To washington earlier this year. Backtoback rallies in the bay area this weekend are expected to draw demonstrators and counterprotesters. Thousands of officers will be on hand to police the event in the wake of the deadly White Nationalist march in charlottesville. Global news 24 hours a day powered by more than 2700 journalists in more than 120 countries. Bloomberg technology is next. Emily i am emily chang and this is bloomberg technology. Samsungs heir apparent goes from crown prince to cautionary tale after a judge hands down one of the harshest sentences for a Top Executive in south korea. What is next for samsung and who succeeds jay y. Lee . Our roundtable discusses. It is going down to the wire with alibaba a few billion dollars away from snatching the crown from amazon. We will break down the Second Quarter rally that closed the gap. They are not the only billionaires betting on outer space. We will look at how others are investing in the final frontier. He has long been considered the crown prince of the samsung business empire. Now, jay y. Lee faces five years in prison. A south korean court imposed the sentence after finding him guilty of bribery. Prosecutors say he spent 6. 4 million bribing the government. The conviction raises doubts about whether he will return to samsung, the company his grandfather founded. Who takes the family mantle from here and will it set an example for other cases to come . Joining us, our guest host for the hour, bob odonnell. Also with me in the studio, ian king who just came back from south korea. You went into the courtroom. Jay y. Lee was there. How surprising was this verdict . I think anybody who spent time in court like i did, including a lot of my colleagues, were surprised by this result because the prosecutors were doing an awful job. There is no other way to describe it. It was terrible. There was no smoking gun. A lot of the witnesses they brought up were destroyed by lawyers. It did not look like the case was being proven at all. That is the way it went almost until the end, and then we saw the result. Emily this verdict is even more of a statement from the south korean government, right . That is the explanation given by the pundits, that the south korean government had enough of this kind of cozy relationship that is arguably illegal. This was a statement they sent saying enough is enough. Emily bob, what does this say about the ongoing future power of the south korean conglomerate that have wielded an incredible amount of power . Many executives before got off scotfree for the same thing. Bob they play such a critical part in the south korean economy that it will not change overnight. These are institutions built up over decades. Tearing them apart if that does happen would also take decades. Nevertheless, clearly this was a statement by the south korean government to say there is too much of this going on. The thing that is confusing for a lot of us in the u. S. Is the structure is so complicated and so complex that even when you are there and realize there are Companies Named samsung something or other, they might as well be competitors. It is a confusing thing. You have this differentiation. Somewhere at the top, there is this group of people controlling it. That is where jay y. Lee was. That is why i do not think we will see an impact on the individual businesses and why shakeups would take a long time. Emily jay y. Lee has said he will appeal. Will he go to jail . Will the sentence be suspended . It is longer than three years, and three years is the longest suspended system available. Samsung is the Biggest Company in the group that contributes the majority of earnings for the group and south korea. He has been in jail. They have not allowed him out on bail. He had nothing to do with the running of samsung for months, and record profits and earnings. Emily do you think this will have zero impact . Bob i think it will. It is the nature of how the company is structured and how isolated the top groups are. A lot of this case was about them being able to maintain control over some of the smaller pieces so they could have a large voting right for the whole thing. As far as the individual businesses, there is nothing that is going to change. We have not seen any impact on the brand. Samsung has been through the note 7 fire and now this. This is not going to do anything. Emily who takes over from here . He has a couple of sisters who have not been involved in the electronic part of the business. He was not running the company. He was not the c. E. O. They have professional managers for the divisions. Those guys are still in place and making decisions. Emily we are told he had an impact on the vision of the company and dealing with regulators and building the global brand. He definitely had a figurehead role as his father did before him. With the designing the galaxy phone . No. Emily who takes his place . The argument is no one is necessary. He is not losing his stake holding. They are still there. This network is like a spiders web of holdings. It is still there. They still control and own samsung and the general mindset. Their role in daytoday management has not been important. Now it has been taken away, we will have to see what the real differences. Emily samsung just released another phone this week. The big challenge for samsung Going Forward has been to make the software as powerful as the hardware. Is that still the case . Bob i think it is. Those efforts are happening within samsung electronics. All the key things they are doing are going to continue on. The bigger question longerterm is, does this lead to the breakup of a spider web . We could see that happen. I think it would take a decade. I think youre right. That is the risk. Emily the risk or benefit . You could see it either way. Weve already seen the headlines, all of this fuss in south korea. This has been frontpage news for a long time and brought down a president. If that filters into the way samsung does business, it is a problem. We have not seen that so far. Emily ian king, who went to south korea and saw it all firsthand. Bob odonnell, you are sticking with me. Now, apple has cut at least a dozen apps made in iran. Users are still able to access them on their phones but cannot download or update. Apple becomes more of a digital provider rather than just designer. The Services Business has increased about 22 in the last year and is its secondlargest unit behind the iphone. Coming up, the ongoing battle between alibaba and amazon heats up. Bloomberg technology is Live Streaming on twitter. Check us out weekdays 5 00 in new york, 2 00 in san francisco. This is bloomberg. Emily Southeast Asias biggest ridehailing is planning to invest in myanmar to tap into the growing use of smartphones. It is expected to spend 100 million to widen its battle with uber. It will roll out new Services Like the Digital Payment service. The president says he plans to expand staff fivefold to 200 employees. According to reports, indonesian uber rival gojack is raising roughly 1 billion from investors. It provides motorcycle rides on demand. It has become one of the most popular ways to get around in indonesia, especially in hightraffic cities. Consumers in indonesia also use an app downloaded more than 20 million times since its debut in 2015 to get food and groceries delivered. The u. S. Government is ramping up its use of blockchain technology, awarding more contracts which could fuel broader Adoption Across the private sector. Joining me from london with more on how the technology is picking up steam, Caroline Hyde, as well as my guest host for the hour, bob odonnell with me in the studio. How significant has the increase been . Caroline it has increased 13fold since 2016. We are talking 1. 3 million awarded this year. Still, not to be sniffed at. It is not likely to blame dollars raised in terms of initial offerings. We are seeing cash being splashed by the United States government at the federal level, the state level as well. We are talking fully fledged pilots now. They like the underlying technology. It is the blockchain which basically means you and i can share a database. We can put realtime transactions in and ensure those transactions are correct. The applications are endless. Hundreds have been identified by the u. S. Government. Therefore, we could see it in health care. We could see it in terms of identifying people, in terms of recordkeeping. This is something across the department of justice. We are starting to see potential applications. Emily 1. 3 million. Clearly, the Technology Holds great promise. It is still very early days. There are Big Questions about volatility, reliability. What do you make of this . Bob these are a lot of proof of concepts. It is an interesting enough technology they have to take it seriously. They have to try a variety of ways to think about how we can potentially deploy this technology, how can we overcome some of that volatility. Volatility around cryptocurrencies has been crazy. In a lot of other markets and places, you cannot have that volatility. They have got to figure out ways to adapt the technology and reduce the volatility. I think they will try it in different places to see what can work and what cannot. How they address the issues of managing the ledgers as they grow. That has been an issue for crypto coin mining. Those are issues that have to be looked at. Emily how does the u. S. Approach compared to what is happening in other countries . Caroline i think the race is on. In the u. K. , we have seen adoption hinted at in march. We had the u. K. Digital strategy announced. They talked about blockchain perhaps helping with identification. Weve had the bank of england teaming up with ripple. They are looking at how they can employ the blockchain. In europe, in estonia, a tiny forward thinking country, it is looking at using blockchain and even issuing its own cryptocurrency to fund a sovereign wealth fund. They are using it in energy to test it. China has been looking at the central bank issuing a token. We have the chinese looking also at putting data online by blockchain. Dubai wants all of its documents in blockchain by 2020. And then across south korea, japan, the list is endless. It seems as though the countries are racing to get ahead of the technology. Emily government validation could go a long way. If government organizations are testing this technology, could that also pave the way for increased business Adoption Across the private sector . Caroline i think it could. I think this would be a real validation. At the moment, the problem has been the link between blockchain, bitcoin volatility. There have been worries about its use in fraud, though gotten gains. Think of it tied to the likes of the silk road, the dark web where people are able to buy drugs or the latest hack attack. If you start to see the likes of ibm and microsoft start to supply the government with blockchain data, blockchain technology, we could start to make that distinction between underlying technology, the ledger technology, and the cryptocurrencies. We are seeing a potential bubble. Emily Caroline Hyde for us in london, thanks so much. Bob odonnell, president of technologies, you are sticking with me. Alibaba makes a push to catch amazon in the race to become the worlds most valuable company. What drives the companies on opposite sides of the world . Our interactive tv function. You can watch us live. You can go back to our interviews. You can send producers a message. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. Emily alibaba is closing in on amazon in the race to be to worlds most valuable ecommerce company. Shares of alibaba have almost doubled in price over the last year while amazon shares have only increased 25 . At 450 billion, the chinese companys work is just 7 billion shy of its u. S. Rival. Joining me in the studio, bob odonnell. And from new york, selina wang. What do you make of this convergence in share price . We have a chart to show it to you. I think there are three main reasons driving the share price convergence. First of all, there is alibabas larger user base, higher margins, and larger potential for growth. This is telling the bullish story of the Chinese Consumer. I think investors are starting to realize alibaba plays an integral role to the lives of chinese middleclass consumers. In addition to that, lets not forget alibaba makes a lot of money. Its income far outstrips amazon. The higher margins are driving the bullish sentiment from investors. Investors see alibaba as having more white space than amazon. Alibaba has been rapidly expanding in fastgrowing Southeast Asia and other international regions. Not to mention world china. This is a huge area of green space for alibaba to push into and bring the rural chinese online, driving alibabas bottom line. Emily is it fair to compare amazon and alibaba this way, by looking at their market cap . Bob it is tough. What we are looking at is sort of like comparing the Chinese Consumer economy versus the u. S. Consumer economy. Each of these companies are highly associated with the regions within which they play. They are compared because there are similarities. Large ecommerce companies. They have made investments in entertainment platforms and services. There are interesting similarities. There are a lot of regional specificity each has. And there are unique characteristics on both sides. The other big point selina made that is critical is alibaba is making money now. Amazon is investing a ton of money now. That is a big difference. Alibaba is investing but not to the same degree. The bottom line looks much smaller for amazon. Emily we traveled to beijing a couple of years ago to speak with jack ma. There was some concern around that time that alibaba might be a lot of hype. What has changed when it comes to Investor Sentiment . Investor sentiment has come almost a full 360 degrees over the last few years. Late last year, it was foot on the u. S. Notorious list of counterfeit goods. Bear sentiment spiked over the last few years. There was the sec investigation and outspoken words from prominent shortsellers saying the whole thing was a house of cards. Since then, alibaba has consistently beat earnings and shown impressive topline and bottomline growth. It has come down hard on counterfeiters taking down a lot of fake websites as well as working with Law Enforcement to deal with that. There is some bearish overhang. The sec investigation is still ongoing. A lot of investors and analysts admit the Financial Disclosures are rather opaque. The impressive and compelling numbers are clearly asking them to overlook it. Emily where do you see the most potential, bob . They are tied to their regions but both aspire to be global companies. Bob if you look at Amazon Web Services and what they are starting to do with alexa and other services, alibaba the manner with which they sell and approach it, it really does tie to the regional areas. In the u. S. , you have a lot of Companies Moving their businesses to the cloud. It is happening in china as well but i dont think as quickly. It happened faster here. That is why i think amazon has some advantage. On the other hand, there is that huge chinese Rural Consumer selina mentioned with Enormous Growth opportunity that clearly amazon does not have. And then there is the regional story. Alibaba in Southeast Asia, a huge growth opportunity. Europe will be harder to crack, and other regions for amazon. Emily what is alibaba need to do to justify the share price and continued rise . Jack ma is going to have to show they can execute and integrate on the gigantic deals made over the past few years. Many have been a bet on Offline Retail. Amazon has also pushed in this direction. But alibaba has been doing it aggressively for a longer time than amazon. Jack mas vision is they will revamp this trillions of dollars of Offline Retail and bring it into the 21st century. That means leveraging the data alibaba has to make the Shopping Experience easier. They have an incubation type of Grocery Store already executing on the seamless check out, allowing you to deliver in 30 minutes using warehouses. They need to show investors these billions pouring into other ventures will pay off and contribute to their bottom line and continue to drive that growth. Emily selina wang in new york, thanks so much. Bob odonnell of technalysis, you are sticking with me. Coming up, the turmoil at uber continues. We will dig into the biggest headlines of the week along with top tech stories. This is bloomberg. Mark i am Mark Crumpton in new york. You are watching bloomberg technology. Harvey is now a category three hurricane with maximum sustained winds of at least 120 miles per hour. The storm is bearing down on texas. It is a hurricane that is going to prove more dangerous than many hurricanes. Not only are we going to be dealing with the high winds that typically come with what should be a category three hurricane, but we are going to be dealing with recordsetting flooding in multiple regions across the state of texas. Mark harvey is forecast to make landfall in texas late tonight or early saturday. According to people familiar with the matter, special Counsel Robert Mueller is examining what role, if any, former security advisor Michael Flynn may have played in a private effort to obtain Hillary Clintons emails from russian hackers. The u. S. Has imposed new economic sanctions on venezuela. President trumps action bars dealing in new debt and equity and the stateowned oil company. The u. S. Is also banning transactions in certain existing bonds owned by venezuelas public sector. The u. S. Ambass