In a statement, ebaysays they lack the experience and expertise. John donahoe received 13. 8 Million Dollars in total compensation last year, up 50 from 2012. 3 drop google wants android to be the goto platform for wearable computing, google glass. Android them to create apps for wearable devices. Aey say this could be used on wide variety of wearables, including a possible smart jacket. Hackers have reportedly broken in to the service of mount goss to find out where bitcoin was. Reports say the hackers found information indicating the mount cox executive has kept bitcoins for themselves. Lost 850,000 bitcoins. Snowdenead, edward speaks via videoconference from russia to sxsw. Cory johnson joining us. Sees really interesting to he chose the Technology Community to address these. Class an amazing moment we have a guy not welcome in the United States. Talking with great irony about how to make the internet more secure when his experience has been sharing things with the internet. The put theok responsibility on Tech Companies to think about Security First when developing a product. I want you to have a quick listen on what he said. Qwest the nsa, try all of these, not just in the u. S. This is a global issue. The future of the internet. The people in this room now, you guys are all the firefighters. We need you to help us fix this. Companies developers are the firefighters. It is easy to make a good cause to think about the user experience. A big part of the experience is the security. Press this is really weird. You have got a guy who really feels it is important to show the secrets of what our government is doing. At the same time, he is talking about ways that makes it more death will. He wants to have the companies protect user information from the government. In so much where the hackers Eastern Europe or between individuals, but worried about the government to be able to see what people are doing. He did say it is not the company should not collect data, they should collect data they need but at a certain point, they need to get rid of it and it is dangerous to have a massive store of information. Take a listen to more of what Edward Snowden have to say this morning. Qwest when we think about what has happened with nsa in the beendecade, the result has an adversarial internet, a global free fire zone. It is not what we wanted. It is something we need to protect against. After that is when he brought about companies and their businesses and how they should operate. Just do not hold onto it for too long. Take a listen to that. It is not that he cannot select any data. You should only collect the data and hold it for as long as never as necessary. Youher google or facebook, can do these things in a responsible way where you can. Till get the value you need gather data use it to discard it. The value of the data might not be relevant until much later on. Issues withl new these companies now where they can collect the data, keep our personalized data, or should they ask that abstract that and let it go. How much say should individuals and governments have about mandating such things . One of the most interesting parts of the discussion was when he talked about hed expressed a little sympathy saying, look, a few years ago when the u. S. Government started to mass surveilled people, they did not know what they would get here they were just trying something new. At a certain point, they collected so much information they realized it was not necessarily that useful. He claimed they do not get any use out of it. We need to do Something Else or we need to not do this at all. It was creating a storm of information in the vault that led to a potential backdoor if anyone could break into. A criticism without the metaphor same they created a lot of hate that. The boston bombers could go ahead and do it they were going to do. They targeted everyone instead of targeting the people who would actually do things. We will never know about successes that have been in the dark but we can see the failure. We saw in boston. Again, probably see it unfortunately, and that is the big issue here. Qwest one of the big ironies, it was happening at google hang out. Aclu technologist was onstage with Edward Snowden, who will be joining us later in talkhow where it i want to to him more about what we as average consumers can actually do it is white. User wants to make my communications and my conversations more secure, what app and what browser should i use . Creates an awareness of the government watching what businesses are doing. Other businesses will evolve in a way where whatsapp did, so theres nothing to search. Qwest coming up, more of our coverage from sxsw. The secret app, chocolate town. I bet you want to hear more about those. No secret any longer. I talked to Michael Heyward about the deal next. This is bloomberg west. Now chairman and ceo of the dcbased investment firm, revolution, and i started by asking him about valuations, gettings like whats at bob by facebook for 19 billion. No significant revenue. Twitter with a 30 billion market cap, having never turned a profit. Take a listen. The valuations are healthy. There is no question about it. Andanies drawn like crazy people are trying to figure out what they will look like five years down the road. Andtimes they guess right sometimes they guess wrong. You cannot argue the valuations are not pretty rich and pretty. You a is. I know there is concern about a bubble, i do not think it is broadbased. There are a number of companies that are healthily valued and some may be overvalued. A lot of companies are fairly valued and many are undervalued. You cannot take it with a broad brush. You have to look at the specific situation. Tell mehad an analyst he does not know what he will use on his phone in five years. If that is the case, why is whatsapp worse worth 19 million . It is hard to say. The threat is worth noting. Facebook was giving 10 of their stock to acquire whatsapp. It was not an all cash deal. They are saying we think having the app in our world is invaluable and will give us 10 of our company to do that. We do not want to be in somebody elses or bit like google were to someday grow up and compete with our facebook core business. It is as much a defensive move as anything else. Adding a million a day. Trye move into services and to compete on a broader scale basis, there is significant Revenue Generating operation. Whether it ends up being a good taketion or not, it will five years to figure it out but i understand the facebook logic in understanding that is the right strategic move. What are the big risks with Facebooks Whatsapp . What are the big challenges . What should they do . Microsoft,el when they were acquiring companies in the 1980s and 9090s, they required people to move to seattle for it all to be in one place. Facebookseen this with and instagram. Youtube, the hopes that they would keep the entrepreneurial zeal, keep the quarantine together. I think that is the right model. If you try to push them thether, you lose some of innovation. Class i interviewed eric schmidt, the executive chairman of google. Facebook, apple, google, and amazon. I will not change for quite a long time. Hat do you think of that . Christ it depends on the timeframe. Theyre calling the four horsemen now. Very smart guy. Eventually, things will shift. One of those companies will make a mistake or a new company will emerge and become one of the leaders of the pack. The idea of the same leaders today, it is historically not accurate. Turns a little bit every 20 or 30 years. 15 years ago, there was a cover of Fortune Magazine basically saying is microsoft or aol going to own the internet and the answer was neither. They not ended up revealing , none of which existed 15 years ago. That is great about sxsw. They want to change the world and disrupt the status quo. That is what this is all about and that is what america is all about. Christ apical apple is coming out with a category defining product. I am sure they will. A number of years, apple tv. Owning a strategy. A greatcompany with track record innovation. I have no doubt several years down the road there is prioritizing and sequencing. Qwest facebook, can you imagine a world . I could. When aol started 25 years ago, our bet was on the community. People connection, chat rooms, instant messaging. We were still leader of the pack. The community now is still social, but over time, new entries challenged the status quo. Will somebody challenge facebook . Probably. Five years now, 10 years from now, the ideas they have a lock on the future forever. It has a story clean not proven to be the case. And former ceo of aol. Coming up, instagram signs a 50 million ad deal. Not your typical deal. What does it involve . We will discuss next. You can watch streaming on your phone, tablet, bloomberg. Com, and apple tv. You have got a scoop on them. Class one of the interesting ad networks out there. An ipo. Eparing for the company is getting ready for an ipo meeting with bankers. Interesting information from people familiar with the matter. Greater thano do 100 million in revenue this year. Smaller than competitors such as both companies have gone public recently. Rocket fuel offered an amazing iart with a fantastic think the stock of rocket fuel, i think maybe the success of the youas really shown look at rocket fuel, 78 up. Since last fall. Pretty a has had a fantastic run lately. Filing for that ipo, secondary as well. That great run by comparison, it is not as big in terms of at [indiscernible] pretty oh is number six. Rocket fuel is a smaller company. Is when what you mean. Explain what you mean. [indiscernible] the largest of all the ad networks is google. Number one on the list of top 20. Radium is number nine. What an advertiser does, they they wantt kind of to advertise to a male 1824 in the last 24 hours has look at the seeker advertising page, and they want to send them an ad for shoes. They want to send it to them in the next 10 seconds. They goes one anna edwards and go all over the internet and find a user. It is programmatic advertising. Developed away from the likes of google. That is what the site does. That is what rocket fuel does. They also hired a new chief financial officer. Woman to be the last thing they need. They are picking bankers right now and the ipo is expected in the Third Quarter of this year. Qwest all right. We will follow it in its road to ipo purely want to talk about instagram inking its first ad deal with on the calm, a deal worth 50 million. Clients include at sea nissan, covers facebook and Digital Advertising for bloomberg industry. I read this is not your typical agency deal. What exactly does that mean . What is different about the deal . It is interesting for ittagram in the sense that is the first real foray into monetizing instagram. 50 million is not the big number per se but it just shows Mark Zuckerberg and facebook are very focused on starting to monetize some of their acquisitions. They acquired instagram in 2012. The real challenge for some of the acquired properties for facebook is to introduce advertising and ultimately try to generate a return on the acquisitions. 700 million on instagram and 19 billion for whatsapp. I was trying to spina defense between that and in instagramlike advertising programmatic ad buying on the internet is the wave of the future. This is how most of the advertising will be bought and sold on the internet going forward. Ad buying historically has been for remnant inventory, nonpremium advertising inventory. Now, we are starting to see programmatic ad buying start to be utilized by premium advertisers, premium publishers, and the ad agency as well. The more official way to buy and sell advertising. A lot of the Internet Media Companies hope is the ability to buy online a very simple to use user interface will actually expand the number of advertisers that will consider advertising on the internet, thereby generating more demand for internet advertising. Nothe folks have insisted advertising will ever be coming to whatsapp. What makes you think this will be a step in that direction . Class that is right. Not only will they operate separately from facebook, they will be managed separately. They are really reluctant to bring advertising on board. If you are facebook and your Mark Zuckerberg and you have to generate a return on the 19 billion acquisition, at some point in the future, and i would argue it would be sooner rather than later, facebook has to bring to its investors some strategy for not only growing the user base, which it has been a extort very successful on that, but whether it is for advertising or ecommerce or a more expansive subscription model, we are not sure. You cannot just lay out 19 billion with no plan to generate a return with no timeframe. Thank you so much. From ahead, mark cuban sxsw. Full of oneliners. It is 26 minutes past the hour. We are on the markets. Lets take a look at where stocks stand. Declines today after a worse the next the mated chinese export data. We are balancing a little bit off the low through the s p down. At 1874. Ur points in terms of individual stocks, a name change from green mountain. The tigger Just Announced it is changing its name. Shareholders approved the change. The ceo says it reflects aspirations of the companys future. Tesla,also watching getting sued in ohio for trying to sell its cars directly to customers without going through dealerships. Complaining it violates states law. Tesla maintains it is a necessary measure to promote technology. We will be back on the markets in 30 minutes. Among the many ingenues in sxsw, mark cuban. He spoke about starting a business and talked about the right time to sell a business. His opinion on when entrepreneurs should cash out. Depends what your goal is to her and my goal is freedom and to do something unique. Getting the streaming business going there is no one right answer. Everybodys different and you have to make your right your own choices. He sold broadcast. Com to yahoo and before that, he spoke roadbout an hour about his to the billionaires club. He was absolutely fantastic. So funny and so seemingly authentic. I really enjoyed it. The times were so frothy, our headline was this wiis legionnaires. Both of them have become billionaires that week. What market that way was essentially put a trade on that cap all of his gains in the stock and made him a billionaire and effectively sold and agreed sosell his shares of yahoo he could stay regardless what happened in the market. When he became a billionaire, he was naked. Then asked us, wouldnt he want to be yet wouldnt we want to be . Also, guess the first thing he bought. It was not a house. It was not a car. A lifetime pass on American Airlines for 2000. Christ he told me about this. Tips about how entrepreneurs can spot a gold digger. One of they tell us they like charity, to if they like to travel, three if they tell you are handsome. Remember that one. You told me none of those. You know by south i southwest is host to be a breakout moment. It was a breakout moment for twitter and foursquare. This year, the talk of the festival was the secret at. Have you tried these out yet these things, snapshot on another level. You can post an anonymous post. You are thinking about this or quitting your job or Something Like that. It is completely anonymous. These apps are going off by southwest by southwest. It just raised 10 million in funding led by google ventures. Whisper has raised about 20 million in funding or so. You have legitimate investors backing these guys. A lot of people think theyre awesome and a lot of people think they are ridiculous. I got to speak with the whisper ceo about what exactly it is there. And economist social networking sites people connect with the rest of the world around them. Are, where youou are, what youre thinking and what you want to talk about. A lot of these identitybased platforms, people do not necessarily share things about that make themselves very vulnerable. The true power of smartphones is to connect you to the world around you. This is an amazing platform for people to be able to connect anyone to anything. Christ something that would be popular for teenagers. Less than five percent of our users are under the age of 18. It is pretty much by design. Anonymity is a powerful tool. There is a spiderman quote, and with great power comes great responsibility. A famous one. In the sameymity way, and it is a powerful tool. Some of the things posted are about specific people. Some of them are mean. Some of them may not be true. Right. So, really, i tell people all the time, whisper is the safest place on the internet. Normally, when you think about aboutity, we are all authenticity. We have a strict policy where we only allows allow you to use anonymity for yourself and never anyone else. It simply does not even go live. The exception with that is obviously anything in the public domain. St what about someone like to bring up your competitor, secret, they just started in the last couple of months. Do something quite similar. How do you think youre different . Thing about all of these products is there is clearly a big matcher macro trend going on around anonymity and it is really a reaction to all of this people being aware of their digital footprint. A key differentiator is we do not tap into your address books. Doing thing you do not know. You do not follow people. There is no social capital being exchanged. Less to be gained from people posting things that may be untrue. Additionally, we recently brought on zimmerman. I want to talk about this. It is so fascinating. Nissan used to work at gawker. He came over to whisper. Right away, broke a story. I think the thing about one of the things that is so cool is we get to tell the stories nobody else is telling. And drive awareness and conversation around these things that generally are not being talked about. Nissan is hiring more journalists. An Incredible Team of shining light on on these conversations that we should be having. Will they be creating original content . It is a user generated platform. And ll about curates cure asian curation. Traffic to whisper. Tell me the strategy hiring at him and all these other people. Qwest again, part of what we are , greatto do it that things going on on whisper. How do we then take that content and take those discussions and even amplify those discussions . Somebody called him the kobe bryant of viral content. This is what he does. That is why we brought him