live from pier 3 in san francisco, welcome to the late edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i'm emily chang. our focus is on innovation, technology, and the future of business. one of text most successful venture capitalist have taken on the growing class warfare in san francisco and beyond. comparing conditions of the top one percent of the wealthiest americans to the persecution of jews in not see germany. the comments by tom perkins is sparking outrage in the tech

community and the broader world. this is coming as the rift widens between the tech elite in san francisco and everyday residents. we have talked about protest against google buses. rocks have been thrown, windows broken. rising real estate prices. this gets what he said. in a letter to the wall street journal, he wrote that writing from the epicenter of aggressive thought, i would call attention zi the parallels of na germany to the parallels of the americannt to the progressive for. i am being demonized, he says. in the not sierra, it was racial. now it is class. they have distanced themselves from his comments. they say they were shocked by his views and do not agree. this is also prompted outrage

from many in the tech community. mark andreessen wrote and said [beep]one of the leading in the state. tell us about him. >> he is one of the most successful venture capitalist in the industry. he was one of the founding members of a group that led one of the most successful investment. they were one of the most successful funds. they had an astounding 3200% return. had similar returns that returned many times their investors money. i was led in large part by investors. they ran graphics. money, all lot of the way up to and into the.com bubble. out like this?n

this he write a lot of letters to the editor? >> certainly nothing like this. this was a stupid comment. you'll find a lot of agreement with that. it is unusual to hear from him. it is usual to hear from him with a strong point of view, making a case that might not be popular. you can imagine how that could serve. in this format, i do not think we have seen it like this. >> i want to bring in a panel of experts. we are joined from san francisco. we have phil bronstein, the former chronicle editor. i want to start with you. have you ever heard anything like this coming from the tech elite? >> it depends on what they say privately. maybe i have. there is an informal thesis about the bay. hitler loses. >> you have heard them say this privately? >> there is a lot of anger and

hyperbole. mugging shuttle buses does not seem like that smart of a thing to do either. people are upset. we have talked on her show before about the fact that gentrification battles -- there is inequality of wealth that goes back -- i have been here since 1970. they were happening then. that was when the gay community was expanding and moving into areas that traditionally blue-collar african-american families were living in. they work in question out. this is not anything new. i do think that he attacked the chronicle. that is my old newspaper. he said that every word was anticapitalist. that is a little ridiculous, i have to say. the chronicle basically covers opera openings and ballet openings. they have wealthy patrons. base of the subscriptions for the san francisco chronicle probably comes prominently from the upper classes of san francisco. >> gentrification does not always have to mean the former

resident having less money. sometimes it can be beneficial to them. is san francisco having a problem the way that it has been dealing with this issue? paul, i want to bring you in. what is your take? >> the comments are -- they are contemptible and stupid. take your pick. what is happening with san francisco with the elimination of anti-semitism is beyond words. it's good that out-of-the-way. going beyond that, this is a kind of eminent -- he is of the older guard. he wants to zig when other people that. he has always been fond of rattling things to get people to pay attention to what he is doing. the reality is. he has been out of the venture industry for 20 years. he wishes people would pay attention to him. he is rattling on about things that should be -- he should be vilified for saying.

he has issues with respect to his relationship with the people who have made him best known around the world. they are entrepreneurs and the newly moneyed classes. everywhere this is happening, including san francisco a decade ago, this has been a tense and difficult thing. high propertyh prices. it will never get easier to live in a place like this. >> let's talk about preppy. home prices have drive -- risen 50%. we do not have all of the data for every year. based on what we can find, 25,000 new residents came to san francisco between 2010 and 2012. what can the city of? >> the nature of san francisco has changed a lot. there is the housing stock that has changed a lot. the whole area south of the 101, near the at&t park, they build all these high-rises. most people -- more people live there than anywhere else.

these are high-rises for people who are making money. young urban professionals. add to that the type of technology work in the business angle. the type of work that is happening in technology is more urban. it is more based on talk of things like media. it is less about that were initially making their hay out of. that is not the nature of what technology is today. that kind of manufacturing has moved offshore. the need to be in a suburban and firemen in silicon valley is no longer there. that is one of the reasons that you see the change in technology. the change in business -- there has been a surge of social marketing and networking. it has pulled johnson to the urban area. that has led to a lot of this angst about what it means to be wealthy. what it means to turn wealthy. as an agent part of american history. >> phil, how would you say the

city has responded? has the city done enough? there are not enough new places. >> the city has not done enough. there has been a lot of talk. this may be the beating up of the google shuttle buses -- maybe that has called attention to this issue of low income housing. challenge the city of san francisco. i do not think it is an impossible challenge. can you keep your altar high-altitude tax people -- people you rely on for not just the symphony and opera, but for subsidizing other things. the center for investigative reporting is a nonprofit. we need these people to support investigative reporting. can you keep those people in high taxpaying and build low income housing? >> there so many environmental issues. >> i do not think there's a barrier to it. there are challenges.

the mayor of san francisco is saying that this is part of the solution. build more low income housing. i think that that is possible. if the city can do both of those things, it can avoid becoming like the potemkin village. paul, we will continue this conversation after the break. thank you. ♪

>> welcome back. i'm emily chang. tom perkins, cofounder of kleiner perkins has ignited eight higher storm of controversy after comparing the treatment of the richest one percent in america to the treatment of jews and not see germany. we are back with paul and phil bronstein. phil is the former editor of the san francisco chronicle. and cory johnson is our editor at large. we are spoken further about the comments.

he gave us additional color on why he said what he said. he added that his late partner fled from austria. do not imagine that the unimaginable cannot become real, both positively and negatively. paul, does anything justify what he said? >> no. that last homages insane. that is a wacko stuff. some of my best friends were fought against hitler. therefore, everything that i say needs to be filtered through that so i get a free pass? it is ludicrous. it is contemptible. if i were kleiner, who quite andtly came out early dismissed the comments and said they do not represent the views of kleiner perkins -- if i were them, i would take it another step. they should have taken his name off of the door. he no longer is there. there is no reason for them to be called kleiner perkins. this is a great opportunity to

cut all ties. he is digging himself in deeper in deeper. >> phil, you mentioned you think we are overreacting. >> with all due respect, why are we still talking about this? you heard the comments characterized as ludicrous. and worse. why are we still talking about it? doesn't reflect the chasm that exists? the inequality and the wealth gap? >> i do not think anybody is saying there is no problem. it has sparked a discussion. what is the responsibility of technology companies? what is the responsibility of ceos versus employees? >> that is the question to ask tom perkins. yes, there has been a discussion again -- i run a nonprofit. we look at silicon valley and the wealthy people there. they help us do investigator reporting. -- ife reality is that

you talk to people in san francisco who are working at facebook and making a lot of money, they do not consider themselves making a lot of money. they look at their friends and there is a sliding scale of are you wealthy or not? one of your correspondents said there is a definition of wealth and what it means. there's an impact that has on society. the question for the venture firms and tech firms that are doing so well is, what is your social responsibility? what is your responsibility in the valley where he said? that is the question that we ought to be asking. that is the conversation we all cap. >> i think 99.9% of people would agree that tom perkins's comments were extreme and unwarranted. but a lot of people would say there is an issue. buses are getting -- rocks are getting thrown a buses. what do you have to say? >> why are we still talking about this?

it gives us a chance to talk about income inequality. we do not often hear from the one percent defending themselves. we would hope that -- we hope they could do it more eloquently. >> don't you think that maybe he accomplished something and say what he said? >> it was provocative, but it provoked us to talk about it. >> you have been on the show and we have been talking about this for weeks. >> and we should. >> not that i do love seeing you, but we are we are again. >> the business impact is an important thing. increasingly, the economy is reflecting the economic activity of the one percent. wealthier people are driving the economy. the income inequality actually creates great risk for the economy. if there is a failure, it is most felt by the people who can afford to stop spending. that hurts the overall economy. that was one of the causes of the great depression. it is an increasing risk rainout.

>> here's the solution. valleys a rebel in the -- his books basically say a small group of people make the lands of dollars off of your data. how about if you recharge for our data to be used? he claims that that will save the middle class in the united states. micro-payments of the use of our data. i have no idea that is a viable solution or not. but it is an interesting thought. >> paul, i went to québec in here. obviously, we are still talking about this. we all agree that there is something to discuss. where does this go? >> i think that this is all, let's take the whole guy whose name starts with p out of this. look at the attention being paid to the new book about this new machine age and what is happening with the labor structure of society.

the disappearance of the middle class. there a great conversation to be had. we are having it. leaving aside this particular catalyst. we're talking about what we want in terms of how we want to structure the way we live and work and succeed in society. the consequences of having so much wealth accrued into a relatively small group of people who happen to live in a particular geographic area -- that is a conversation that can be had without having this firebreathing nonsense. and philedrosky bronstein and cory johnson, thank you all. i'm sure this will not be the end. still ahead, comcast wants to transform how you watch the winter olympic games by bringing digital content to the big screen. that is next. ♪

>> welcome back. comcast is taking the latest step in the tv industry's evolution to become alive and digital. for the first time since subscribers have used the latest set top box, they will be able to access content that was once digital only. joining us now is sam schwartz, their chief business development officer. he led the team that developed this new set top box. let's start with the grammys. a were last night. this is one of the few live events that people will not cut the cord for. you cannot get anywhere else. what are you doing to prevent cord cutting? biggests one of the moments in television history in london. one of the most-watched events was the london olympics. we are turning it up a notch for sochi. for london, it was not about the

television set. there was a lot of content that was on the mobile platforms and the web. we're doing even more of that for sochi. when you think about how many hours of events -- there are more than 1000 hours of events at the olympics. only about 500 of them can be broadcast on traditional tv. nbc has an app called the nbc live extra app. it features every event available streaming to your tablet. the news from comcast is that we are going to make that available on our platform. >> you can watch it on tv? >> every minute will be available to watch. >> when you decided to tape delay a number of events, that was very controversial. some people were pretty pissed off about it. is this a result of some of the lessons you learned? >> we are taking it one olympics at a time. we learned a lot from london.

we learned that when people have available the live content as it happens, and actually adds to the ratings later in the day. it does not take away. we think it is additive. we have made the distinction that every event will be available as it is played in sochi. >> let's talk about sochi. what will we see life? -- live? inon the comcast platform, addition to the networks of nbc, which will feature content all day long -- we will take the nbc live extra app and move it to our platform. >> how many people have the settops? >> more than one million now. we are rolling out in markets. >> that is not many compared to europe. >> not everybody. 2014 will be a big year for us. >> ok. >> we are making this available on our platform. there's also video on demand is

available for subscribers. they can watch replays. in terms of lead content, we will have every single event available as it happens. >> coming more about the x1 in general. the olympic sorry special event. there has been a lot of discussion about whether it is worth covering. >> yes. >> olympics aside, what else? >> we are using it as a way to push innovation for the company. there is a lot that we did for london that brought and -- broadened not just for the olympics, buffer between do. one thing is that people are trying to figure out how to login. if you are in your home, we can tell that you are a customer and we automatically log you in. you do not have to have credentials anymore to get access to all of that content on your ipad. we will broaden that capability across all of our platforms.

>> you are also experimenting with instant video on demand. what is that? >> we will have that in a subset of country. if you are a few minutes late to watch a sporting event on the you can start over from the beginning of that show. you do not have to wait until it is over. at any time during the airing of that broadcast, you can join from the beginning to catch the event. >> i will be watching the olympics. sam schwartz, comcast chief business development officer. thank you very much. it is 26 past the hour, temper on the markets. let's get straight to new york and mark crumpton. >> thank you so much. let's get you caught up on the markets right now. stocks are heading for the biggest three-day drop since june. led by losses in the emerging markets. earnings --forecast

they topped estimates. royal caribbean shares are surging after it posted a fourth-quarter profit compared to a loss a year ago. ♪

>> this is the early edition of "bloomberg west." you can also catch us at our later time. now for your top headlines. ukraine may be on the verge of a state emergency. the justice minister is considering declaring one after a government protester briefly took control of the justice department headquarters. the state of emergency would allow their embattled president to expand his powers. a new acquisition in europe. they are buying a dutch broadband provider for $6.7 billion. a premium over the friday closing price. the move. globals dominance.

and prices are down for super bowl tickets. it may be the lowest since 2002. there are concerns about the weather in new york. the average price to watch the broncos and the seahawks is just over $2000. apple earnings are out after the bell. how good of a holiday was it? joining us from new york is our editor-at-large, cory johnson. what you expected a? >> we're above the sales projections. we feel pretty -- comfortable with our numbers. i think it will be a strong quarter. the profit cycle will turn positive this quarter. could bends like it the first profit in more than one year. apple has no new products coming that we know up. how big of a problem is that? fiscal 14, wet

have characterized as the year of innovation. there will be an iwatch and bigger iphones. we will have an ipad pro. there is a lot in the pipeline. this is been a home run. we will see this and the results tonight. the ipod air has done very well. >> cory, will we be looking at? >> there will be the expectation of profit growth. we have not seen i'm quite some time. there is the expectation of that. one thing is to try to tweeze out what we can of success from china mobile. already hadbers iphones. most of them are prepaid. they're not likely to be iphone customers. business, it will be interesting to see what fraction -- traction they got.

it will also be interesting to look at the ipad business. that did not grow at all year-over-year in the last order. we might expect some growth with a new device as well. i will be an interesting one to see. >> brian, what are you seeing. let's start with china. what are you staying in terms of numbers? now the iphone is officially available through china mobile. >> this will be something that ramps over time. remember that they have 35 to 40 million iphone users on the china mobile network. they are primarily using two g. million iphone4 users could be sold into this year. i will be a process. a bigger iphone will be important. we will see that the second half of the year. >> you are figuring what percentage prepaid? prepaidwas one percent and 15% postpaid gives you 22.5

million sold. >> it is about that. the most important point is they have a massive base. however they got there, whether prepaid or postpaid, they have a big base. there is a huge appetite for a bigger iphone. we would not see that right away, that they second half of the year. that will be interesting. the four g network will rim bigger as well. >> it is clear that there is an appetite for a bigger iphone. is apple going to give us a bigger iphone? there have been reports of that, but you say 2014 will be the year of innovation. we have heard the opposite. there will be no new product categories from apple this year. we are seeing companies like google buying up the hot companies. >> we think there will be an iwatch in 2014. we said we are confident. there will be two new iphone sizes this year.

4.7 inch and 5.5 inch. keep the four and. three sizes this year. >> cory, how would you say the pressure is on apple? >> yes, i think there is a little bit of pressure. frankly, the stock price does actually weigh on the employees of the company. you have people there who have been working there for a number of years. there is significant stock appreciation. in silicono work valley for lower salaries than they make it elsewhere in the hope that a stock price appreciation will somehow make up for that. when you pull into the parking lot in their subaru when everyone is driving a bmw, that will start to tick you off. >> how worried are you, brian? there has not been a lot of ipad growth. if apple does not come out with new products or services, howl concerned are you? >> cory is dead right. >> people do not say that

enough. emily will never say that. >> it is -- this ipad cycle the foldout. we had an unusual launch. it was march 2012. a late 2012 -- november 2012 when the mini ipad came out. we did not have a lot for a while. then we had ipad air. it only weighs one pound. the ipad mini was refurbished as well. this was a big upgrade cycle. i feel it. they are very excited with what they are saying with tablets. i feel that is driven by apple. >> i am curious with what will happen with the growth of ipad. we know the tablets came out. will this backup new technology? cell phones grow faster, the notebooks. we see smartphones, then cell phones. tablets are at an incredible pace. will that rapid early growth

peter out faster? >> all right, cory johnson. thank you so much. we will cover apple earnings on the late edition of "bloomberg west." we will hear from google's executive chairman, aired schmidt. he will weigh in next. ♪

>> president obama will be delivering his state of the union address tomorrow. we will be covering that at 9:00. president obama's state of the union, a special report right here. it is not often that you get a tech billionaire alone around. we recently sat down with google executive chairman air schmidt and picked his brain about everything from the last time someone doubted him to how he identifies top talent. take a listen. >> the easiest way to start looking for talent is deciding if you like to talk to them. do somebody tell you something new? if you just know everything, and they do not tell you anything interesting, why do you want to work with them? you want people who are curious, who bring something new to the

party. they are creative. that is a good screen. it will work everywhere. when i was first an executive, i would watch people negotiate. it would scream at each other. they would say no, you're an idiot. all of the name-calling. i would've said that is a terrible strategy. the best negotiations are serious, direct, and representative of truth. if you are not going to do it, say no. also be prepared for them to accept your know. who was the a man smartest computer scientist of his generation. fast that everyone else's speech was rated in a fraction of the way he spoke. he was much of the architecture. in my career, i was always underestimated as a businessperson because i did not have a business to great. with the success of google, that ended. >> google executive chairman

eric schmidt. taking your tesla from new york tell a. it is now possible to do that. we will value how next. ♪

>> this is the early edition of "bloomberg west." tesla has just added super charging stations across the upper midwest.

texas and the rocky mountain states. that means for the first time you can drive the electric cars coast-to-coast while charging up for free. they can provide half a charge in as little as 20 minutes. elon musk tweets that he will make a family road trip from l.a. to new york over spring break. 2013 was a big year for big data. how about 2014? what will be the big trend? cory johnson is back with more. >> talk about big road trips. he had 17 kids. how will that work in a tesla? >> he has four or five. >> it is not that big of a car. good luck to him. big data is not a big deal. big data 2.0 comes along. we're joined now to talk about what is going on with redefining the data. steve, what was the matter with big data 1.0? >> nothing was wrong with it. it was the first phase.

what you're really looking at now is more organizations want to take advantage of what they are seeing. a way toctually get outperform your competition. that is the essence of big data 2.0. how can more people tap into the data and outperform or know more about what is going on? >> i was on the air with a great investor this morning. one of his favorite lines is software is just software. is big data just data? how is it different? >> that is a really good point. data on its own is relatively irrelevant. especially the business outcomes that you derive from it. the fact that people generate that much data is fascinating. what you really want to be able to do is say how a white turn that into something magical? here's a great example. telecommunications companies spent three-500 bucks.

how do you know when you lose a customer? that i can tell you that roughly males age 35-45 may turnover. has a 90%t cory leaving for these reasons. therefore, we should do this to keep him. it is that level of being able to look at all of the data and combining with other data is to enable you to redefine how you understand your customer relationship. >> it seems like this is the kind of thing with a lot of research -- the ability to figure out what question to ask is maybe harder than actually asking the question itself. >> i think that is very true. you can see a lot of people realizing that they know there is value in the data. i think there are a couple of great examples in the consumer

space today. if you look at the fit bit phenomena, how many people are adopting fit bit -- i was not surprised at all that google acquired nest. you think of it as a thermostat. it is not a thermostat. ability ton understand how you are moving around inside of your home. if you think of proliferation of more and more devices -- way you are able to do is really collect and understand the combination of that and directive it he. you can understand how people lead their lives. yes, you get into some privacy act specs, but if you treat the aspects -- you can really start to think about what we can do with the data to improve people's lives. >> what is interesting to me is not what google can do with data, but what small businesses can do with data. what can companies with small

businesses that they do have access to customer data, but not the ability to process or understand. they are on the cusp, but i do not know when that will happen. >> i will give you an example. it is the essence of the data 2.0. if you look at what you previously needed in order to be able to process that much data, and actually mined for those nuggets of insight, it was a huge investment. only the largest organizations can afford. what look at today is the type of technology they are bringing to market. there's is ability for smaller companies -- an example is a relatively small gaming company. what they are doing now is using our platform to be able to trace every button and click and swipe that our children are making when they are online, on games. --t is millions and aliens capture data event.

they're looking to see how they can design this game better. why does everyone stop at this point? how do i figure out who those individuals are and redesign my games to be the best in my space? they're relatively small organizations. to have the infrastructure would've been impossible. that is really what they're looking to do with data today. >> you start to get a glimpse of what the future of business might be with the service. >> i certainly hope so. we have seen a big uptick. we have seen it in large organizations and small organizations that realize it is not just the data that you have inside. people are reaching out and catching the mobile data. they're looking at web data. they're looking at all of the data to you and i are generating and will generate more. >> steve shine, thank you very much. >> thank you. we will have more of "bloomberg west" after the break. ♪

>> welcome back. i'm emily chang. edition, in the late

google is beefing up its artificial intelligence arsenal with its latest acquisition. deep mining technology -- this is coming after they bought nest labs. we will explore their motives on the late show. and we will be all over apple's earnings as well. it is 56 past the hour, which means we are on the markets. mark crumpton is in new york. >> let's get you caught up on the markets. it has been an interesting day on this monday. one of those days where we are seeing some of that emerging-market turmoil. it is continuing to manifest itself on the streets. let's take a look at the boards. the dow jones is up a little more than .1%. we see the s&p 500 and the nasdaq are still headed lower. the nasdaq is down nearly .75%. the broader market is down fractionally.

we want to highlight two stocks for you. the first is merck. they are trading at a new 52-week high. morgan stanley upgraded them to underweight. they have prospect for a new cancer drug. google shares are falling the most since 2012. the search , and is buying deepmind artificial intelligence company in the u.k. in the last two years, they spend $17 billion on acquisitions, including the nest lab deal earlier this month. congress passed a law punishing ceos who reincorporate their companies -- it turns out the law is putting more money into ceos pockets. we did some digging. zach joins me now with how the law backfired and what can be done to fix the problem. a keeper your time. 10 years -- that is a long time

for this. give us the history. >> congress got concerned about companies acquiring a mailbox in bermuda in order to avoid paying u.s. taxes. they passed a law that says there were provisions to keep companies from being able to do this or getting any benefits from it. >> how did it backfire? >> one of the provisions of the ceo would pay a personal penalty in terms of their stock and options. in fact, because of this, it is actually leading to ceos getting paid more. >> are the companies continuing to switch their addresses outside of the u.s. to avoid taxes? >> you could say we are in a second wave of these transactions happening. it stopped for a few years after the law was passed, but it has picked up again. there have been a lot of transactions in the last two years. >> what about ways they are going around this? >> one thing they do is pay the ceo's tax bill.

that is pretty straightforward. another way of doing it is allowing all of this compensation to invest early. pay him ahead of schedule. he does not have a tax bill. >> we saw a chart of some of the companies. is that the tip of the iceberg? >> in the past few years, it has been something like 13 companies, including one of the biggest advertisers in the world. periogot -- >> talk to us about the problems that this creates. --the payment comes early >> governance groups have pointed out that this creates other problems for the companies. if you pay the ceo, all of his stock early, he has no reason to stick around. you have to pay him more to retain him. it creates a governance problem. >> you can read the story on bloomberg.com. thank you so much. good to see you.

the mixed session on wall street today -- stocks headed for the biggest three-day drop since two. emerging-market concerns are driving some of the selloff that we are seeing. i am mark crumpton. we are in new york. i will see you again in 30 minutes. "money moves" is up next. ♪ to gocome to "money moves where we focus on alternative assets. we will show you what investors not to brewers are doing about as well as what is going on in hedge funds, real estate, and more. kkr making a multibillion-dollar purchase.and why they are increasing