What he did apple cofounder thing of an apple tv set . , steveng to a new book johnsons not a big supporter. He said, tv is a terrible business. They do not turn over and the margins suck. And apple reporter. Said inventedman a bit quite have hired a lawyer to clear his name. Dorian nakamoto said he did not work oninvent, or bitcoin. The 64 year old engineer said at the story has hurt his family and chances of getting a job at his nod had steady employment in a decade. Russias richest man has sold shares in apple and facebook and looking at Chinese Companies. Chinese companies now account foreign80 of his investments. They include alibaba and others. To our lead story. Alibaba starting the ipo process as saying it will file into the United States. Thereve not filed yet. Much discussion of them fouling filing. We know the rumblings have been going on. Theyre trying to get the waters ready. They have talked with the six different banks and huge valuation. Some saying two hundred billion dollars. This could be the largest tech ipo in history. If they offer 12 of the shares, my math tells me 24 billion. That is why we care so much about this thing. What we should explain a little bit more of what it is because alibaba has a number of different businesses and referred to as the amazon ebay Paypal Google of china. How do you describe it . I want to go to the match game. It is the blank of china. It is the amazon of china. The ebay of china. The google of china. The twitter of china. It owns 19 of weibo that filed for an ipo on friday. Andit has it has b2b b2c where they do highend luxury brands. And sort of like ebay but not an option bank auction, where anybody can sell. A massive scale. In their pay business. The numbers are incredible. The numbers you can only see in china. Lets talk about how significant this offering is going to be. I want to bring and the ceo of and a former google executive. I will start with you. How significant is it that alibaba is going public in the United States . Anticipating for some time. It does two things. Stake was aas a big it will be good and they have been a acquisition. Going public i have to believe will provide more currency. What kind of acquisition . They said 1 billion last year. Outright purchases and Minority Stakes. We heard they took a stake in aibo and it took a stake in video and Movie Production Company and it has been launching a lot of mobile areas where it has a weakness. Numbers what kind of numbers do expect to see when they file to support this 200 million valuation . Some of the numbers are staggering. Thestors will start with overall Chinese Market and growth opportunity. 600 million registered Internet Users in china. Ecommerce is a bigger part of the retail sale environment and that in the u. S. For much of western world. It is a company that has a sweet spot of some the key categories in the chinese economy as the chinese economy becomes more consumer oriented. A big base to start with and as you know, investors want to see top line and a bottomline growth to support the valuation of 200 billion mike and ply. Is it slowing down . Is. E think it you expect. How much of a slowdown . That is the growth itself organic . Muche done a lot of of the growth is through acquisitions. Or is it truly growing . One of the concerts a you can 1e in the weibo, here tier and 2 cities have seen a lot of growth for these businesses. After it passes the cities, not a lot of growth in china. It limited the potential because not all of china is a valid will. Weibo its a slowing down. The same and the United States with the twitter. Talk about the significance of going public. Eibo what kind of advantage do they see doing it in the United States . I think the Capital Markets in the u. S. Is a little better for shares. For controlling the company. Moreover, this shows for alibaba to grow, they have to start in other areas like international. There is speculation they will start to go into u. S. Markets and businesses selectively. But a big question, it is set up to do business in the u. S. . Given that the infrastructure, you see, son and ebay you see amazon and ebay, ken alibaba get into it . I think so very selectively. Alibaba is focusing on cross a border growth. It started that way you to get the chinese merchant does internationally. It can certainly do it for b2c, the luxury brand going into china. And also goods from china exported to the u. S. Alibaba has quite an operation and in the United States. Side, u. S. Businesses get their goods through alibaba. Com. Aybe a random ingredient to special kind of lotion they cannot get into the United States and they get on alibaba. Maybe it comes from tahiti. I have talked to the Business Owners in the United States. Paul, what do you think of the extent of alibabas potential to grow even more to further infiltrate the u. S. And other markets . One of the reason for the u. S. Offering, the primary andon was control, jack ma his partners want to have control over the board even though cap 7. 4 of the stock. That is the key reason they are looking into the United States. To make this company, to introduce alibaba, something a lot of people outside of china do not know. This u. S. Offering, this global offered is a way to introduce in different parts of the world. But initial partners out th potential partners out there. Even though the Growth Potential in china is great, they want to grow into the u. S. And around the world. It will be more competitive. Sweeney andming crid yu. We will talk more. Also, speaking of other big bills, facebook purchased whatsapp have many wondering what Mark Zuckerberg will do with the messaging service . Tellf the Top Developers us what could be in store. Welcome back to bloomberg west. We are talking about alibaba planning to go public in the United States and also weibo filing to go public in the United States. And formercrid yu executive at google and china and paul sweeney. Lets talk about the regulatory issues. Obviously, a lot of discussion between alibaba and Hong Kong Listed executive of whether it could be an hong kong or the United States and they decided to go with the United States, why to controls jack ma with a Minority Stake and that has to be the primary reason for him to do that. A fairly amazing thing. Looking for ma is is unique, no other company has this kind of structure he is going for. I have never seen a company where they want to have partners name certain Board Members. Fundamentally, they choose who is on the board. What is amazing that u. S. Security law will allow this at hong kong offers better protections than the u. S. The u. S. Is going to get a 1 billion likely from lawyers and exchanges and investment banks and everything. Paul, let me put it to you. The same with the weibo. Let me read this from the filing. If you are buying the stock, you are not abiding weibo but a Cayman Island holding. They said is it a problem. It may be difficult or impossible for you to bring an action against these individuals in the United States, you believe your rights have been infringed. If you are an investor, tough luck. Is that ever a problem . Always frontina is and center for global investors. We have seen it before. Yahoo had a big issue with alibaba over government issues just a couple of years ago. Yes, it is. For the filing, the structure allows jack ma at his Partnership Group to have referential appointment for Board Members effectively giving his group control, that is unusual. The way was the minority shareholders exert control over you as especially in the Media Industry is through super voting stock. Giving 10 ovals to one. That is the typical structure here. Jack ma are choosing a different structure. That is the structure that do not bid approved in hong kong. It is more typical here in the u. S. And the u. S. Will bless it. It is quite confusing. I want to talk about the fact that dick costolo is and china. Very different, they have wonder 49 chinese characters 149 chinese characters. More media and emoticons. Any likelihood that twitter is going to be unblocked in china . It is possible. It is very, very difficult for a western company today will work within Chinese Media because there are so many different types of relationships with the government in different agencies at all levels. Twitter has said it is a personal visit with dick costolo talking to the universities and students and what they are thinking. I want you to describe the differences in of services and competition between weibo and another company and twitter and how many people actually use twitter through vpn. Talk about that landscape. There were some features weibo that predated twitter in fact and twitter adopted. Absolutely. The first thing that we do not realize is messaging is not just messaging. By that i mean messaging is the of mobileor a lot users activities. Think about how much we use messaging and gaming. The services are criticals two Companies Like alibaba because it allows them to lay down services for example commerce. Paul sweeney let me ask you about accounting issues. Thereaid in their filing, been a lot accounting issues with Chinese Companies and their account as it may not be able to examine the books because of security law. Will that way against either of the ipos weigh against either of the ipos . They will look. The risk section and ipo documentation has gotten much, much more robust. A lot more risk that is illuminated. If you invest in a Chinese Company and even though it will be listed in the u. S. , there are accounting issues and regulatory issues that investors have to get comfortable with. What a couple of Companies Like baidu that have, to the u. S. Markets and this is something that investors are primly come are pretty comfortable. Paul sweeney a Bloomberg Industries and crid yu, thank you. We will be looking at both of these companies. What makes a great leader in attack . We will look at the dos and donts. A lot to learn. I am emily chang. Replaced the ceo, he had big shoes to fill. Ae of the challenges was finding a way to take Customer Service to the cloud. Along the way, he learned a lot about how to be a leader in tax. Cory is in the newsroom. Part of the transition and he pushed to integrate like social media platforms, facebook, twitter. As a result, they are seeing interesting growth. Marty joins me. Cloude ops is a application for our Customer Service. We are solving the Customer Service problem and helping people coming through twitter or facebook are any channel looking for help from companies. You took over as leader from our friend who was told about super managing in tech companies. Is he full of it . No. What is it like taking over from somebody like that and what changes have you made . N from somebody like maynard with a great culture, eyesight huge opportunity to take it in a different direction. With full support from maynard and the board. Capitalizing on mobile and social in every thing impacting everything and Customer Service. Tommy what ways you are using tell me what was your use and Customer Service. You see businesses react to social media complaints. Like the notion instead and line at a Delta Airlines for 30 minutes and tweeting seems ridiculous. Problem. Ot solve the what Companies Realize is we are all using more than one channel. We are really optimizing. You make a phone call a you wait for somebody and hopefully, they know something about you. The world has changed. People are tweeting and putting things on facebook. It could be the same person who made a phone call or an email. We realize the reality of how we are conducting business and people are looking for help. We can help make this a better. Describe what the optimal Customer Service reaction is now given in the new era. When you finally get to a person, you want to the person to know who you are. They have an understanding of what youre interaction have been previously and they know about you and your relation with the company is an today are better able to help you. You get an agent that is happier because they have a full view of the customer at a customer that is happier because they know who you are. They know you tweeted and what type of help you are looking for. This knowledge is able to come to gather much more quickly that in the past and the agent helping you is better informed and happier. Is making that kind of change in an organization of a rapid change like that difficult for a company that is still kind of new . It is. You have to embrace these new channels like you would a voice and if you would treat twitter like voice. An important channel, a new channel. Important to your customers. How do you combine . You have to share the value. Look at the help we provided. Somebody tweeted thank you. Awesome help from a Cable Company hard to imagine. Thank you very much. Thank you, cory. What is Mark Zuckerberg thinking . Former talk to a facebook executive vehicle knows what is going on inside of his head. And that is an next. You can watch us on your phone or bloomberg. Com. You are watching bloomberg west where we focus on technology and the future of business. I am emily chang. Facebook made a huge acquisition for 19 billion. Many are wondering what is Mark Zuckerberg thinking a what does he plan to do with it. I spoke to a former facebook developer for android and spearhead. About buyingasking whatsapp. It shows a marked is everything i hope he continues to be for a long time which is and proving he can pull them off and getting the deal done and one month and not backing down. It . 19 billion, is it worth only time will tell. It is hard to tell. For active users, the Market Opportunity for whatsapp could replace applications on a mobile. How big is the mobile Carrier Market . 1 trillion annually. I think had a real shot. When you are at facebook, were you unaware of whatsapp and was marked a where whatsapp and whether they start carefully watching . I think we were always aware of it. 80 of facebook users are outside of the state and we were aware of other companies. Very aware of other companies. , it was a serious observation based on the whole category. You had whatsapp and even tangome. There is a phenomenon going on at that is why they created messaging brand and ultimately, they realize the right way to win in this market was whatsapp. To give an idea of what you think mark was thinking a what he plans to do with it he got the deal done. When you want to do something fast, that is a hallmark of facebook. That is really important. You have to give him something and make the deal so compelling. Price was very compelling. I think, what hes going to do with it he is transparent. You cannot do it without knowing what your plan is an sticking to it. That is what drives it independently and giving it resources. Over time, the way it complicates compliments of facebook. It puts itself that it has to have communication and social on a huge franchise to own. Do you think there will be apprtising and in ca purchases . Where did they go from here . Mark has had a real serious conversation. Anything can change in the future. I expect them to monetize subscriptions are charging the carrier. Some model that is not advertising. Not the distribution. It change is the ground . Kevin is not on the board. When instagram was purchased, it was a lot earlier. It close, it was close to 100 million active it. Half of facebook users. Just under 500 million. A different time and acquisition. Both of them are equally going to be important. What did you think of the idea of facebook work on more standalone apps . It looks really great when it came out of people have forgotten about it it seems. One of the challenges with that portfolio is getting distribution and engagement. Not a lot of mobile apps that people open every day. One of the things we saw when i was at facebook. On the flip side, the principles and building lots of mobile apps , singlepurpose apps. People want to go to an app and go to a another. That User Behavior is really strategy,facebooks to know what users want. Adaptingnk they are the strategy and there are other challenges. They have to figure out ways to engage. Murarka. Back here johnson, with me now and talking about apple tv coming up. Facebook for a long time. And how the Organization Works and what Mark Zuckerberg is thinking and maybe he is changing. Showing a willingness to involve to leave off. Tended to think of Companies Think about Companies Adding adds in, ebay at in paypal and yahoo adding sports. The notion of the standalone that mobile apps might be different and facebooks image might be different. It might be other how to around asebook that we cannot see the users. A very different way t