>> live from pier 3 in san francisco, west to "bloomberg west" where we cover innovation, technology and future of business. i'm emily chang. ahead on "bloomberg west" this hour, commerce giant alibaba is facing new questions about whether it's done enough due diligence on its recent acquisition spree, this after possible accounting turned up at one of its purchases, alibaba pictures. the recent disclosure means the upcoming i.p.o. could face additional scrutiny from u.s. regulators, though not likely to delay the i.p.o. the i.p.o. road show may start september 3. apple's china challenge could get tougher after china mobile,

the world's largest carrier, will cut phone subsidies by $2 billion after the government told it to lower marketing expenses. lack of subsidies may make it harder to sell high-end phones in china. it can also give a surging boost to competitors. the latest trends in tech are winding up in the dictionary. words like netflix-inspired binge watching, live tweeting, sub tweet, buzzfeed have been added to the oxford online dictionary but they're not in the official dictionary as of yet. to our lead story, alibaba group has been on an acquisition free in the run-up to the i.p.o. but now there are concerns about one of its deals. a film company alibaba took a controlling stake in chinese media group, now known as alibaba pictures, has uncovered possible accounting flaws. the unit may not have made enough write-downs for some

assets in the first half of the year, according to a filing. alibaba has tape stakes in more than a dozen companies this year. they range from video sites to the singapore postal service. will these accounting issues raise red flags for investors? is alibaba acquiring too much too fast without enough due diligence? joining me here in the studio is former google china executive crid yu and our contributing editor, a former equity analyst also. you did deal in china. did you ever do a deal in 15 minutes? they were saying they were on the phone 15 minutes nailing this deal down and then it was done. >> 15 minutes is -- it's unfortunate but fortunate in the sense in the west we always thought chinese businesses are a bit -- and we were watching and finally had a hiccup. if you're acquiring at a pace alibaba has, you're bound to hit a speed bump. >> is it too fast?

>> too fast compared to what? they had an ambitious strategy, as you said. in the first half of the year talking about it earlier this year they spent $4 billion and that pace continued. i think they have a deliberate strategy to place a bunch of bets through their i.p.o. and don't think they will slow down. i think they will be more careful. >> paul, as a former equity analyst with the i.p.o. approaching, does this raise a red flag? >> yeah, i think it does. it's pretty unavoidable. the pace of acquisitions. i understand the strategic intent here but doing $10 billion of acquisitions in the first 6 months is always going to make you nervous that there are always that will fall through the cracks with respect to due diligence. that's what we are seeing. granted, this is a small scale. these are not hugely material numbers in terms of the company's balance sheet or income but more of a notion that where there's one there may be

more so the worry here has to be what other issues have escaped attention with respect to diligence? and then the question y. is that the case? that's the case because of the whole structure of this company, which has been the fundamental red flag that i think made investors justifiably nervous from the beginning. the notion of the various interest entities and entire structure that allows you to push things through quickly, right down to appointing directors doing deals. >> should investors be nervous, chris? >> i think investors should think about what this really means. we talked about alibaba's i.p.o., most of this was around the commerce business. a lot of these belts are what we call option values or t.d. value in the longer term. as an analyst mentioned, it's probably is not going to be that material to these acquisitions alone to alibaba's balance sheet and income. now the question, of course, would be a different matter if there's something wrong with the core business it's not disclosed. >> what about the breadth of these acquisitions? we're not just talking about quantity but companies ranging

from pharmaceutical data companies to department stores. how would you advice investors given the just wide variety of companies they have their hand in now? >> yeah, a long history of companies in technology that tried to put together conglomerates continue almost never works. it's hard to believe this will be the one that finally does. i understand the argument with respect to optionality but from analyst standpoint, we're always worried about positive and nation optionality, right? there are things that represent co-options but things that potentially represent put options. if you have such a diverse range of acquisitions done very, very quickly, there's always high risk of material, negative optionality in here and especially when you look across incredibly diverse set of acquisitions. it makes me much more nervous. i hear this all the time from institutions looking at the i.p.o. >> craig, you actually know a little bit about alibaba's m & a team. they're very active.

how do they actually work? >> i don't actually know them personally but they're active in the valley especially in the last three, four months and have entertain a big stake in kabam, a gaming company based in san francisco. taken a big stake in django and said to be in talks with snapchat. hundreds of millions of investments. >> we reported those talks stalled? >> as far as we know they have stalled. we don't know if they reached conclusion or decided to walk away. i think -- i absolutely agree that investors, there's downside risk in the sense that you could place all of these bets and even if it weren't due diligence problems, how do you execute on something this broad? i still believe i'm quite bullish on alibaba, i have to say. if you stream these investments together, they do make sense. they're about mobile. they're about commerce and they're about engaging users. and that's where alibaba is going. >> take a look at the big picture, paul. how bullish are you?

this is on track to be potentially the largest i.p.o. in history. not largest tech i.p.o., the largest i.p.o. in history. >> i'm -- what comes after wildly nervous? i'm that. this is a real dangerous i.p.o. in many ways. it's unprecedented in terms of its size, scope, unusual corporate structure. some sort of governance arbitrage going on across jurisdictions. so many things and then you see small red flags beginning to accumulate. i applaud innovation and applaud entrepreneurship but as investment vehicle, whatever i said, whatever is after wildly nervous, that's me. >> bullish to wildly nervous, we have both sides. craig, you and stick around. we have more after the break. and could this special trouble for apple and samsung? and who stands to win from the cut? we discuss next. >> welcome back to "bloomberg

west." i'm emily chang. china mobile, world's largest wireless carrier, is cutting $2 billion in smart phone subsidies. this would impact higher-end phones like apple's iphone and samsung's galaxy line and came after the chinese government told three major carriers to lower marketing expenses. who stands to win from these cuts? still with me former google china executive crid yu and contributor paul. how bad is this for news from samsung and apple? >> i'm kind of torn on the superficial and say it has to be bad news.

something like 50%, 60% of phones sold in the chinese market are sold with subsidy and that goes, obviously, the more expensive phones in which samsung and apple make up a disproportionate share. on the other hand one of those sell into an affluent customer. so i think it's untested how much of a different subsidy reduction will make when you're already selling an expensive phone to affluent customer in china. so i think it will have some difference. i'm just not convinced it will be as dramatic as some are making it out to be. >> greg, what would you say, how big a win is it for the lower cost guys like low november -- lenovo? >> i think it's interesting because this came as a great quarter for lenovo. they have overtaken samsung the last quarter and in the top five or so. everybody below them are local manufacturers so i think this

will probably accelerate how quickly mid-end and domestic chinese suppliers are doing. xiaomi, nothing even not to lose but everything to gain. they sell all of their phones direct. this could only help them. >> apple thought for years to be sold by china mobile. it just happened like six months ago. this is something they have been working hard on, relationship with the chinese government and now this. >> now this and the flip side is the chinese government has been up front they want the new iphone product whenever they're launched in september to be available immediately in china. it hasn't changed, china mobile's emphasis on iphone products. so i think this is a question of it's kind of economic price elasticity. how much of a difference will it make with respect to uptake of the product when you have change in the price and selling to affluent customer. history tells us not that much, less than you might think but it will benefit lower-end customer no matter what happens. >> apple also now storing user data on servers in china, which

is sort of unorthodox for a u.s. tech company. this is part of the reason u.s. technology companies have had so much trouble breaking into china. crid, what do you make of that? >> i think it will be very interesting. in terms of apple's position, the good news is for apple is they are not even in the top five. so they're really a niche player in china. i think the fact they put servers in china means they're more committed to being a chinese player and we will see how that bears out. it could be interesting. >> i wonder paul, will we see other u.s. tech companies playing by the chinese government rules to get their foot in the door? >> you know what, it's brutally clear whether you can look back over the last three, four sort of food fights people had with the chinese government in the end you're sort of forced to do something because it's becoming such a disproportionate share of so many tech companies business, whether you're selling wireless

chips or handsets or anything else. you're kind of increasingly forced to play ball, which is further emboldening the chinese government to do more, which is a nasty cycle to be in. >> i wonder speaking about samsung specifically, we have been talking about the market shares slipping worldwide. obviously apple struggled in china. samsung's been also sort of challenged by the lower-end players. just came out with a new stealth galaxy alpha phone. again, their strategy is try to reach everyone from low to high. is that the wrong strategy in china? >> it's hard to say. i think they're certainly under siege on all fronts and that's something that's played out over the last four quarters or so. remember the name nokia. and this was i think everybody is wondering about. i have to believe samsung has shown has been nimble in the chinese market and can adapt quickly. we would love to see some public shoring up of the mid-end business. let's see what happens on the

high end. they're i think quite vulnerable. >> paul, how much does samsung have to worry? >> a lot. i think they have really very little brand halo in terms of being able to support a higher price. that's one of the things apple has working for it around the world but in china in particular, it seems a luxury product where samsung is not. they will always face price pressures and branding pressures. we will see that more and more as subsidies come out of the business. >> all right, paul kedrosky, contributing editor and crid yu, thank you both. speaking of samsung and apple, could synthetic sapphire even the answer to smart phone screens cracking? we will be next with material moves on "bloomberg west." >> welcome back to "bloomberg

west." i'm emily chang. apple wants the strongest, most scratch-proof glass for aye phones so it is looking at one of the most durable materials on the planet for inspiration. sapphires. apple has invested $7 million to produce its own synthetic sapphire screens in collaboration with g.t. advanced technologies and we may see this saphire glass used to the large screens of the two new iphones releasing in september -- unveiled at least. the vice president ryan black joins me in the studio with more. this is not like the jewel crushed up. >> that's right. >> synthetically produced sapphire. will it really be that much better than gorilla glass? >> i think it has the potential to be. one of the strongest materials out there. this would be kind of classic apple move to use a different

material that really only they have access to and this level of quantity to differentiate their products from everybody else. >> i guess i said 7 million but it's 700 million they're investing in this collaboration. gorilla glass actually came about on a mass scale because steve jobs wanted it in the iphone. >> that's right. >> now apple is potentially raising the bar. but it's going to add costs and it could potentially add weight to the phone, right? >> potentially. it is a little more dense. i doubt it will be an amount of weight that will be noticeable to any normal user. it might show up on a scale. but when you have a screen substance that's actually much more durable than gorilla glass, you might be able to make it thinner as well. you could counteract with that weight. this is textbook apple. corner the market on samsung's flash memory for years. they have done the same thing with sony's cameras. they have the best cameras.

bought a company to create the touch i.d. system. so any time they can create a technological or materials for their phone, they're going to go after it. >> i can't tell you how many iphone screens i'm cracked so i'm very excited about any advancement in this technology. corning, which produces gorilla glass said gorilla glass actually out-performs sapphire glass. there's a question of how it will perform in the real world, right? sapphire glass. >> if i was corning, i would probably be saying the same thing right now. >> would you be worried? >> i'm not too worried about it. i think apple is going to make that move. they will do so for a reason. and i think if we're talking about pure sapphire versus gorilla glass maybe but there's no reason to believe sapphire can't be treated with additional substances to make up for some of the disadvantages it may have. >> sapphire, as i understand it, they use it in the camera lens -- >> yes. >> -- for the iphone. it's also used in plane windows

and armored vehicles. that's pretty cool. >> yeah, no question it's probably going to add cost to the phone. but will it be worth it? will it create a customer experience that's better? if you think about what a phone is made up of, if there's one thing on the entire phone you literally cannot have broken or cracked, it's the screen. the case can be a little banged up, the camera can be damaged too. that would suck. but the screen really needs to be in good shape if you're going to have a working, operational phone. so this being a focus for apple makes a lot of sense. >> what about the reflection? it's been said sapphire might be more reflective than gorilla glass and gorilla glass does more to absorb or bounce off the light? >> again, i think it's possible for sapphire to be treated. we have seen different kinds of coatings supplied to different phone materials, anti-glare. i think they can do the same thing with sapphire with glare issues. >> how excited are you about the

two new iphones, larger aye phones? >> i'm all excited for the iphones like any nerd. i'm really looking forward to it. i'm not entirely sure it will be two different sizes. small, medium and large. i think a few too many choices. i think just a regular size iphone and larger iphone might make a little more sense. when think about all of the different skews apple has to manage because they have different carriers, different sizes, different colors. one iphone is actually 30 to 40 skews. you talk about that in three different sizes now you're talking about 120-plus skews. that's a lot of product to manage. so i think if i'm going to just take a guess here, i say they will introduce one new model and not two. >> 4.2 inches? >> something close to 5 inches. >> 5 1/2 too big? >> that's kind of ridiculous. >> yes, that's established. we were talking yesterday about samsung galaxy alpha, a new phone they sort of released stealthily.

there wasn't a lot of fanfare. it has a metal casing. it looks a little bit more flagship but the specs are not as good as samsung galaxy. but we are seeing, again, -- are we seeing samsung just throwing a bunch of stuff at the wall to see what sticks or does this make sense? >> samsung's strategy, always been their strategy. that's why they're in every industry in the universe. they have the means to throw products out there and try things and see what works for them. i think they're probably not only feeling threatened by apple at the top end of the market but xiaomi at the mid-to low end. i think they will be trying a lot of different things. who knows how much will work out for them? >> do we think we will see a strategy shift from them? there were reports the head of mobile is under pressure now given all of the market share they lost worldwide. >> i think it's extremely likely we will see them try to regroup on this stuff. reality is as long as they're not in control of their own destiny and google is with

android, they will have a hard time differentiating. this is the same play we saw in the pc space for many years. another comedy play and have to be the biggest one now but they have real work to do if they want to be able to properly differentiate. >> aol vice president of product ryan block, as always thank you for stopping by. >> thank you. >> are sharks biting and damaging underwater fiber optic cables? that's one google product -- that's what one google product manager says. we will look at why and what the search giant plan to prevent sharknados attacking the internet. let's take a look at on the

markets. boost innce seem to energy prices and stock. the s&p rising 1.2%.

>> you're watching "bloomberg west," where we focus on technology and future of business. i'm emily chang. the online version of the oxford dictionary is getting an update to keep up with current technology. the new tech-related words getting an entry include binge watch, catfish, which means presenting a false identity online, cord-cutter, docs, referring to gathering and publishing private information, listicle and subtweet. these are going into the online dictionary only and will not be included in the official oxford english dictionary. does that mean you can't use them on scrabble? don't know. we will have to look into that. everyone is doing it 23r your

friends, family to celebrities, politicians and top tech c.e.o.'s. yes, we're talking about the ice bucket challenge, a viral campaign raising awareness and millions in donations for a.l.s., also known as lou gehrig's disease. the premise is get iced dumped on your head and challenge others and they complete icy challenge and/or make the donation to the national a.l.s. association. take a look at the t-mobile getting iced. john ledger there of t-mobile. >> one, two, three! [applause] >> now nadella sent the challenge to other tech giants including jeff bezos, c.e.o. larry page. we will be watching to see if they accept. here now on how the viral sensation happened. the chief marketing officer for the a.l.s. association joins us from washington.

carrie, watching the success of this campaign, just the viral nature of it, has been pretty incredible. how pleased with you are -- with -- how pleased are you with the success of this? >> oh, it's just been amazing and we're so incredibly thankful for the tremendous outpouring of support, literally outpouring of support from people across the country. >> so tell us a little bit how this got started. obviously, it's an incredibly important cause and disease that's not well researched and not necessarily well known. >> no, it really got started -- i wish i could say i was the p.r. genius behind it but it really got started by families and individuals in boston and new york and who two of them have the disease, pat quinn and pete frates. pete is a 29-year-old and he and his families really got things going and took it viral in massachusetts. so last week, in the middle of boston common. this week all over the country. >> where did they come up with

the idea? >> that's a good question. i'm not sure. >> that's a good story. we will have to investigate that one. >> definitely. >> how much money have you raised total? >> the a.l.s. association received $9.5 million as of this morning. and that's compared to about $1.5 million of donations during the same time period last year. we really started noticing an uptick july 29th and from there it's grown every single day until the $9.5 million we have today. >> so the way it works is that if you do the ice bucket challenge, technically, you don't have to donate money. is that a little counterintuitive? >> you know, i think the numbers speak for themselves because i think people are doing, taking the challenge, challenging others to dump ice on their head or donate. but what people are doing is dumping ice on their head and

donating, which really says a lot about the commitment people have towards this exciting campaign. >> and some people have said, why -- why pay money for ice? you can just give that money to the a.l.s. association. how do you respond to that? >> you know, the monetary contributions are so incredibly valuable to all of the a.l.s. charities in this country. but what's incredibly valuable as well as visibility this generated for a disease prior to this week and prior to last week only half the american public even knew what it was. so we're just so incredibly grateful because awareness is such a big hurdle in finding treatments and cure for the disease. >> so someone very, very special to me suffered from and died from a.l.s. and the process was -- was so fast. can you give us an update on where research stands when it comes to a cure or treatment for a.l.s.? >> research has never been more promising when it comes to a.l.s. and there's more breakthroughs

in the last 20 years than ever before in the history of the disease, back to the late 1800's, when it was first really identified. and, of course, we just celebrated or rather recognized the 75th anniversary of lou gehrig's famous farewell speech. that awareness moment was really significant but this -- the awareness this is generating in 2014 i think people will be looking back on this as -- looking back on this as a long time real game-changer in the process towards finding treatments and cure. >> exactly where is the money going? i know there are various clinical trials, there are some experimental drugs out there. how are you guys actually using this money? >> we have a three-prong mission at the a.l.s. association. research is an incredibly important part of our organization now. right now we're funding 98 active research projects across the globe. last week we announced 3.5 million in added funding so

we're really excited what this means for the a.l.s. association to move research forward. we're also very active in care services and working with patients and their families to ensure very best multidisciplinary care. and then we also have robust public policy effort in advocating for change on capitol hill and in states across the country. >> you know, there have been other incidents of charities starting sort of viral marketing campaigns, no makeup selfies which i believe the proceeds went to cancer research. but what do other charities and other companies have to learn from what you guys have created here? >> i think one of the reason whys this campaign was so successful was because it started so organically. there was no one organization, no one corporation behind it. i'm not sure why even a company or nonprofit had all of the p.r. dollars in the world to invest in creating a campaign like this that, that could ever again happen.

>> so i know oprah accepted the challenge but she hasn't done it yet. who else -- who is your dream celebrity, dream person out there that you would like to see do this? >> don't know who my dream celebrity is but i was tickled to learn ronald mcdonald took the ice bucket challenge this afternoon. >> all right, we will be watching. it certainly seems to be -- continuing on, not losing steam at all. carrie martin munk from the a.l.s. association, thank you so much for joining us. >> thank you. >> and good luck. the discovery channel isn't the only company focused on sharks this week. when we return, we will tell you why google is on high alert for shark attacks. ♪ >> you're watching "bloomberg

west." i'm emily chang. do tech companies have to worry about sharks attacking underwater cables that connect the internet around the world? a google product manager recently said the company is going through great lengths to protect its infrastructure, including wrapping its transpacific underwater cables in kevlar to prevent shark attacks. reports of sharks attacking underwater cables actually date back decades to the 1980's but is it really a problem that can impact our internet access? joining us from washington, d.c. is tim strong, vice president of research at telegeography, which collects data and research on the global telecom industry. so, tim, i mean what a way to end shark week. a story about sharks attacking the internet.

how big a problem is this? >> it is shark week and i hate to be a downer but to be honest with you, sharks are not a major problem for the undersea fiber optic cable industry. there are over 300 fiber optic cables laid on the ocean floor today and more being built. in the last 25 years from the research i have seen, there have been only three documented cases of fish bite of any kind on a cable. now, there was a famous case in 1987 of a cable being outright destroyed at one point by sharks. they found shark teeth in the cable. but since then, it really hasn't been a major issue. >> what is it that attracts sharks or fish to these cables? i read something about an electromagnetic field around the cables could potentially be attractive to them? >> that was the supposition. now a lot of fiber optic cables, especially really long ones, are not just transmitting pulses of life but electricity.

the electricity is used to power equipment along the cable. and it was thought that electromagnetic pulsing was attracting sharks and i recall that they did a lot of testing to try to replicate that problem. from what i recall, they weren't really able to replicate it. so it's still a bit of a mystery, what happened there. we know sharks did attack at one point. but cables are armored now to help partially to help prevent against fish bites but there are a lot of other dangers under the sea to some marine cables. >> what are some of the other dangers? tell us about those. >> well, human activity is the largest danger by far. over two-thirds of all underwater fiber optic cable breaks are due to shipping and especially fishing. fishing nets and trollers or scrapers that go along the ocean floor pulling up food for us to

eat do and can break fiber optic cables. so that's a major issue. other problems due to mother nature are not so much to fish but things like earthquakes, even icebergs occasionally will scour the ocean floor and even volcanic activity can be a concern. but generally it's fishing and shipping that are the problems. >> we were just looking at a map, this network of cables around the world. how do they actually work? how much of these cables does google own and apple? how does it all break down? >> google owns a handful. i should say co-owns a handful of cables. they purchased capacity over bandwidth on these cables. google itself has not -- it doesn't manufacture submarine cables and it doesn't outright own any cables that aim aware of. instead it goes into other partners with the internet and telecom markets to co-invest in cables.

there are over 300 cables now. google is just one owner of them. but about probably 99% of intercontinental communications happens over undersea fiber optic cables, not satellites as a lot of people think. >> and these disruptions when they do happen can be quite jarring. i remember once when i was living in china, i believe a cable across the pacific ocean was somehow damaged and took out the internet for several hours. >> it can be a problem, especially for countries that have access to only one or two cables. personally, we in the united states are very lucky. we have connections to several dozen cables. and as a result we never even hear about these cable breaks, even though they happen quite a bit. there are about 100 to 150 cable breaks every year so that's a couple of week on average. in the united states we're not affected because if one cable

fails, the i.s.p. that's running over that cable has fail over to other submarine cables. >> despite what you say, tim, sharks are attacking underwater cables and internet. i'm sticking to my story. tim strong, vice president of research at telegeography. thank you very much for breaking it down for us. first amazon took on disney by cutting off orders of new disney films like "captain america" and now it's walmart cashing in on the e-commerce battle. details on that next on "bloomberg west." ♪ >> welcome back to "bloomberg

west," i'm emily chang. walmart is observing a 40% discount on preorders of disney d.v.d.'s, including titles like "captain america," "the winter soldier" and maleficent. this after disney cut off orders of these films because the e-commerce giant wants disney to slash its prices. is the feud walmart's gain? back with us, former equity analyst and partner at s.k. ventures. so paul, how much is walmart going to profit off this?

>> you know, they're going to profit off it, obviously. it's great publicity for them. we're talking about it and they're offering a big discount and amazon's not doing it. the thing i think is more interesting, i was checking before i came in, looking at the latest list, torrent list to see when the latest movies to torrent are when none of us would torrent movies but guess where "captain america" is this week straight from nowhere? number one, of course. people are benefiting are walmart. but this is emblematic of the great change in how movies get distributed. people find a way. like jurassic park, nature finds a way. it's showing up in torrents and walmart. >> you wonder is disney thinking about this? if they don't compromise and make it more widely available, it actually hurts them, doesn't it? >> no, it does. to a point, most motion picture companies and entertainment companies, hbo will say a little

bit of piracy helps them or a little bit of other distribution helps them because it gives them broader distribution and then to a point. and that point can be reached quickly. so i think we're already at that point where you need to think about if they're not pushing it through amazon, how are they going to become more effective distributing their own product through their own website or over over-the-top digital services? right now the market is finding a way. it's going to amazon and buying these little 3 1/2-inch skinny things called d.v.d.'s that apparently still exist and other people who are going on to bit torrenting sites and picking up movies that way. you can't freeze the market and i think that's the lesson. >> i actually just bought a "lion king" d.v.d. and it wasn't streaming anywhere and i'm still very upset about it. my question is, who has the most power, content companies or amazon? in the end, it is about price but it is also about convenience. >> it is but weirdly, even though everyone is trying to in

a sense show how much power they have, people who have the most power are consumers because they finally have alternatives. it's not like if i can't find it at tower records, i'm done for because there's nowhere else to get it. amazon tries to lock them out at distribution and shows up on walmart. walmart decided enough of this. i'm not going to play this game anymore or disney decides that, it will show up in other places. weirdly enough, it's consumers that have a lot more power that ever did and able to exercise it in ways that may or may not be beneficial to the company. this is the purest victory amazon is having here. >> how do you see disputes playing out with amazon? first disney and also warner home video and hackett book publishing. who will win, other than consumers? >> other than consumers. we're doing great. so i think amazon, i think amazon weirdly enough, the market for digital products is increasingly sort of monopolistic. going towards small number of

distributers so amazon in the end has so much market power over distribution, it's really difficult to see how it doesn't come out as a winner. the difference will be, it will not be seen as sort of clean consumer friendly company. it's being a real bully here and exercising bully tactics. so i think it's tainted for quite a while but it will win in a sense it eventually will get what it wants. >> is it going to get what it wants everywhere in all sort of forms of retail? >> no, i don't think it will because it's not going to be a powerful in all forms of retail. physical goods through amazon will always be fighting uphill battle but digital products, movies and music are and books, it's dominant and going to do that to pint. don't think they're going to take that into other markets and have the same influence. they should treasure their victory while they have it. it's not -- they're not going to be able to take it into other markets at all. >> paul, it's time for the b-west byte. the number that tells a whole lot.

the bar is very high for friday byte. what do you got for me? >> too much pressure. i think i will not give you anything now. no, i was going to go with 10. the $10 billion number we were talking about alibaba, which blows my mind in terms of the pace of acquisitions and size of acquisitions the company did in the first six months of the year leading up to the i.p.o. with some of the consequences we are seeing today. i think it's a remarkable number and we will be revisiting it frequently post alibaba at ventures come unraveled. >> is alibaba like any other company we have seen list in the u.s. before are or there precedents? >> no, don't think there are. i was spending time last week looking into this trying to find examples of companies of the same scope that are so diverse in terms of their holdings in technology. essentially look like the old 1960's style holding companies that used to exist and all got blown to pieces in the '70's as we did all of these

divestitures. both in terms of scope and size, there's nothing like it and in particular having so much come together so quickly in six months over what we're apparently in many cases very short conversations over coffee is just unprecedented. i can't imagine how it ends well. god bless them if they can. i just don't see how that happens. >> i know you said you're wildly nervous about it. you say it won't end well. but in the first day of trading, are they going to raise as much money as people are expecting them to. is it going to be the biggest i.p.o. in history? >> oh, i think it will just because there's so much market support around the world of this particular i.p.o. in terms of its size and reputation. so buyers from everywhere will support it. but it won't take long afterwards if we have more revelations of costs that were not properly written down and all of those kinds of things. >> paul, it was a pretty good byte, pretty good friday byte. i will take it. >> thanks.

>> especially because it's friday. thank you paul and thank you all for watching. happy friday. have a great weekend. ♪ >> tonight on "titans at the

table," i traveled to what many consider the las vegas of the east. macau. this is part of what attracts people here, right? >> yeah. >> the small territory on the south of the chinese coast raked in $45 billion of revenue last year. more than seven times that of vegas. >> did you ever think macau would surpass las vegas by that much? >> it makes perfect sense. the resorts in macau are world-class compared to las vegas. macau has taken off. >> we are talking about the next generation of people from china