>> live from pier three in san francisco, welcome to bloomberg west where we cover innovation, technology and the future of business. i'm emily chang. icahn settle their battle over paypal. the dropbox ceo says his company is entering a new phase -- what he calls chapter two. check on her bloomberg top tech headlines. facebook is discontinuing the messenger feature in its mobile app. instead, facebook users will have to download the standalone

messenger app that they want to chat on mobile. users will be notified several times before the exchange takes place. this is starting in a handful of european companies right now and will roll out globally. hewlett-packard is willing to to settle overseas bribery allegations. largest fines for a company violating the act. hp says the misconduct was limited to a number of people who are no longer employed by the company. one kinghakeup at lane. the ceo was leaving to become the ceo of sports apparel fanatics. cmo is also leaving. the home retailer has in the

valuation of $1 billion. our lead story of the day -- ebay and carl icahn are ending their feud. to spin offted ebay paypal. this will not happen under a new compromise. greed to add david to the board. icon is dropping his plans to force the spinoff and add to board members. erik schatzker spoke with john donahoe. from the beginning, i have had direct conversation with carl drop this process. in all of those conversations, he has been respectful and thoughtful. >> respectful, thoughtful, one-on-one.

but nasty and accusatory and public? if that is the way he rolls. , he has been thoughtful in direct conversation. the vice chairman of j.p. morgan called me last week. he was meeting with carl on an unrelated topic. he says, look, i think you and carl should spend more time together and we did over the weekend and we talked repeatedly on the phone and we focused on not separation but the fundamentals of paypal's business and ebay's business. we focused on the enormous opportunities there are in front of our company. once we did that, we have strong common ground and will continue that dialogue going forward. >> was he part of those discussions? >> at the start of them. he is a trusted advisor to both of us and he encouraged us to spend more time directly together. this is an issue i want to

raise with you. people are looking at this agreement you have reached with carl icahn and they might look at it this way. all an investor needs now to get and confidential access at one of america's most with aed companies market cap of $70 billion is a loudmouth, a twitter feed, a website and less than one percent of the outstanding shares. >> it is two percent of the outstanding shares. >> he started with only .82%. >> what we have done here is added a highly respected, independent director. one who meets the criteria of our board. at&ts a chief executive of where he drove the turnaround. he is widely respected or his

integrity and independence. he is an independent board member whose qualifications match all of our board. donahoe withohn erik schatzker. i want to bring in our tech editor. an interesting interview by erica there. why did donahoe suddenly back down? why did icahn backed off? >> this is truly a compromise. ebay is adding another independent board member. off are not spinning paypal. it would have been a massive change in the way the company operates. paypal accounts for 35% of ebay revenue. of the business. fastest-growing piece of the business. adding a board member was a way to placate carl icahn without fundamentally changing anything they are going. >> he still thinks they would be better separated somewhere down

the line. is he going to internally continue this fight? >> presumably so. that is what he says is the best way for the company to run. 12 boardany has members. carl icahn is not one. he will continue to voice his opinion. how much it matters is not totally clear at the moment. >> what are the optics here? ebay probably comes out of this looking ok in that they added one board member, so they don't have to give up any current board members. that was all conflict of interest things that carl icahn was out for. they have conflicts with other companies. they don't have to give up any current board members. a key paypal and add one independent board member. or paypal, this could have ended a lot worse. >> carl icahn is not the only person who thinks it would be better separate.

some of the original founders of paypal as say they think it would be better separately as well. paypal's business has become a bigger part of ebay's total business. is this a question they will have to address? , is paypal ais better business outside of ebay? ebay is the parent company. and investorsers can make the case that ebay is a stronger company with paypal. were paypal to be spun out and get shared, perhaps they would ultimately make more money out that way. and it would be a stronger company because it would have more companies to serve. viewed is over for now. thanks so much for weighing in. turning to another big story of the day. cbs just announced that stephen colbert or will be the next host of the late show.

our senior west coast correspondent, jon erlichman joins us now. what do you make of the choice of collbert? >> it was a quick one. this a five-year deal between stephen colbert and cbs. cbs tells bloomberg that the negotiations started after letterman said he would retire. there are ties between cbs and viacom come a which is the parent company of comedy central. along with this being a five-year deal, they are still some questions about where exactly the show will be filled. certainly there has been a lobby for him to do it in l.a. note specifics when exactly he takes over for letterman. his final shows will be in 2015. now you have the table set with kimmel, fallon and colbert.

his faux conservative persona will not be coming to the late show. >> the john steward get left out here? >> he's already saying in a statement from comedy central that he thinks this was a great pick. he's a very important part of that comedy central story as well. erlichman, thank you. moren guru is getting even authority at apple. find out how he is playing an even bigger role in the look of your ios devices, next.

bloomberg back to west. i'm emily chang. apple's chief designer jony ive is getting a bigger role at the company. he is taking full control of the team that designs apple's iweb software. the move from to buy the retirement of greg christie. will now work directly

with ive himself. the story of two women and dozens of samsung workers with rare forms of cancer have become very public in south korea. two new movies document several families fights against the biggest company. it is the subject of a future in this week's bloomberg businessweek. story that youg have written here, following closely one young woman who died of a very rare form of cancer who was working at samsung's factory. at the same time, another woman who she was working with died of the same thing. tell us exactly what happened here. is the common, iconic moments in korea. everybody knows the stories now. it started with this young woman

who was 18 years old when she went to work for samsung. against to work at the semi conductor plant at the time in 2003. when 80% oftime samsung's revenues came from chipmaking. this was the biggest chip making plant that they had. she worked together with this other woman at the same workstation. she became sick with a form of that three and in 100,000 people in korea die from. while she was recovering, the woman who worked right next to got sick and died within five weeks of being diagnosed. these raised some alarms.

especially for the father. he was a taxi driver. he took on the nation's biggest and most powerful company -- samsung is responsible for 20% of the entire gdp of south korea. it turned into a real david versus goliath battle with the company that went into the courtroom. ultimately, he won. his case is now being appealed. that is the story that is being told now across korea and that's the story rewrite about -- we write about. that battle that has become quite iconic in the country. >> you say he won. the courts decided that her work made her sick? >> was responsible for her illness. this type of leukemia is

probably more associated with being off by chemicals or radiation than any other form of cancer known to man. it is a very specific, aggressive and very difficult form of cancer. the fathered was, tried to get worker compensation as we do in the u.s. from the government. his daughter's death. when that claim was rejected by the south korean authorities that were responsible for workers compensation, he had to appeal that in court. samsung intervened in that case and challenged the rights of the family to get worker's compensation. that is what made this such a big battle. these claims would not have cost samsung a penny yet, they got involved and was offering and paying money to families of other workers and to this young woman to get them to withdraw these claims for workers

pompensation and stoc talking publicly about the groups helping them. all of this made this a public story and south korea. say, while we are deeply saddened by the loss of former members of the samsung family and are concerned about those battling illness, we would like to read a rate that independent research has not found a correlation between employee illness and work lace environment. story, reporting of the do you feel that samsung is at fault here? >> i don't think they are at fault. it is not even a requirement that they be found at fault. it is a question of whether or not all the chemicals that are used in the semiconductor -- whether those contributed to a cause of

disease. whether there was negligence is another question entirely. >> author of this feature in bloomberg businessweek. thank you so much for sharing that story with us. you can find that article in this weeks edition of bloomberg businessweek. is known foropbox filesharing. now it is focusing on a new photo sharing app. i will speak with the ceo about carousel. ♪

>> drew houston is launching chapter two for his company. launching an app called carousel. i asked him why put a sharing needs a new app. >> is your entire life in your

pocket wherever you go. it is great to have your photos on your phone. you only have the photos from that phone. what about the ones in your computer? we bring it all together it and organize it for you so you see it as a timeline of your life. what if you could make something so easy that you could text 1000 photos and a second? >> this is chapter two of dropbox. what is chapter two? >> what are people putting in their drop boxes? files. what are these things? these to be in your house. things would hold. documents., your things in your living room or on your bed. those things are all now on service. they are in your dropbox. that will continue. we are notlized is, just building this app. we are now building this home

for life. it is your personal stuff, work stuff -- which one is it? it is altogether. >> it's mine. you are doing this standalone app strategy. facebook is doing the same sort of thing. they have limited success there with paper. what makes you think you can do this well? dropbox is a phenomenal product. what makes you think you can do other apps? >> we always start with what's broken? what should be really easy but is hard? it started with me looking for my own photos. it was a late night at the office and i find this folder called 1999. i go in and i'm like, oh my god, all of these pictures from high school. i should share the photos. of steps ite number takes to share a bunch of

photos. 100 things. -- it's just as 90. it should be one click. having carousel be a separate app is a window into your dropbox. let's focus on that problem. being able to build one really great app for photos and other really good stuff or things you do at work. instead of one app that is kind of good at everything but kind of not. that is the heart of this next chapter. >> you are formally launching dropbox for business. how is it so far? >> last time we talked about it was november when we announced it. they want their home and work stuff to be separate because you should own your baby photos and all of your personal stuff and your company owns their stuff. awesome companies

like under armour, spotify, really great companies love it. need asrically, what i a consumer is different from what a company needs and wants. >> yes. >> will the product be any different? >> it starts out being different for the people who are responsible for it ministering everything. a different have set of needs than a person trying to get something done. they are responsible for -- i'm making everybody more productive at keeping company safe. dropbox is all about security come in visibility, control. it's about i.t. being able to deploy dropbox in its business and handle these other things that the average employee does not need to think about. >> security is the most important thing to businesses. where are you in terms of how you feel security is in the

product? is it as secure as you want it to be? >> we are always doing more on that front. you can never do enough. big is really one of the purposes behind having a separate dropbox for this product. we give i.t. administrators all of that control and security. -- full of security futures features -- people don't think about audit logs and all of these things that make an i.t. administrator really happy because -- >> you added condoleezza rice to the board. she must bring a lot to the table. what does she bring? things.inds of she is such an amazing leader and person. it is so rare to have someone who has had leadership roles in so many different contexts. in government and provost of onnford and professor and

public company boards. she can connect all of these jobs in a way that i have not seen before. we have had a chance to get to know her over the past year or two. it is so great that we can finally make that happen. >♪

>> are watching bloomberg west where we cover innovation, technology and the future of business. i'm emily chang. dropbox is one of the valley's fastest-growing startups with 275 million users. d.c. is pouring in money at a -- i started by asking drew houston where the company is seeing the bulk of its users come from. >> the majority of our users are outside of the u.s. we see a lot of offers on smart phones. with partners of ours like samsung. dropbox is shipped with every

phone from samsung. of it is everyday people telling their friends about dropbox, people sharing folders or doing work with friends were sharing photos with friends. things like carousel give you all sorts of things to share with people. >> you recently filed for an ipo. we know that they spent $175 million on marketing in a year. you are losing $14 million a month. how are you guys different? >> fundamentally, people start using dropbox at work. that, it is aat much cheaper way of acquiring a business customer. there are other things you have to do -- hire a sales force and do marketing. we do that, too. from au're drawing base of 275 million people who use dropbox, it's a different

conversation than cold calling somebody. it's a lot easier of a conversation. >> you are spending nearly as much as they are on marketing? >> we are setting us up for scale. that has always been part of the model. let's get everybody to follow in with dropbox. work. at home or at there are a lot of companies that run better because they are on dropbox. it has been an awesome product for them. >> and he concerned about getting to the public markets first? we have already raised a lot of money. we don't really think about it that much. , in you leave a gas station wonder when i'm going to go to the gas station. on whats a lot more problems people have. how can we get things like carousel out the door? how do we build a better product for businesses?

we will get a round to all of that. right now, we are excited about adding people like dennis and launching products like carousel. >> and billion dollars is your $10 billion. your name comes up in conversations. why do you think $10 billion is fair? >> it's a new world now. back when the internet first started, people could tell that it was going to be in the world. they thought it was going to come earlier than it did. now it's -- how many companies reachve 600 people and hundreds of millions of people? that happens pretty often now. what gets us so excited is, this is a problem we solved with photo sharing and helping enterprises collaborate.

everybody in the world wants those problems solved. there are 2 billion connected internet users in the world that will grow to five in the next several years. >> you turn down steve jobs, right? how do you feel about that now that google and apple is trying to do this? it must be scary. we had competitors in the early days. we have always had competition along the way. it is nothing new for us. if you're going to solve a big problem among there will be a lot of other people who want to do it. how do we build really great products and make sure that what we are doing is different from what everybody else's? drewopbox ceo june houston.

how do they decide which startups to fund and not fund? we will take you inside the boardroom to find out. ♪

>> i'm emily chang and this is bloomberg west. it is time now for our office hours segment, featuring the abu chairman. -- featuring the abu chairman. we want to show you just how they handle those pitches and what happens inside those rooms windows make or break decisions get made. addition to my other responsibilities, i have created a network called the web investment network. many of you have sent ideas for us to look at. we will go over those presentations. from 15-30here companies per week. the first thing we look for is industry focus.

what was the most creative model that you saw? whether it was in our sweet spot or not. >> the one monitoring for pollution in china. it is a very big problem. >> how confident are you that they can pull it off? >> their product is still in the design stage. they already pitched to mark cuban? they are a young team. it is hard to value it. in those cases, we tend to lean on product and so the capability. it?id you try to download >> i had trouble finding it in the app store. >> it always seems impossible until it's done. hoo decide to fund any of the startups that were

pitched? >> 30 different companies pitched you based on our calls. how many of those were any good? >> there were probably four that i like a lot. one was the african angel network where i am a fan of what they are trying to do. thought it is not something we would invest in because we pull our our money into companies. i like what they are doing. i thought their expectations of what they would return back were crazy and unrealistic because it said they were better than most of the top-tier firms in silicon valley and i think that's probably are to do coming out of the chute varied i liked what they were up to. >> what was the best one? >> that was probably the best one. i like rise help.

are kids out of indiana who putting together wearable devices and health monitoring and game notification. i like all of that. pp looked reasonable but i did not know how much traction they would get. i would have wanted to know their back story. if they did this because a parent of theirs was having trouble, that would have mattered to me more. >> are any of these companies that you're going to invest in? >> i would say no. we appreciate that they all reached out. we could have done a better job in the callout to explain our areas of focus. from somebody in china who had a good idea or a new manufacturer or something. it was like, wow, that's cool. but that's not what we do. >> what are your areas of focus? >> enterprise.

anything software related. cloud computing, mobile. internet. it is pretty broad. it is all software or tech. >> you are the guy who has to say no a lot. they told me that in the old days, you were the general. describe that manner to me. i know you a decade later. was there a tough guy and you? -- there's always demands for dollars. there is always demands for product. the list of things people want to do far exceed your capability to do them. honing in developing the no is any to say art form. over the years, i have had to say no so often that i work hard

to make it human. >> what is the process when you might want to say yes? how many more meetings are there? >> we try to make it a very quick process. a yes or a know within a week or two. we will take a look at the company. finalist.y there has to be a meeting with me. they sometimes bring affiliates and. to the pitch the idea network to see what they think and then we say yes. it can be days if it's really hot. it usually is a process of a couple of weeks. , very to be faster responsive and make decisions quickly. >> have you ever said no to somebody that you wish you said yes to? >> my network team has an list.robally

over theot lost any anti-portfolio list. we have been in deals that we did not quite get that we wish we had gotten in. i don't have any on my list that have since done so well that i wish i was in there. >> do you give your team retail power? i want to have -- i don't want to break their spirit. when we first started and i would say no, you would see them and geted about an idea deflated if i would say no. aat i have done this created silver bullet where once or twice a year, if the team all agrees and i don't, we will still do it. and they use that very sparingly. how many times?

>> never yet. they have come very close. i backed off on one recently and let them do it. maynard webb talking about his vc firm. we will be right back with more bloomberg west after this quick break. ♪

tv.elcome back to bloomberg i'm olivia sterns peered we want to bring you some breaking news. we have a bit of a market selloff underway. mark is down across the board. investors in particular selling shares of the companies that have had some of the largest gains last year. this selloff seems to be continuing. the nasdaq in particular is seeing the heaviest selling. down 2.6%. the s&p polling the most in two months, wiping out all of the gains it has made over the past two days.

it down now since the start of the appeared at the nasdaq falling the most. slipping 4%.s are alexi on down 8.5%. facebook off five percent. about 6% now.ff more bloomberg west coming up next her a. cooked by renowned chefs delivered to your door on demand. munchery specializes in daily organic food cooked by in-house chefs. they're raising an additional $20 million in funding. scott is with us now in studio. he is a former managing director of goldman sachs, where he led early investments and facebook

and foursquare. thank you for coming. i'm a customer. i'm a believer. you have brought me food. that makes me even happier. what are you going to use this money for? >> it's not just a party. expandthe capital to beyond the san francisco bay area. it is great to have scott as our partner. >> i will have some popcorn while we discussed. is the most exciting thing you have seen since uber? >> trends like we are seeing chery you don't see very often. , we sawinvested in uber something very special. we saw something special in the metric and something special and the founder. we have seen the exact same

thing here. the metrics are unbelievable in terms of repeat usage, number of meals served and the core economics. kind of mind boggling. when you lay on top of that the founders with their unique backgrounds, it's an incredible story. >> tell me how you do it. the food comes on demand. some salad. chefs it works is, our produce the food and execute the menu and prepare the food that day. then you can order that they or you can order in advance if you like. >> the food is reasonably priced. what are the margins here? >> the margins are very healthy. it used to be expensive when we started because of low volume. we nowe great volume enjoy, we are able to bring the prices down. my cofounder and i are normal dads.

food to bent exclusive to only someone who is well-off and can afford really high-end food. we want to make it and democratize it and bring it to the masses. we work hard in the way we achieve the low prices. >> there are other companies trying to do this like blue apron. 51 guys are now serving hundred meals a day. how do you see this scaling? >> kitchen by kitchen, chef by chef. in the same way we saw uber. very shortly, the company will be expanding into other cities. we see this as a national phenomenon. we see it as a global phenomenon. we eat three times a day. everybody eats three times a day. we love to answer that question of what we will have tonight with the munchery. >> yes, we rely on the chef and

eal at a time. the secret sauce is the technology behind it. s by trainingechie and past work experience and we bring that to the table and work with the chefs on how to scale that to the masses. >> one of the things i appreciate is that you have -- i wonder how quickly you respond to these reviews. chefs respond directly. a customer gets to write a review on their specific items or specific chefs. the chef has an ipad. they instantly get these notifications that there is a review and they can respond to it if they feel like they can provide more information to that customer. they stand to learn and a lot to get that feedback. >> is booed a different thing? i wonder if it adds additional competitions. >> it absolutely involves

competitions. the ideao talk about of data and real physical things coming together. everybody talks about software eating the world. we like to think about it enabling the world. take a step back and look at the first wave of the internet. it transformed media. of the creation and consumption of media by consumers. is doing that to commerce today. it is enabling things like this to happen that previously could not have happened. my wife orders our dinner at a stoplight and it's delivered within a tight window. or i ordered dinner and i'm the hero. >> technology allows the customer to add a random item. let's say they have a friend coming over and they at a item to the order that same day and can cancel an item. they can say, i normally order for 5-6 but i'm running behind.

i want to go to my friends house instead. with our technology, it allows us to do all that. >> seattle is next. thank you both for stopping by. thank you for bringing me food. i appreciate it. it is time now for the bwest byte where we focus on one number that tells a whole lot. jon erlichman is in l.a. what do you have? >> fly that food to me. 8 -- amazon's jeff bezos said today that the company is already working on the designs for the eighth generation of its delivery drone. there it is. video thatprime air got all of the attention back in december. they are already testing the fifth and sixth generation and

designing the seventh and eighth. >> maybe we will be chery by drone at 10 years from now. when is this going to be coming to my doorstep? they'react that designing the eighth generation reminds us that technology is there. it is when the faa is ok. amazon came prepared when they first came out with this. they had a lot of q and a available for people to read. they make it very clear, they think things will be figured out by the faa by 2015, which would allow them to roll this out. they are saying 2015. maybe that is the timeframe to watch for. >> i'm a little skeptical about what he 15. we will be watching. jon erlichman, thank you. thank you all for watching this edition of bloomberg west.

we will see later. .- we will see you later ♪ ♪

>> from bloomberg world headquarters in new york, i'm mark crumpton. this is bottom line. today, carl icahn tells bloomberg television the real reason behind his truce with ebay. g7 finance ministers meet to discuss ukraine eight. stephen cole bear is replacing david letterman as host of cbs's late show. bert.ephen col to our viewers here in the u.s. and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making hene