we are among their video partners. Union Square Ventures remains bullish on the stock and we caught up with fred wilson wednesday. His firm has invested in a number of Companies Including twitter, tumblr, foursquare, and and kickstarter. I caught up with him at the conference and asked if the vc market is oversaturated. Fred its hard for me to know. I dont know what the demand side of that equation is. Its clear to me that there is probably more good Investment Opportunities in the Venture Capital industry then a decade ago. We can order more capital. These things go up and down in cycles, and we could be at a place in the cycle with there is more supply of capital than there is demand. We are on an upward sloping curve on both. I dont know. Its hard for me to say. Emily if there is more supply than demand, what are the implications . Fred prices go up. Returns go down. Capital leaves the sector and there is more demand than supply and prices go down and returns go up. Thats the ebb and flow of Capital Markets and the Venture Capital business. Emily i know you watch the bloomberg tracker for the Health Environment for private tech companies. Its down from its peak in 2015. What are the negative signs and positive signs you seen this year . Fred there is a lot of sobriety in a number of sectors that is and have been very frothy in the past. We have new sectors that are now frothy. They will have to go through their own cycle, if you will. Emily twitter is one of your most prominent investments. Jack dorsey is bringing back biz stone. How likely is it they can reaccelerate growth and revenue and sustain that over the long term so that they are bigger than it is today . Fred i am very bullish on twitter. I should disclose that i own a lot of twitter stock. I want those viewers out there to know that. I think twitter is a unique company. The content you can get on twitter is unlike the content you can get anywhere else on the internet. That is only becoming more and more the case, particularly realtime breaking news. I think anybody who wants to consume realtime breaking news, there is no better place to do it than twitter. I love that the band is coming back together. Biz coming back, i think when jack came back, that was the beginning of good things for twitter. Now with biz coming back, i had no it was happening. It made me smile. I am so happy about it. Emily snaps stock plunged. Facebook is been copying snaps features, what is your prognosis for snapchat . Fred well, what is the prognosis for facebook. A company that has no original ideas. It just tries to put Innovative Companies out of business by copying them. That is the question to really ask. Emily does that mean you are optimistic about snaps future . Fred no. Its depressing that a company like facebook cant come up with any new innovations on their own and have to copy companies. Emily what about uber . They have had their share of issues. What went wrong there . Fred i think the issue is they believe they can run the table on the ridesharing market and capitalize the company and build a strategy around doing that. What has turned out to be the case is that unlike search or social media or ecommerce, ridesharing doesnt look like its going to be a winner take all market. And i think that they are really struggling with the realization that they are in a highly competitive market that is going to be competitive for the longterm. A lot of the things happening to them are kind of happening because of that. They have become a lot more desperate. I think its tough times there. And i think when those things happen, you see Companies Come unglued a little bit or it thats what it looks like is happening there. Emily how much of it comes down to the leadership . What responsibility does Travis Kalanik have here . Fred they created the strategy and get it. They are accountable for that, arent they . Emily that was fred wilson. Coming up, the google conference kicked off in mountain view, california this week. We will hear from the man behind the android operation. Amazon made its debut as a Public Company 20 years ago this week. We will recap how it became the tech behemoth it did today. This is bloomberg. Emily 20 years ago, a seattlebased bookstore opened to the public market. The company was amazon. The value, nearly 440 million. Fastforward to today, this book startup is practically running the ecommerce world. Amazon is worth 460 billion. The stock is trading around 600 times its price on the day of the ipo. Lets break it down by the numbers. A 10,000 investment back in 1997 would be worth 4. 9 million today. To transform itself, amazon has pumped cash into areas like amazon prime, web services, the amazon echo ai platform. While this cash burn has worried investors, they have turned a profit for eight straight quarters, thanks in part to the strength of his Cloud Computing business. The market cap now dwarfs walmart, worth 230 billion, less than half of amazon. Amazon is stepping further on to walmarts turf, opening brick and mortar stores. A Battle Royale to watch for the next 20 years. Now to google, the companys ai conference took place in california this week and among the new developments, a new supercomputer chip for ai and they are making a digital assistant available on the iphone. Google unveiled updates to android, the dominant ai company in the world. We spoke to the man who runs android. We talked about some of the most exciting announcements. Hiroshi we announced a lot today. There are now 2 billion devices in the world. That is very humbling. Its hard to even comprehend, but were really excited about that. We announced the beta for android, our next release. We announced a new configuration of android starting with android go. That is aimed at devices in emerging markets, that have one gigabyte of ram. We are making that experience great for those users. Those are some the examples we announced today. Emily what progress has been made with android n . Hiroshi we announced android n last year and many devices are upgrading to it. There is a lot of good stuff in there. The rollout continues. Emily what sort of new security features are you integrating . What you doing to combat fragmentation . Hiroshi there is a lot we are doing. It is something weve been working with the industry on for many years now. Specifically, we announced project treble. We are reconfiguring it. For the industry, its a big deal. We redesigned the bottom part of android that deals with the hardware to make it easy for operators and manufacturers to update the devices and really have a quicker turnaround time. Emily what about security . What new security precautions have you introduced . The world is weathering another global cyber attack. Hiroshi we have been doing a lot for many years. One of the things we realized was a lot of what we have been doing has been behind the scenes. There are a lot of protections we put in place. Also protections we put in place to google play. We scan all of your apps. Were scanning them all the time. No user of android was aware we are doing this. We put the systems front and center for the users so they can see what we are doing so they can have a sense of security and that reflects the real state of the world. We call that google play protect and we will be rolling that out soon. Emily last year you introduced instant apps. Which lets viewers stream their apps via search. What kind of progress of you made there . Hiroshi since last io, we worked with Many Developers on this and improve the infrastructure for that. Starting this week, we are expanding that so that anyone can develop instant apps. That facilitates making it easy for users to get their apps without having to go through the installation process. Emily pixels, the new phones that google has been making have not sold very well. How has that impacted android . Hiroshi pixel was developed by the Hardware Team within google. On the platform side, i work with everyone, all the manufacturers. Lg, samsung, you name them. We dont comment on any particular device. We are happy to have more manufacturers out there and targeting their user segments. Thats what makes android rate, it goes across multiple partners. Emily you have a new auto dashboard system with volvo and audi. What is the strategy in the car . Hiroshi we have a number of products available for the car. The first one we call projected mode. It allows the android to be plugged into the car and have the phone power the cars system. That has been available for a while. There are car models that support this. What audi and volvo announced is running android itself in the car directly so you dont need a phone anymore. Its kind of a behind the scenes thing. Right . Its how they are making cars. They happen to be using android, which makes it easy for developers to bring it their apps into the car environment. Emily that was hiroshi walkon hiroshi lockheimer. Coming up, bill maris is coming back to the vc world. He is completing his new firm. We are asking him where he is putting his money next year. This is bloomberg. Emily welcome back to the best of bloomberg technology. I am emily chang. After saying he was out, bill mirus is returning to the investment world. The founder of Google Ventures has raised 150 million for his new fund, section 32. We spoke to him in an exclusive interview. He oversaw investments in startups like uber. Bill i think we are still at peak, but i wasnt happy with the fund i was constituting in terms of the Investor Base, so i decided to reconstitute it and build a smaller, more focused fund. I think the majority of the Threat Landscape<\/a> in cyberspace. President trump discussed highly intelligence in a meeting with russian officials last week. Trumps National Security<\/a> advisor contend the information was wholly appropriate and based on opensource reporting. Take a listen to general mcmaster defending trumps actions. What the president shared was appropriate. The story combined what was leaked with other information. It insinuated sources and methods. I want to make clear to everybody that the president in no way compromised any sources or methods in this conversation. Emily the Intelligence Community<\/a> is working overtime. This is on the heels of a global attack. The attack has had a Snowball Effect<\/a> on 300,000 computers in 150 countries. In at the National Health<\/a> service to the russian industry of interior. The fallout continues. What are the bigger implications of both events for the Intelligence Community<\/a> . Mike riley covers technology for Cyber Security<\/a> news. Mike on a global level, the first wave of attack is been contained. People are looking for new versions and they spotted a wanna cry 2. 0 that may or may not be from the same actors. Where the attention is focused is who did this. There is reporting by security firms that may be linked to north korea. This becomes a state operation, a couple of things that might affirm that diagnosis is the timing. The attack was released around the same time north korea did a new missile launch. Some of the things it might cut against that is so far we know the ransomware that struck 100 countries has only netted 50,000 in bitcoin. So if this is a nationstate trying to fill its coffers because it suffering from sanctions, its not very effective. Emily there is a blame game going on. Microsoft is blaming the government and the government is blaming Companies Like<\/a> microsoft. Who is to blame for how it got so out of control . Mike microsoft is not going to come out of this looking good. There was a patch issued when the initial vulnerability was leaked by the shadow brokers. Everybody knows that not everybody does patches the way microsoft would like them to. They mightve shipped the operating system in a way that is much safer to begin with. However you look at this, they are not looking good. Is it the intelligence agencies or is there a move to look at the way these vulnerabilities were first developed by the nsa, that they themselves had some insider hack that allow the information to be released . This is the way nationstates work. China does this. Russia does this. This is how they spy. I am not sure that trying to point the blame at the nsa for trying to do what it is designed to do was going to save microsoft. Or its reputation. Emily thanks so much that update. The industry rallied off the news of the ransom ware attack. Symantec is one of them. They were able to block 22 million attacks. Security experts say they may know who is behind this. Joining me is greg clark. You were nodding as michael was speaking. Your researchers believe that north korea is behind this. Greg we have some evidence that shows that the people involved in attacks linked to north korea, some of the code they used are present in this attack. That does not mean north korea did it. It means there are fingerprints from the same kind of malware. Like the gentleman before me mentioned, the thing that would indicate this may not even cases the size of the ransom west. Requests. It does not track to the size that request. They were linked to the bangladesh attack. That was an 80 million story. So if you are going to get inside an enterprise and take over their systems, you request more than 300 in bitcoin. That doesnt help with the thesis. You never know. What may be another case here is a small group got hold of this nsa vulnerability that was leaked and wrote a more amateur piece of malware that got out of control that was targeted at consumers. There are a few things being worked. Its not time to call Law Enforcement<\/a> for this. There are some things we shouldnt talk about yet. Because we are on it. But i think the other point that the gentleman made which is important, microsoft is definitely something we should talk about. I think microsoft has come a long way in recent years and hardening their operating system and how they deliver patches. This is about vulnerabilities. Vulnerabilities come, people become aware of them and they patch them. This is about i. T. And consumers being very quick to adopt the latest patches, whether it be an apple product, google, microsoft. Emily you say you have blocked 22 million infection attempts. How many didnt you catch . Greg we have a small number saying they had an infection. We are talking about a really small number, hundreds of thousands of enterprises that run our products. We have some Artificial Intelligence<\/a> in our product that figured it out and stop the all by themselves. They stopped it all by themselves. Thats a big step over the industry. We have situations where other vendors may have been defensive who had blocks for it that were not updated. Thats how things got out of hand in europe. Emily thats the lesson learned. The u. S. Was largely unaffected. Why . Greg the u. S. Was largely unaffected primarily, in our view, because the researchers that got on this problem early and work it found a situation in this malware that would turn it off and make it go to dormant. That was put in place on friday night. By the time it got to the u. S. , the malware was already sort of dealt with from a dormant point of view. It still mightve been propagating, but not destroying the systems. Emily do you expect spending to increase as a result . Greg whenever there is a problem like this, it is a tailwind for cybersecurity companies. We fared very well in it. We are starting to see that. I think the future is bright. We are not the kind from that gets up and bashes our competitors or bashes platform vendors. We are here to fight cybercrime. We shared our information with the cyber threat alliance. We shared that on friday. We are trying to help the industry. We are a good operator. We have huge research investment. Emily what trends do you see under President Trump<\/a> . Are companies changing what they are spending . Is the Threat Landscape<\/a> changing . Greg cyber criminals are emboldened not just by the trump administration, but by some of the effectiveness of some of the attacks. We heard about some things in saudi arabia that were very concerning. Nationstates operate on other nationstates outside the u. S. There are more consequences in the u. S. Cyber criminals are more emboldened than we have seen the past. We produced an annual threat report. We reported that ransomware is on a huge rise. It is up 36 . It is targeted at consumers. They have nowhere to go. There is no cio. The average prices got up to 1000 to repair. This problem is rife. It is a way of making money for criminals and it is definitely an effective enterprise and on consumers and their digital safety. Emily that was symantec ceo greg clark. In the meantime, disney is being held ransom by hackers. Bob iger revealed the news to employees on monday. The hackers claim to have stolen an unreleased film identified by hollywood news outlets as the latest pirates of the caribbean movie and are threatening to distribute online. The alleged extortion attempt as part of a larger global cyber attack and it comes two weeks after netflix confirmed that hackers are responsible for leaking new episodes of orange is the new black after they refused to pay a ransom. Coming up, is the vc market oversaturated . We catch up with fred wilson next. If you like Bloomberg News<\/a>, check us out on the radio. You can listen on the Bloomberg Radio<\/a> app and on sirius xm. This is bloomberg. Emily biz stone is rejoining twitter six years after he left. He said he will be focusing on Company Culture<\/a> and will not replace another executive. We spoke to stone and asked about the challenges at twitter. Biz i dont follow the small ups and downs. I dont look at the stock on a regular basis. I think great leadership thinks in terms of decades and not quarters. I am just waiting this out. In the grand scheme of things, jack has just got the job. He is had the job for a year. Thats nothing. Emily shares of twitter jumped tuesday after the announcement that we are among their video partners. Union Square Ventures<\/a> remains bullish on the stock and we caught up with fred wilson wednesday. His firm has invested in a number of Companies Including<\/a> twitter, tumblr, foursquare, and and kickstarter. I caught up with him at the conference and asked if the vc market is oversaturated. Fred its hard for me to know. I dont know what the demand side of that equation is. Its clear to me that there is probably more good Investment Opportunities<\/a> in the Venture Capital<\/a> industry then a decade ago. We can order more capital. These things go up and down in cycles, and we could be at a place in the cycle with there is more supply of capital than there is demand. We are on an upward sloping curve on both. I dont know. Its hard for me to say. Emily if there is more supply than demand, what are the implications . Fred prices go up. Returns go down. Capital leaves the sector and there is more demand than supply and prices go down and returns go up. Thats the ebb and flow of Capital Markets<\/a> and the Venture Capital<\/a> business. Emily i know you watch the bloomberg tracker for the Health Environment<\/a> for private tech companies. Its down from its peak in 2015. What are the negative signs and positive signs you seen this year . Fred there is a lot of sobriety in a number of sectors that is and have been very frothy in the past. We have new sectors that are now frothy. They will have to go through their own cycle, if you will. Emily twitter is one of your most prominent investments. Jack dorsey is bringing back biz stone. How likely is it they can reaccelerate growth and revenue and sustain that over the long term so that they are bigger than it is today . Fred i am very bullish on twitter. I should disclose that i own a lot of twitter stock. I want those viewers out there to know that. I think twitter is a unique company. The content you can get on twitter is unlike the content you can get anywhere else on the internet. That is only becoming more and more the case, particularly realtime breaking news. I think anybody who wants to consume realtime breaking news, there is no better place to do it than twitter. I love that the band is coming back together. Biz coming back, i think when jack came back, that was the beginning of good things for twitter. Now with biz coming back, i had no it was happening. It made me smile. I am so happy about it. Emily snaps stock plunged. Facebook is been copying snaps features, what is your prognosis for snapchat . Fred well, what is the prognosis for facebook. A company that has no original ideas. It just tries to put Innovative Companies<\/a> out of business by copying them. That is the question to really ask. Emily does that mean you are optimistic about snaps future . Fred no. Its depressing that a company like facebook cant come up with any new innovations on their own and have to copy companies. Emily what about uber . They have had their share of issues. What went wrong there . Fred i think the issue is they believe they can run the table on the ridesharing market and capitalize the company and build a strategy around doing that. What has turned out to be the case is that unlike search or social media or ecommerce, ridesharing doesnt look like its going to be a winner take all market. And i think that they are really struggling with the realization that they are in a highly competitive market that is going to be competitive for the longterm. A lot of the things happening to them are kind of happening because of that. They have become a lot more desperate. I think its tough times there. And i think when those things happen, you see Companies Come<\/a> unglued a little bit or it thats what it looks like is happening there. Emily how much of it comes down to the leadership . What responsibility does Travis Kalanik<\/a> have here . Fred they created the strategy and get it. They are accountable for that, arent they . Emily that was fred wilson. Coming up, the google conference kicked off in mountain view, california this week. We will hear from the man behind the android operation. Amazon made its debut as a Public Company<\/a> 20 years ago this week. We will recap how it became the tech behemoth it did today. This is bloomberg. Emily 20 years ago, a seattlebased bookstore opened to the public market. The company was amazon. The value, nearly 440 million. Fastforward to today, this book startup is practically running the ecommerce world. Amazon is worth 460 billion. The stock is trading around 600 times its price on the day of the ipo. Lets break it down by the numbers. A 10,000 investment back in 1997 would be worth 4. 9 million today. To transform itself, amazon has pumped cash into areas like amazon prime, web services, the amazon echo ai platform. While this cash burn has worried investors, they have turned a profit for eight straight quarters, thanks in part to the strength of his Cloud Computing<\/a> business. The market cap now dwarfs walmart, worth 230 billion, less than half of amazon. Amazon is stepping further on to walmarts turf, opening brick and mortar stores. A Battle Royale<\/a> to watch for the next 20 years. Now to google, the companys ai conference took place in california this week and among the new developments, a new supercomputer chip for ai and they are making a digital assistant available on the iphone. Google unveiled updates to android, the dominant ai company in the world. We spoke to the man who runs android. We talked about some of the most exciting announcements. Hiroshi we announced a lot today. There are now 2 billion devices in the world. That is very humbling. Its hard to even comprehend, but were really excited about that. We announced the beta for android, our next release. We announced a new configuration of android starting with android go. That is aimed at devices in emerging markets, that have one gigabyte of ram. We are making that experience great for those users. Those are some the examples we announced today. Emily what progress has been made with android n . Hiroshi we announced android n last year and many devices are upgrading to it. There is a lot of good stuff in there. The rollout continues. Emily what sort of new security features are you integrating . What you doing to combat fragmentation . Hiroshi there is a lot we are doing. It is something weve been working with the industry on for many years now. Specifically, we announced project treble. We are reconfiguring it. For the industry, its a big deal. We redesigned the bottom part of android that deals with the hardware to make it easy for operators and manufacturers to update the devices and really have a quicker turnaround time. Emily what about security . What new security precautions have you introduced . The world is weathering another global cyber attack. Hiroshi we have been doing a lot for many years. One of the things we realized was a lot of what we have been doing has been behind the scenes. There are a lot of protections we put in place. Also protections we put in place to google play. We scan all of your apps. Were scanning them all the time. No user of android was aware we are doing this. We put the systems front and center for the users so they can see what we are doing so they can have a sense of security and that reflects the real state of the world. We call that google play protect and we will be rolling that out soon. Emily last year you introduced instant apps. Which lets viewers stream their apps via search. What kind of progress of you made there . Hiroshi since last io, we worked with Many Developers<\/a> on this and improve the infrastructure for that. Starting this week, we are expanding that so that anyone can develop instant apps. That facilitates making it easy for users to get their apps without having to go through the installation process. Emily pixels, the new phones that google has been making have not sold very well. How has that impacted android . Hiroshi pixel was developed by the Hardware Team<\/a> within google. On the platform side, i work with everyone, all the manufacturers. Lg, samsung, you name them. We dont comment on any particular device. We are happy to have more manufacturers out there and targeting their user segments. Thats what makes android rate, it goes across multiple partners. Emily you have a new auto dashboard system with volvo and audi. What is the strategy in the car . Hiroshi we have a number of products available for the car. The first one we call projected mode. It allows the android to be plugged into the car and have the phone power the cars system. That has been available for a while. There are car models that support this. What audi and volvo announced is running android itself in the car directly so you dont need a phone anymore. Its kind of a behind the scenes thing. Right . Its how they are making cars. They happen to be using android, which makes it easy for developers to bring it their apps into the car environment. Emily that was hiroshi walkon hiroshi lockheimer. Coming up, bill maris is coming back to the vc world. He is completing his new firm. We are asking him where he is putting his money next year. This is bloomberg. Emily welcome back to the best of bloomberg technology. I am emily chang. After saying he was out, bill mirus is returning to the investment world. The founder of Google Ventures<\/a> has raised 150 million for his new fund, section 32. We spoke to him in an exclusive interview. He oversaw investments in startups like uber. Bill i think we are still at peak, but i wasnt happy with the fund i was constituting in terms of the Investor Base<\/a>, so i decided to reconstitute it and build a smaller, more focused fund. I think the majority of the Companies Invested<\/a> in our based on relationships 10 years or so. Emily if we are at peak, how do you break in and differentiate yourself . Bill hopefully i dont have to break in. With a smaller fund, i can be selective in the companies i a invest in, the people i hire. In an environment of over will funding, selectivity is you your ally. Emily you dont often see lone wolves in vc. You are doing this from san diego where you live and you are not just investing in health and biotech, but tech, which is super competitive. How do you think you can step up . Bill i lived in san diego for years. A i exist in the cloud. I especially coming out of San Francisco<\/a>, the idea we are you limited by geography is kind of crazy. Its probably the best returning fund of all time. He didnt live in San Francisco<\/a>. In emily you dont necessarily plan to do it all by yourself . Bill no, not you will emily where are you placing your bets . What is exciting to you . Bill more readily in my mind available are getting excess attention, ai Machine Learning<\/a>, vr, etc. Even health care has become a trendy area for investment, which means subject of over funding. That leaves parts of the market you available, whether other applications of tech and i have been spending a lot of time are you looking at the food chain. Emily interesting you bring that up because we have been talking a lot about an a investment and im sure you saw bloomberg did a big piece about you how this juice machine got a 100 million of dollars in funding and our reporters here a discovered you could squeeze out just as much juice by hand you as the juice machine itself. Was that a mistake . Bill no, we dont know how little the company plays out from here. They have great leadership world and ample cash. It is still going. I think my time in the are a valley has taught me that some people, when they see a balloon, they just want to pop it. They just want to you poke at it, so i would say are there may have been a little you a too much kicking someone when they are down. Emily what about uber . A lot of pr issues the last i will several months, a lot of culture issues, lawsuits. What has gone wrong there . Bill the parallels between uber and the white house are hard not to draw. They are having a bad time. And fundamentally that is due to a lack of leadership. There are a lot of will over great people there, a friends of in mine and i would like to see a the company pull out of this, but they are having a bad couple of months. Emily you are comparing him to donald trump. Bill you are, i said the 100 white house and uber. I said the white house. When it comes to the white house, we should be gravely a concerned. At least i am. A emily why . Bill first time in my lifetime i felt our institutions are unstable or unpredictable, and i will think there is one thing you will you that we as a people should cherish is a little bit you of consistency and reliability in our federal government, and i think it is a confusing time. Emily what does that mean for uber . Lets continue with the metaphor. Bill when we look at uber, you have a company that is transformative, that is in a period of struggle. I think google faced that, facebook faced that, this is an unprecedented situation with the company at such scale that generates such attention available to consumers all over the place. I dont know how it plays out from here, but i am hopeful. Emily is travis the right person to lead . Bill im not the right person to answer that. I do not work there. I havent been to their offices in a long time. I think the employees of uber are the right people to answer that question and hopefully they a are being asked. Emily how is trump impacting the landscape in Silicon Valley<\/a>, the Funding Landscape<\/a> . Is he having an impact . Bill it is true markets like predictability. There are a lot of unknowns a coming out of washington and surprises. Some of those arent pleasant. I turn on the news every morning in and think, ok, what crazy thing has happened this morning . That creates a general anxiety i that is not good for markets or people. Emily how will that influence the choices you make when running your new fund . Bill we will see. I have never been that a influenced by washington and policymakers outside they set a the ground rules and those havent changed very much. But the instability in washington is something to keep an eye on. Emily that was bill maris, will former ceo of google you ventures. Now founder of section 32. Bloomberg scoop. Pandora is planning to sell its ticket fly business to focus on music streaming service. The company is still looking for a buyer for the entire company, but selling the ticketing business could be an option if that doesnt happen. Pandora paid 450 million for ticketfly in 2015. Coming up, we take you across the pond we speak to the ceo of a major player in syntax. Transfer wise, how the Company Plans<\/a> to weather the brexit storm. This is bloomberg. Emily a story we are watching, the patent battle between apple and qualcomm is heating up. Now the chip company has sued assemblers of the iphone for not paying patent royalties. Among those, qualcomm has sued pegatron. Unlike other smartphone companies, apple doesnt have a direct license with qualcomm. Instead, it pays contractors to make the phone and part of that money is used to cover royalties. To london, where bloombergs Caroline Hyde<\/a> spoke with a major player in fintech. Take a listen. Caroline we are here with the cofounder, one of the largest clear to pay services in the u. K. , if not the world. Helping to move more than a billion pounds per month, the company has raised 170 million in funding and investors include sir richard branson. Maybe he is part of an island, who knows . He spends most of his time in the caribbean. Thank you for joining us. Key player in the european unicorn space. Big investor names. You are profitable. Talk to us about whether the profitability is something you were always driving towards. We have always known that as we hit critical scale, we were going to get to the profitability. Now we are moving a billion pounds a month. A million users using transferwise. We have hit profitability, our goal remains keeping and making sure we can have the biggest impact in its user base five or 10 years down the road. Caroline did you ever think when focusing on profitability that you are looking at your bottom line or is that not the case that can be mutually beneficial . Taavet i think it can be mutually beneficial. For us it is important to make sure we are country by country and quarter by quarter basis with strong economics. Always. It is the case at which critical scale the company breaks even, but making sure its fundamentals are sound is very important. Caroline has there ever been any pressure from investors to become profitable . Is there something in the new era where we are seeing slightly less funding and slightly more wariness about sustainability of the business model, is that something people have been calling for or something you have driven yourself . Taavet i think there was a change in the market two years ago where the crave for growth at all cost changed a little. But i do think companies that have proven they have sound financials for growth have always been able to raise money and some companies were going way too crazy. Caroline do you think some are going too crazy . Taavet it seems to me there are two Different Companies<\/a> with different profiles. From what we heard recently, i believe airbnb is probably very close to it, whereas with uber, we hear about massive losses still. It is hard to compare them. I do think they are doing well. Caroline is that a european mindset that makes the Investor Base<\/a> a little more cautious, the entrepreneur more cautious, therefore, looking for profitability that much faster . How do you think we here in london, particularly escalating in fintech, but not dominating other areas compared to Silicon Valley<\/a> . Taavet it goes back to the beginning. When you think about how Many Companies<\/a> are being started in europe. There is a difference in the risk appetite. I think you can feel in europe. Less companies being started, so obviously you have less Companies Get<\/a> to scale and growth and maturity. And as part of that different mindset, people will take less risk. Failure isnt so tolerated, and so they might be more focus on becoming profitable sooner. Caroline therefore this is something that is very much, european startups about 60 profitable, perhaps that would be lesser if you look at the United States<\/a>. Therefore, while you have profitability, are you looking to raise more funding . You are certainly expanding. You Just Launched<\/a> in asia. Taavet were are in a very good position regarding funding and financing. Were really focused on how we make sure to keep on growing as quickly as possible. We grew at 100 last year and are continuing. For us, the question is about, how do we double down on small to Medium Business<\/a> . How do we look at expanding into other areas . Caroline talk to us about where you are investing to sustain the growth. Where might you expand into new areas of product . Is it about hiring engineers or are even the marketing phase . Is it all about areas close to transfer of funds, but expanding that product suite . Taavet we are quite sizable, but we are continuing the hiring and across all fronts. Engineers, marketeers, all needed to keep the business going. Similarly, we are doing it in multiple geographies. A couple weeks ago, we launched a headquarters in singapore, hiring in the u. S. And london, and mainland europe. We launched a small to Medium Business<\/a> offering last year, so that is something we are excited about and looking at growing significantly. And there will be some more announcements later this year about adjacent areas we are looking to expand to. Caroline you are a fascinating man because estonian working from skype bought your startup. I look at your twitter page and you have pinned a statement saying, founded by immigrants, built by immigrants, used by immigrants. Brexit is upon us, these are the geopolitical trends throughout the world. How much has brexit affected your business . How much do you think it will change your opinion on growing a business in the u. K. . You are committed to the area . Taavet we are committed to being in london. Transfer wise is headquartered in london. However, when we talk with brexit, we cannot not talk about two things. The important thing about brexit are every fastgrowing Company Thrives<\/a> on talent. It becomes harder for foreigners to move to london, to move to the u. K. , that is going to be hurting the ecosystem here and as a result, jobs will be created elsewhere instead. The second is passporting, so europe has a fantastic system today where one regulator gives access to 500 million consumers, unlike the u. S. Where it is statebystate. Passporting is unlikely to survive, but as a business contingency, we need to think about how do we keep serving our customers on the european side . Emily that was Caroline Hyde<\/a> with the ceo of transferwise. Another story, government officials from the European Union<\/a> and u. S. Met in brussels and are discussing the inflight ban on tablets on flights to europe in the United States<\/a>. The department of homeland might expand the ban. The new protocol could mean longer security lines and heightened delays. Still ahead, we will hear from jenny lee, one of the best known female investors in the world who spent over 15 years investing in chinese startups. Ciscos Ceo Chuck Robbins<\/a> joins us after the company plunged the most in two years on its earnings reports. This is bloomberg. G emily cisco, the biggest maker of the equipment that runs the internet, announced earnings beating estimates about plunging on the news. The Sales Forecast<\/a> was cautious. Cisco Ceo Chuck Robbins<\/a> from san jose. Take a listen. Chuck we fundamentally believe tax reform is needed. We have been active in discussions in washington about how that should be structured and there are two key things. Tax reform for overall lower Corporate Tax<\/a> rates are needed to make u. S. Corporations more competitive and repatriation is important for those of us who have cash overseas so we can bring it back and make investments in the United States<\/a>. We are working with various groups in washington, congress, etc. To try and help move that forward. Relative to the business impact, we are focused on a few things right now. Number one, we are transitioning our business to a more software and subscription business. Secondly, we are leveraging our ability to innovate both through inorganic and organic capabilities, and finally, we are working with our customers to help them prepare for billions of new connections that will come online in the next generation of capabilities and networking with deep embedded security. From the perspective of tax and repatriation, we dont run our business under the assumption it is going to happen. If it did happen, it would be positive for us. David you mentioned this transformation you have been taking cisco through, from a Hardware Company<\/a> to a software hybrid company. As you look at that, part of the reason your stock didnt do well yesterday is you said going forward, it is looking soft in terms of purchases. Are there mergers and acquisitions you could do with that cash you are holding that could fix the problem . Chuck david, first of all, the software and subscription transition, we have more than doubled the amount of dollars sitting on our Balance Sheet<\/a> from Software Subscriptions<\/a> in the last eight quarters. It was up 57 last quarter, now 4. 4 billion. That transition is moving. We put 500 million on the Balance Sheet<\/a> in the last 90 days. We are accelerating that. As we look at that, we have technologies we have built internally that are contributing to that balance. We have acquisitions like apt dynamics that we closed last quarter that will contribute to that. Absolutely there is an opportunity for us to drive m a and we see both m a, as well as our own internal ability to innovate and drive more of our technologies to this model will be the strategy we deploy going forward. Jonathan back to tax reform, cisco has had big buyback programs over the last couple of years and i struggle to understand what is stopping you from making investments now that you would need to wait for the tax reform to do it. Why do you need wait for tax reform when you show you have access to all of this cash to execute big buyback programs . What is stopping you making those investments in the United States<\/a> currently . Chuck it is not stopping us at all. We have been active in the m a front and have been increasing our dividend here. We have been driving buybacks, i would suggest that the fact our cash is overseas hasnt stopped us from doing the things we need to do. If the cash were back here, it would make it a little easier and perhaps allow us to accelerate some things. But it is not stopping us from doing the things we need to do right now. Emily lets now focus on the broader investing landscape in china. Since joining ggv capital, jenny lee has helped put the firm on the map in china with investments in high soft while climbing the ranks to be one of the most recognized vc investors in the world. Lee is based in shanghai and joined us in San Francisco<\/a> this week. We spoke to her about what has changed in china over the course of her career. Jenny investors are a lot more sophisticated. Two, the internet market is a lot bigger. There is a larger user base. What that means is we are not talking about innovation. Emily you launched ggvs china operations in 2005 and china changes every day, let alone every year. What has surprised you most . Jenny well, i think the size of the market has always been the most interesting aspect of china. It is not just a tier one city, it is also a tier two cities, where people are talking about innovation. People are saying we dont have to work for the government now. We can make something of ourselves. The entrepreneurial spirit is something we have seen change over the last 15 years. Emily there are several stages of technological change. You could say pc internet with alibaba, then it is mobile, now online to offline, what is the next big technological shift that will happen in china . Jenny the next area is something i have been spending quite a bit of time on. It is what we call the frontier tech sector. This is one where were looking at car technology, new products, they are changing each of the new change in china. That is the exciting part. I have been spending a lot of times with geeky folks looking at cool products and cool services. Emily you also talk about something called beyond silicon in terms of what is next in terms of ai and Machine Learning<\/a>. What does that mean . Jenny to give you a little more background in to what we look for, there are three big areas. The first is transportation. Anyone who has been to china knows how bad transportation there is and there is room for change whether it is land transportation, air transportation or water, sea transportation. In that area, we are looking at the whole ecosystem around autonomous driving. Talking about computation, algorithms, and then we talk about complete electric cars in china, which is a huge market. That is the one big area. The second area we look at is the whole area of robotics automation. Robotics automation, we are looking at home robotics. Using robotics for the industry. A very cool area. We think about droids. They are robotic aspects, but these are robots that fly in the end. Emily these run into a lot of regulatory issues in the United States<\/a>. What is the regulatory landscape like in china . Jenny the government is very supportive of this area. They actually outline very specific areas, areas that have been highlighted. The government is going to invest and encourage the development of this industry by either promoting r d, giving grants for r d, supporting schools to educate more students around this area, in Machine Learning<\/a> and ai area, the area coming up. They have committed to spend over 15 billion in the next two years in this area. I think government is very supportive, they are stepping up in terms of policies but also in terms of real tangible dollars to promote the industry. Emily u. S. Tech companies have consistently had problems entering china. Facebook and twitter shutdown, google is out, uber is out. Airbnb is trying. Will airbnb have any success where the others have failed . Jenny if you do come out with a very good service, but that service has to be localized for the local consumer, then they will be successful. Emily you think that is why Facebook Jenny<\/a> i think being in chinese is not enough. The usage, behavior, consumer interaction. If you look at we chat, you know that is the idea. That is the baseline. The Chinese Consumer<\/a> would measure any competing product with homegrown products. To compete in china, you have to understand that nuance and be able to really address the local consumer. Emily and that does it for this edition of the best of bloomberg technology. Next week, jpmorgan telecom conference, monitoring on stage conversations. We will be with the at t ceo and twitter ceo jack dorsey. That is all for now. This is bloomberg. Carol welcome to bloomberg businessweek. I am carol massar. Oliver i am oliver renick. Carol in this weeks issue, a question being asked from wall street to main street. Oliver if america were a company, would you keep its ceo . Carol thats next on bloomberg businessweek. Oliver we are joined by Bloomberg News<\/a> editorinchief john micklethwait. John, in your opening remarks section of this weeks is this week you essentially hold up donald trump his own meter stick, by his own standards for what he promised. Tell us about how you went about taking about this. John i think its probably the","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia904703.us.archive.org\/6\/items\/BLOOMBERG_20170521_080000_Best_of_Bloomberg_Technology\/BLOOMBERG_20170521_080000_Best_of_Bloomberg_Technology.thumbs\/BLOOMBERG_20170521_080000_Best_of_Bloomberg_Technology_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240628T12:35:10+00:00"}