We think this is where they will unveil their galaxy as five. This is happening in downtown manhattan. We have also been talking about Mark Zuckerberg speaking from mobile world conference. He just wrapped up a keynote there. Tradeshow attending a like this is proof that mobile is a huge priority for tech giants like facebook. The company is fresh off their acquisition of the messaging platform whats app. Lets hear what zuckerberg had to save the big price they paid for the service. By itself, its worth more than 19 billion dollars. Its hard to make that case because they have so little revenue but the reality is there are very few services that reached a billion people in the world. They are incredibly valuable. This is the one service that gets to a billion people and ends up not being that valuable, i dont think i am. Zuckerberg spoke about the initiative to connect billions of people to the internet, saying there are economic benefits to providing Free Internet access to emerging markets. Theen to what he said about profitability of this project. We are near breakeven and have a bit of work to do but we are very early in tuning it, so this is what these partnerships are. Folks and you will spend more than youre making up front. But from what we have seen in the rate of improvement, we are highly confident we will get bes to a point where it will highly profitable. When a great group of guests to discuss. David kirkpatrick will be joining us from barcelona shortly. Paul kedroskys from san diego and a former facebook executive, Allison Rosenthal is here with us in the studio. It is worth more than 19 billion, but he doesnt know for sure if its going to be around a year from now . Really . It is hard to comment on the price because we just dont know at this point. It is growing at a million users a day. People are getting onto this Service Every day am a talking about things theyre interested in and chatting with one another. That. Is real value to more than anyone how difficult it is for an app like this to hit the mainstream and stay there. I had a guest last week who says he doesnt know what hes going to be using on his phone in five years. If thats the case, why is it worth it . Its interesting to look at what was happening when they started. In 2009, they were the first crossplatform overthetop messenger to emerge and they own the exhaustion is relationships. U. S. Areutside the growing like crazy and for the past four and a half or five years, they have building, building, building. It is not going to go away overnight. The numbers and lines show quite the opposite. The platform is amazing and the numbers speak for themselves. What is interesting is not how much business or how many, but what the businesses. Yes, they are taking money from the carriers, theyre just killing the business. What do you make out when you look at the evaluation and type of metrics facebook must have been thinking about . You were hiding in the wilderness last week, we were going at this in terms of looking at the universal gravitational concept of purchasing companies. This 42 per active user, you can look at another revenue purchase made in the 1990s with microsoft buying hotmail. We have seen these kinds of numbers for companies at this stage who dont generate revenues and im not particularly troubled by that at all. Looking at the size of their active user base and comparing it to twitter, you can see a lot of opportunities to produce material revenues in very short order depending on what dials they decide to turn. Companyunning to see a produce a network of this size and such short order. Over and that happen over . Imnts join and they say out, thats what makes facebook a bad neighborhood. That will be a pretty problem for the services, maintaining any sort of persistency. Athink we are going to see series of acquisitions like this over time. I want to push back on what paul said. You were a banker at goldman users, it wasnt even it was eyeballs and page views and those were serious the tricks discussed around mergers and acquisitions. Number of users is silly unless its revenues attached to users and i dont see inning there. But i be debbie downer, think its a hard thing to get to. No dcf one there was the analysis. Growth story. What paul mentioned with respect comparable as you start to tm on value, but you raise a good point. Whether or not facebook ultimately introduces ad products, they said they wont. This has such potential, these are Customers Using this roddick , this one plays every single day, so there has to be opportunity there. What about making money . We have his mission has been to connect the world and that sounds very benevolent but he talked about presenting this plan to his board and said i dont see an immediate way this will be a good is missed, but i have to believe it will be. In the midto longterm, his face book ends up being the Underlying Network so every time someone connects to the internet or 50 of the time, that is valuable. Is that possible with the way google and apple control at right now . It will be very interesting to see how internet. Org works out for them. I am hugely skeptical about that stuff. I find that happy talk rhetoric, i am happy hes doing it but i dont think it has material business consequences and will probably frustrate many investors as they hear how much time and effort i like what facebook does more than seeing what they do. When they talk about what they are doing, i get agitated and think this company is completely mad and then they go out and make these aggressive strategic act positions and say they are pursued to proceed to grand Management Strategies and that could work. Nevertheless, the outcome is the same. Given you have in inside facebook, is there a problem with buying versus building innovation . You have said facebook is more like a media conglomerate that a social network. Could facebook become so bloated it becomesne that like one of these legacy players having problems ike yahoo or cisco . I havent been inside facebook the way facebook thinks about enabling its talent and letting engineers and product managers and anyone really innovate the hacker culture mark talks about a lot it face significant strategic advantage. Him andght instagram they bought whatsapp and they said they are going to leave these strategies loan. Its an interesting allusion to what is going on but a lot of the success of facebook from the past, present and Going Forward has to do with a talented the way they treat this people. Which may be different from other companies out there. Versuss of buying welding, sometimes that makes sense. Innovation happens when you are the big player, that will sometimes happen and you strategically acquire that company before they can significantly compete with you. What does this mean for you guys . You have eight million users. Are you guys going to change your plan . Spinoffe working on a based on the data weve seen which has a lot to do with some of what i was talking about. Moving from purely communicating to communicating with and around content and helping people discover things and enable conversations around the things. We have a product coming out we think will address that. You are launching something completely new . We launching something completely news something completely new. Sharingk you both for your brilliance with us throughout that keynote and afterwards. Bloombergve more of west after this quick break. We will talk about comcast and netflix. If you have been frustrated watching house of cards with a slow internet connection, that could change soon. Welcome back to bloomberg west. Netflix has agreed to pay more for direct access to comcasts broadband network, a deal meant to improve speed and reliability for netflixs streaming customers. The Company Announced the multiyear agreement without disclosing the terms will stop Jon Erlichman is with us now with more from l. A. You think this is a huge deal and has huge implications for the future of the internet . The very nature of the internet changed. It means netflix will get ahead of the line and have preferential treatment on one of the most important livers of Internet Service in the world. Every other company out there who wants to get in line, they have to get in line behind that flex. Andont know if netflix deal is exclusive. What if you are spotify or someone else . It raises Big Questions for netflix. Thes the cost of running business if they have to pay for access to netflix . Lets start with the first what if. What if youre not netflix, what do you think . You think about the future of television and the idea of internet enabled tv and what amazon might be working on. Brad stone was talking about that last week. This is a big deal if your Fee Structure changes because the broadband player requires a lot more money, all of the sudden you have to revisit the terms. In terms of the cable landscape, what does it mean . On thelix just a channel cable dial . This is a lot more about internet infrastructure and the way the service gets delivered. Cogent does. They are sort of the middleman. Think of it as the on ramp or express lane. It helps take the content from netflix and the user. Youre going to jams much content on a throw, youre going to pay extra. Net neutrality rules said that would not be legal. That has been thrown into the air by a Court Decision where comcast will be a decider as to what kind of content you can get and who you can get it from. That has profound implications for business, users, freedom of speech, its a huge deal. What does this mean for users . What does it mean for me . I think netflix customers may be wondering if the bill they pay for netflix goes up. Thats a very real possibility of that raises the possibility of why would netflix do that . I would say because they saw it as inevitable. People talk about how much they are streaming through netflix and maybe its not fair. They did it because comcast was trying to buy time warner cable. They will need approval for that. They cut the deal is netflix come were going to give them good service and we do compete with them and i think thats why this comes together right now despite the fact that it could mean higher bills. Netflix costs do not go down. Is upinsane the stock today because netflix cost went way up today. We will see how this plays out, given that i am such a big house of cards fan. Have a talk with our reporter who just interviewed Mark Zuckerberg and we will talk to him next. Welcome back to lumbered west ergo i want to get straight to barcelona where David Kirkpatrick just finished interviewing Mark Zuckerberg. A fascinating conversation, watching you there on stage and you also wrote the book on facebook. What is your biggest take away from what he had to say today . I also did a lot of preparatory interviewing with him and his team and i will say it is amazing the continuing growth of the scope of facebooks vision. I dont know if you caught the thing at the end where he said if you have anything else henned for 20 42014 and says isnt this enough . You trying to connect everybody on the planet and a new way and i think thats impressive and amazing. They have taken this step and i think he articulated it ready well and passionately today. Wondering there was an interesting moment when he talked about modeling often ability. How much of that was a glimpse into how he thinks about is this, which is to say not at all he thinks about opportunity, not profit. How much of that was spent, saying dont look for any payout yet . It is incredibly perfect for that company that they have cheryl and mark as a ceo with a longterm vision. If he did not have cheryl, he could not think this way. But he has a close partner is a master business person with the company on an extraordinary trajectory that he doesnt have to worry about daytoday. I think if he continues to focus on product improvement and other stuff i think it gives him the luxury of having this surprisingly big picture, optimistic, aggressive, futuristic vision for how facebook camp lay a positive role in the planets future. But it is only because cheryl is there that it is possible. He said some funny things about his board and what they thought about this. I was trying to push them on that and did not get very far but im sure there are people on the financial side and on the board who have some reservations. Is itspinion reasonable to say it will have a longterm payoff. There are some Companies Just by having more people getting involved can ultimately make more money and facebook is one and google is another. Ande did not hear all the q a but i understood you asked him if you wanted to talk about snap chat and he said no. What the make of that . There was a question from the audience asking what about snap chat . I repeated the question from the audience. And id this is enough said with a 19 billion deal, it will take some time before we do anything else. I said with your company, you will never know. He could by other services at a good price that would help expand his vision in the near future, he would still do so. Value wentp chats up as a result of the transaction, but its a different kind of thing because its for developed countries. It is an elite service and a different universe. There was some discussion about integration and how the Department Might work. Lots of parallel services that dont necessarily interact on the front and. How do you think facebook thinks about these Services Like instagram . It is becoming a portfolio. No question. It was cheryl who recently ,alled facebook our primary app which was a stunning new direction to go. A are really starting to think of these other services as not equivalent but freestanding parallel entities. The way mark was talking about it, theres no question hes looking at it that way. One of the questions you may not have heard was a dutch journalist asking about privacy and whether the data will be exposed to facebook. Adamant itedibly would continue operating the way it always has. Its another reinforcement of the idea that these are parallel things that will be going the same way. I understand there was some discussion about china. Do you think this changes they spokes profits in china . There was an article about china. Operates in its not exactly a trojan horse, but for facebook to have any Services Operating in china is and advancement of his vision. Who knows whether paper may work in china. But i could see Facebook Messenger being allowed in china. We have to leave it there. Thank you for joining us. You are watching bloomberg where we focus on technology, innovation and future business. Carl icahn who last month pushed for ebay to spinoff its paypal business urged voters to push for the split while nominating two of his employees to ebays board. Criticized the online marketplace for lapses in Corporate Governance and singled out to directors, Mark Andreessen and scott cook for directly competing with ebay. Ebay responded saying ebay and paypal are Better Together and icon has cherry picked old newsclips and anecdotes to attack the integrity of two of the most respected leaders in Silicon Valley. Towill speak exclusively Bloomberg Television coming up later today at 3 00 eastern time. You dont want to miss that. Broke to comment and maker of set top boxes, is weighing an initial public offering. This is according to people with knowledge of the matter. The ipo would take place in the United States sometime this year. Some person at the company recentlys oak with tanks of the possibility of an offering. Microsoft is making a further push into mobile software to develop cheaper phones for emerging markets. Under the new leadership of satya nadella, they are working with qualcomm and lenovo on a lowcost phone decide that handset makers can use to build their own devices. Microsoft plans to update its software this spring. To mobile World Congress sam sun is hosting an event today were plans to unveil some new topics. Sam grobart is in Lower Manhattan where samsung is holding a partner event. Has traveled to south korea and covered samsung indepth. Lso with us is brian blair he covers samsung as well. I know we are waiting for the Samsung Galaxy s five to be unveiled, but two watches have been unveiled so far . That is correct. There is the new galaxy gear to and the galaxy gear to neo. These are refinements of the original concept sam shut samsung showed last year. Many view does is being clunky and management agreed. These new devices are much sleeker politer, and a little more wearable than the original versions. Watcheserstand it these are based on samsungs own operating system. Not android. What does that actually mean . Does that mean samsung is taking big steps away from google and android . Complicatedery dance and they seem to be doing many things that many times. Using it instead android means that data is going to go back to samsung. A samsungmpanies him and google, and recently came to an agreement about patent and intellectual property and it would appear the two companies are reaching an agreement as to which apps appear on samsung devices. Devicesbe a lot of repeated the functions of a google app and we may see less of that Going Forward. It is a compliment it is a complicated 3d chess game going on. At this newlook phone, whats the biggest question you have going into this announcement . Im adjusted to see what they are doing with the heart rate monitor. We understand it has a fingerprint center, but im curious to see how theyre going to tie it in to this fitness side of wearable technology. Is thing that is not clear what these companies are trying to do with the wearables. We dont know what the killer app is and it sounds like some song is betting his fitness. Meemily is making fun of because im wearing my heart rate monitor and my job own right now. Businessesw big that . We know apple has some patents around that area and tim cook is a big interest athlete, cyclist