>> live from pier 3 in san francisco, welcome to "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i'm emily chang. the future of bitcoin very much -- thieves may have made off with money of the currency money. we will talk about that a little bit later. rism program and

whatsapp. our lead story of the day, caroline hyde sat down with the blackberry ceo. they talked about the value of messaging's bbm's pprvice in light of the whatsa acquisition. >> i was really surprised when i started doing more research on whsatsapp. isot of study said that bbm dominant. would be typically places outside the u.s. it is strong. it is clearly an asset of blackberry. >> messaging is a basic sort of means.

there is a competing messaging service called message me. they said they thought a spike in users means that people survey one it when they wanted. whateverk will happen you want to call it, two interesting. it is it does not mean the dollar will transfer. it doesn't mean $35 billion was spent over the top. it needs a win away from the carrier. the value -- it doesn't mean it went away from the carrier. the value -- we will talk about the way people are using messaging in the enterprise as well as individuals. >> blackberry also unveiled two new phones. one has the keyboard.

the other is a touchscreen phone. listen. a lot of people might care less about security, but they really care about the data privacy and personal privacy. that point has not really been made well enough in the market. when i speak to people about what is the advantage of andkberry, security collaboration and communication. all of that good stuff. i never focus on what we do well, which is privacy. >> what about the focus of messaging? reassess make you instant messenger? is this an area or unit that you can spin off? company,g a public

anything to help the shareholders, i need to take a very serious look. that is a very serious point. buildi think we need to off that base and build the engagement. we have a good base. about 85 million active users. the engagement time is quite good. it is usually about 40 minutes daily. that is a good engagement time. usually our 85 million are the professionals. people that are about productivity and all of that. that is a good thing. we need to do this more of the -- wees and in a price need to do this in more of the features in the enterprise. then we will have other features that i will not preannounce, but we will have more services and

capabilities that we are working on. in the next 12 months, it will be announced. productivity and collaborations. we are very excited about that. it will be huge. point thatt to the we could showcase the potential, it is too early to think about $19 billion. other players have -- no one has secure messaging infrastructure. we are the only ones who have it. it is important that we showcase that and use as a differentiator. >> what about wearable technology? >> everyone has wearable.

i do not have a plan of that. i think it is too early for us, for blackberry. full with ands number of things to do. i have got to get the service business going again. i have got to get bbm scaling. designs inin more the verticals. it is not just about a car. it is one that people can make off of today. we have a big footprint on that. otherk we need to win verticals whether it is retail, logistics, or manufacturing. if we can start winning all of those applications, i think we

will be much better. wearables, it is too early for me. >> what is your favorite gadget that you have? >> my favorite? >> gadget. the one that you like the most that is on the market. >> i do not know. [laughter] i'm not a gadget person. i think i am more of a serious user of technology. i think i have got everything i need. >> what do you think he means by that? he looks a little stumped there. >> it is interesting the pace of technology. he is very big on cars. ford decided to go with him blackberry over microsoft in cars. he thinks we will not

necessarily be holding a device in the palm of our hands, but embedded in everything we use like cars and our homes. sensors will be everywhere. --i think it's recognizing he is recognizing where the assets really are. that turnaround was quite successful. he is bringing a new approach to blackberry and recognizing that may be the software is a valuable thing. selling the- devices themselves may not be a strong suit, which is what the previous manager was trying to do. a $5hole company has billion evaluation. in barcelona with our caroline hyde. coming up, facebook buying whatsapp. softbank once a stake in

lime.pp's competitor, ♪

>> welcome back to "bloomberg west." i am emily chang. t-mobile has announced a third loss for a consecutive quarter. that is because subscriber gains resulted in higher costs. 850 thousand customers last quarter, but the discounts it is using to get those customers are costing the company big bucks. revenue rose 39% from a year earlier. we have been discussing one of the possible suitors for t-mobile and softbank that owns a part of sprint. may not be competitor to whatsapp. >> as we have been talking

they want to see where the business is. they're starting to recognize the great that there. >> businesses have taken a big chunk out of that revenue for the carriers. we will talk a little bit about that. i know george herrick, employee number seven thomas wright? right?n, okay. >> they're becoming something that you use half an hour to an hour every day. it is also ubiquitous. everyone uses them. your kids use them. grandparents use them. to get a platform that everyone uses and a locker day, that gives you a lot of leverage over how people use it. a purelyusiness is not messaging business.

it is a push to talk business as well as messaging. focus on the enterprise. am i paraphrasing it? is the in a price case used differently from the consumer >> what is happening in general is there are new companies that are bringing services over the top. has done very well. our primary focus is to try to reinvent push to talk. it is about $100 million a year in the market. >> messaging has basically eaten the revenue. will it be doing voice calls as well? what does that mean for the carrier? >> guys started doing this years ago. it was initially on the desktop. the big push for mobile.

mobile is giant. not everyone has smartphones. for people to use applications and go over top and not use the formula given by the carrier. that is a big transition. >> this may not be all bad news. mark zuckerberg spoke about our new ships with carriers to offer basic services. when he talked about is providing basic services. thanks to a data plan from the carriers. people would be paying for some things, but the basic things. >> i think setting this up as a carriers getting their lunch eaten a little bit is -- the carriers made a deal six or seven years ago to get better devices on their networks and to on thepps to go networks. india rapidly transitioning their businesses to do that. trying toe still rapidly incision the businesses

to do that. they want to get a lot of the games coming out of the app system. the fact that other people are adding value is a bonus to the character. everyone else calls them apps. have these guys not existed, the revenue would not be there. the data revenue will explode. i think it will surpass -- >> the carriers will do just fine? >> i think that is accurate. people are worried that they will lose services. no carrier wants to be a dumb pipe. it is a terrible name. they're not dumb pipes. a provide us the internet as we travel around in the mobile environment. it is critical. nothing works without the internet. they are still transitioning us from voice services or sms on plans. >> on the internet, what is

happening with companies like facebook and whatsapp is that people are specializing. whatsapp took what people are doing and specializing to only doing messaging. nothing goes badly. carriers specialize in delivering ip quickly for services. they start doing fewer things, but doing them better. that is the trend. >> if i were a european carrier, i would say something is going badly when voxer gets all of my customers to voice calls and texting and whatsapp -- >> even the carriers would agree with that. >> we are providing more services than before. reliable message delivery, voice and video services, photo and video sending. what you are getting is the data

plan here at it is a $100 billion company. they want the good parts. they want the good parts about the bad parts. that is not a reasonable way to analyze the trade-off. >> what do you think of mark zuckerberg's idea 40 internet? will carriers -- the idea of no internet? will carriers go for it? just messaging are just wikipedia? providing access to the internet need to keep doing that and charging for it. it is continuing to work around the world. companies like facebook and whatsapp will need to provide cheap or free over-the-top services. >> why is this happening now? >> mobile is such a significant trend. smartphones are now computers.

apple called the iphone the iphone. it is not really a phone. the phone is one of many applications on your device. it is a mobile computing device with internet access. >> we will continue this conversation after a quick rate. -- break. we are talking about messaging apps. we will be right back. ♪

>> welcome back to "bloomberg west." messagelking about services like whatsapp.

we have tom katis and georges harik. >> should be continuing. you should see a lot of consolidation. >> who will buy them? >> i do not know. whatsapp is now part of facebook . >> is voxer for sale? >> everyone is for sale. we're are very focused on the enterprise. you're focused on building a sustainable business that generates revenue and profitability out of then taking that path of drill out cheap user base. we are very interested in delivering services that are not just sms. we have a lot of work to do. we're working to produce new experiences. we want to make voice and data communications ubiquitous. we went text communication to be

ubiquitous. that is what we are aiming for. we're not aiming at a pure money favorite of the carriers. we want to work with people to bring the solutions. if he went to summon that would make our solutions ubiquitous, -- if we went to summon that solutions our iniquitous, probably. >> thank you. a design conference will take place here in san francisco. we caught up with some speakers, bot &ing tobias for dolly. they specialize in robotics. >> wow. what a design. is design? design is not a discipline to me. it is an approach or methodology. the power design can be implied

-- applied in many areas. it is a creative design studio. what we do here is the result of a unique culture where we intertwine both the artist and engineer. it becomes a very powerful thing to generate innovative and creative ideas of the world has never seen before. we have done a lot of commercial work and have done a lot of work in film. we were involved in the film "gravity." were ase robots that possible for the motion control on the set. we build a lot of things here. we do not build a robust you see behind me. these are manufactured robots that we are constantly asking to do things that they were never designed to do.

working at a place like this is inherently challenging. the focus of the job is to imagine things that are not really possible and then find ways to bring them into reality. ♪

>> this is "bloomberg west," where our focus is on technology and the future of business. i'm emily chang with your bloomberg top headlines. disney is starting an online movie service called disney movies everywhere. it will be an effort to increase sales of films. the movies can be played on the web as well as through apple devices. users can link to itunes and import films they have previously purchased. decided to keep jobs in a tom state of new york. the agreement with the state calls for the company to restore

hundreds of positions that they cut last year. job cuts have been done to maintain profit growth as it struggled during the technology to they's transition cloud. apple is coming out against bill.lgbt apple is well known for taking pro-lgbt stances. helm ofne years at the a company, one man is stepping altman.sam a joins me in the studio. me in the studio. >> i'm nervous, but excited.

thise-mailed paul about last week. he said that sam is in charge. i'm not in charge in any way. it is all sam. >> it is a big responsibility. it is something i care about and believe in. it is an important institution for startups. >> what is your role going forward? >> paul is going to advise startups. c, there werey only eight companies in the whole batch. our operationsg and hiring partners and just making the decisions it takes to run the day-to-day. there is so much at y c. advise startups. many startups you guys have invested in so far here at they

network after they get funded and never really leave. >> right. unlike a regular venture capital firm, we tend to have extremely close relationship with the startups we fund. even 549 years after the fact. nine years after the fact. >> why did paul pick you? >> honestly, i think all of the partners are really good and are super collaborative. >> he thinks highly of you in particular. he put you on the list of the five most interesting wanderers with steve jobs and larry sergei. >> that was very flattering of him. >> what is your strategy? why do you think you should be in charge? is thatoal for y c

there is the shift to more startups. startups are the driving force of innovation and hopefully economic growth in the future. i think we could be the nexus of the new startups. our goal is to fund the best and have been a part of the community. one of the things people do not understand about us is how tight the community is, our alumni. it is incredibly powerful force to have this group a really talented people that run startups that really care about helping each other. growing the community and make sure that we have the best startups and helping them, that is what we are going to do. its champions and its haters to be honest. how do you combat that? isthe haters thing frustrating. any time you try to do something new and different, there are a lot of people that will be

haters. the way we combat that is to keep funding good startups. as long as we fund the next writex, the haters can mean things online and we will keep doing what we are doing. i think this is a really important mission. paul said the total evaluation was $14.4 billion. >> it is over $20 billion now. >> that is with the dropbox new evaluation? >> no specification. >> what is it like without dropbox and brnb? >> those two are the biggest. men's start upper folios, the top startups are worth more than

the rest combined. the number two is worth more than the rest after that. that does not scare as. that is a model. what is cool is that we will bets.high risk th that is that some of the critics have said. you have got two big hits. dropbox.d a lot of companies disappear. >> that is the model though. that is what we want. 17 companies are worth more than $100 million. two. just not these there are many more. didn't have a big distribution like that, we would be doing something wrong. the startup model is predicated on the outside hits and a lot of

failures. >> what will you do differently? >> my most important job is to not screw up. [laughter] refinementslot of that can be made around the edges. i think we can grow faster. i think we can do more to engage our alumni. we can encourage more people to start startups. c feels like it has the momentum of a freight train. i main job is not to pull it off the tracks. >> the biggest mistake that founders may? >> there are so many. it is hard to pick one. the biggest mistake is focusing on the wrong things. they're all of these things that could get your attention. for one or two things that really matter that make you successful. it is often something like getting coffee. if you look at the people who

are successful, they focus on making a great outing and engaging with users and making them love them. the biggest mistake is focusing on anything than doing that in the early days. >> what would you say to the doubters? >> i think it is fair to have doubt. wait and see. it is reasonable to have doubt. it is a hard thing to do. i think we have an incredible group of partners and alumni. i think we will be able to do great things. we played this really important role. >> i will wait and see. i am excited. >> me, too. >> sam altman, thank you for joining us on "bloomberg west." coming up, aaron schmidt weighs in from everything on competition to whatsapp. that interview is next. ♪

>> is the tech world limited to only four dominant players? that is what eric schmidt thinks. he talked about the strengths of these four companies with charlie rose i was joined alongside by the google ideas director who is also the co-author on the best-selling "the new digital age." the monopoly position for products that are free of barley used in platforms they do not sell. example, nokia is busy announcing an android-based phone. shocking. an interesting example of the power of open sources. >> but there's also this. you acknowledge that google missed social media. >> we did.

>> microsoft missed social need and a number of other things. how does someone as smart and savvy as google miss social media? >> i take responsibility. >> a ceo should do that. >> absolutely. we were doing chrome. number one internet browser. we were unable to do that one part. we had a good pyramid. >> are you happy with your market value? >> i think the company is happy and the shareholders are happy. [laughter] plusogle and google continues to do extremely well. if you take a look at google plus hangouts, phenomenal. there are many reasons. is interesting we're talking about this. basically what you have said about the gang of four is that

they are competing with each other in a variety of ways. >> the fight between apple and google over operating systems is producing enormous production in the prices of phones. if google were not there, the iphones will be a lot more expensive here if apple went out there, all of the androids would be more expensive. the consumer value is enhanced by this brutally. at amazon. amazon has completely restructured the way they market and just to be products. it done a phenomenal job. -- and distribute products. they have done a phenomenal job. many people believe what will be the big revenue for them -- >> let me talk about facebook. there was an interview with mark zuckerberg about the whatsapp app. >> whatsapp. >> whatsapp i mean.

it has been reported you were in the bidding. facebook got it. to $1going to be up billion. >> didn't estimate is that there are more than 400 million users on whatsapp. it is a way of bypassing the sms charges. it is primarily used outside of the u.s. evaluation is a question of what to do with that? millionded you a 400 unit network, how much money could you make from that? it depends on how well they execute. they could make a lot of money or not. if they do not make a lot of money off of it, it is a bad deal. >> what about yahoo!? a lot of users. >> of course. >> but they are not on your list. where are they?

>> they have an excellent ceo that we know very well here it they have to define their part of the platform strategy. >> will it be a shared banana? >> i hope that the market never goes back to the microsoft dominance i lived through 20 years ago. it's bad for competition. i fought it hard. i'm very proud that there are four streaming well-run companies that i'm not identifying. i want there to be more. >> will one emerge as -- >> unlikely. the microsoft dominance is possible because the distribution was limited. it was limited to the way pcs were sold. today there are so many ways to get your product out. you can do a phenomenal job over here. all of a sudden, oh my god. instagram was only available on mobile.

's lastfacebook acquisition. >> is that your primary challenger? >> facebook tends to do very well. they have quite a few people that we know. this is all about the future. withat was eric schmidt charlie rose. you can watch all of the interview tonight right here on bloomberg television. coming up, we will talk about a company possibly going bust. that is next. ♪

>> welcome back to "bloomberg west." on the heels of twitter debut, a lotblic of tech companies looking to go public. alibaba, square potentially. >> who knows?

people and the companies. it is an interesting time for smaller companies looking at ipos and what is going on in the markets. he always talk about the businesses. we talk to an important guy when it comes to technology. dangers ofbout the high evaluations present. >> we have seen it in a variety of industries. you are chasing this evaluation that wall street will get you if you aren't bloomberg growth company. it is almost like utilities. they are returning cash and getting rewarded for dividends and buybacks. they can grow that much. they are reacting in a muslim direct opposite now. i prefer to own those done the ones chasing revenue. >> you guys cover so many

companies. i wonder when your analysts are covering those companies, are they talking to them about hate, the fed is tightening or china is slowing down. do you want to change what you plan your business? >> i would think that would be above their -- not a great, but if they are starting -- they should not cover that company. the companies we want to cover our companies that have good management and think about their businesses. react to some of that news. they need to focus on the customers and the margins. they should be getting guidance. -- do youpanies think; dr. companies have been they put themselves in

the stronger financial position are recognizing that hardware is not something like it used to? >> i think it is driven more by shareholders and activists. the gravy train of being a board member and a ceo is a good gig. i think you listen to the shareholders. that does not mean they are not trying to do the right thing. money.% they are returning cash for a variety of reasons. investors areense recognizing the shift in the markets or the fed talking about the commodity prices in the last two months? is that changing the way they're starting to look at some of these big growth companies and think about their investment? >> it feels to me like a supply and demand market and not so much that thoughtful. i'm not saying that there aren't

five fund investments. it seems like the market is being driven by a lot of cash and not enough public names. i think what is happening are the mutual fund manager gets money in and he the work in the same names. it is kind of an easier way to manage. clearly a lot of guys do a lot of work. right now what we are seeing the way the market never seems to go down is a supply and demand. >> do you think it was a lot more ipos as a result because of the demand? >> right now does not feel like the bell is close to ringing. what i hope we see is quality ipos and i would love to see some of the jobs market intentions take place for smaller companies to generate cash and they need access to the public market, but cannot spend all the money to be public here at i would love to see that smaller company ipo.

-- you must a lot of companies that come out public. i think you seeing that with biotech. i'm not a biotech analyst, but they are taking a lot of companies public. they're easier to put big valuations on. orould love to see good small companies that cannot afford to spend all of the money with the traditional ipo and raise money in the public markets. they are making acquisitions and building a business, but not growing at 100%. >> are we seeing the stills? >> not yet. i think you are seeing the most high profile, the ones that are the biggest. of those are the ones that are going public. what i'm afraid of is that it

will result in companies that are related in some way to these big companies, but have good business models. there is clean tech and the chinese place. i'm fearful that wall street will start to take advantage of that environment. yant riley. brian >> interesting stuff. it is time for the bwest byte. >> one number that tells us the whole lot. had 34% market share favorite 25. it has zero percent. a number of companies jointly announced that it will file for bankruptcy. it looks like six percent -- >> is this the beginning of the end for bitcoin?

yes or no? >> no. >> we will see you back here tomorrow. ♪

>> welcome to "lunch money." let's take a look at the menu -- we've got google vision -- and mobile, blackberry, is it back? the ceo has a pitch of the meeting in barcelona. the pros and cons of a smaller military. david rubenstein talks dealmaking and 2014. meet the robots that help gravity in our weeklong design series. we are kicking off with a big

reveal -- twitter --