>> live from pier three in san francisco, welcome to "bloomberg west does quote where we cover innovation, technology and the future of business. ,etflix arrives in france germany, and for other european countries as part of a major international expansion. while netflix says it will be profitable in europe than a decade, they will encounter a market much different than that of the united states. we will look at whether netflix can succeed in europe. the fcc will consider an issue today as they hold a special discussion on the issue coming after the fcc received a record

raking 3 million comments on his proposal to allow internet asked lanes. thiele capitalist, peter says a company he's founded is key to stopping terror attacks. how exactly does it work question mark we will look at the technology behind the company and whether it can get into the wrong hands. netflix our lead -- targets europe home hoping original content and its library of shows will convince europeans to fork over eight euros a month. new are expanding into six countries this week including germany and france. reed hastings spoke to bloomberg last night at the launch party in paris. is our biggest international launch ever. we launched three years ago in the u.k. and a year ago in the netherlands.

we are excited to be here in france and germany and what a reception. there has been so much excitement about netflix year. a numberope, they face of rivals including amazon and free tv channels all stop netflix announced a new original "love." fors called more on all things netflix, i'm joined by the managing director of wedbush in los angeles. this is the biggest international launch ever for netflix but it's the most risky. how so? whacks it's the biggest because the territories are expanding into our about half the population of the u.s. this is a giant step for them and they've managed everywhere pretty well except japan. i'd think -- except for latin america.

i think they will have some success here and it's risky because culturally france and germany are a bit of friend dan the u.k. where they have had a ton of success. those countries are a lot more like us and the content translates quite well. i remember an article about how "seinfeld" failed in germany because they did not write it funny. netflix will have a challenge and they are probably up to it because it will resonate with the audience. elsewhere,ucceeded so my expectation is they will ultimately succeed in france and germany. they are dubbing over some of their popular series and they prefer that and are developing some original content geared audience over there. >> we are doing both.

we live a -- we are licensing local content and developing local content and we are frenchioning a series in set in the political context and we have our original content here in france also. >> they've also got the rights to some of the most popular , which theyseries actually don't have here in the united states. does a french or german audience want to watch? not mention he did was "house of cards" because they'd don't have the rights to that in france. it's one of the signs that they'd don't necessarily own any of its original. youru remember back to childhood, there is a famous comedian named jerry lewis. his movies were immensely

popular in france and none of us could figure out why. but french culture is a little different. netflix's originals have been very good so far. he mentioned is thethem -- "orange new black" is my favorite. i imagine they will develop three or four for the french market and three or four for the german market but that's not that many hours of programming. they will either thrive or fail based on their ability to take the series that works the best. some of these theater -- some of the shows like big bang theory will resonate in western europe isl stop i estimate netflix going to do just fine. >> let's talk about how they will survive in the long term. let's talk about when the company will be profitable -- it's not anytime soon. >> it will be challenging to be profitable. we have a lot of content and we keep getting more and more

content. in the long term, if we go five or 10 years, we should be profitable. signed judd apatow to produce a new series. he is really expensive i imagine. >> i am famous for having downgraded netflix to sl about three years ago. it was pretty clear to me that it would take them many years to be profitable in this international expansion. investors don't seem to care. it has concerned me for three years but hasn't concerned netflix investors ever. arestors don't care if they profitable. they're not going to be profitable for at least five years. don'tk investors just care. they expect netflix to dominate the globe and they probably will dominate the globe in terms of streaming service and be well positioned to raise prices, which is what they will have to

do. i think netflix is going to be a very profitable company, just a slow growth company. investors seem to think they will be a high-growth and profitable company. i think those things are inconsistent. doubt investors will actually see what they expect, but i have been wrong for three years and i am per pair to be wrong again. whacks you have mentioned that orange is the new black is one of your favorite shows. we got caught up with one of the actors on the show. >> what i love about netflix is the programming is so fresh. and as an audience member, you can watch it whenever you want will stop i appreciate that freedom myself is giving> that viewers this kind of freedom.

the competition? what are the biggest challenges coming for netflix down the pike? programming side, hbo is a formidable competitor. upstarts an upstart -- one of the. they've got the balance sheet to pull this off as well. hite two guys are going to up the cost of new content. that is what reid was talking about, signing new deals that ever increasing prices. content creators have a lot of options. you see edge year content on cable with shows like "walking bad." thatbreaking is edgier than what we normally see on broadcast television. i think they're finding many bidders for their content. , becausex pays more

there's a lot of competition for the content, i still think we win as consumers. we get a lot of great content and we get it when we want it all stop that is valuable to a lot of people. " on netflix isns one of my favorites. great to have you. raises itsalibaba $68 ange from $66 to share. what does it say about their valuation strategy? and we hear from tim cook about the role steve jobs played in getting him to join the company. you can watch us streaming on r tablet, and at bloomberg.com. ♪

>> i'm emily chang and this is

"bloomberg west." a battle to control russia's was popular social network has ended. the stake owned by capital partners has been bought out for $1.5 million. the two sides have agreed to drop all litigation. from one of russia's biggest tech companies to china's largest tech company -- just a few days to go until ali baba starts trading and what could become the largest ipo in history. but with the company boosting its offering to $28 billion, is it still offering investors a better bang for their buck than some other options out there? to otherit compare publicly traded chinese internet companies? think of them

raising the price? >> low and too low end, they've raised their price by 10%. that suggests demand. there is a significant amount of demand. ma and his team talking to the complexities of this company. they like the story, there is demand, now ali baba is going to try to capitalize on that. >> much has been made of alibaba having a price to earnings ratio lower than its chinese competitors. what does that? a better buy? >> it could be right now, but you have to get into the story and get comfortable with the governance around what jack ma is trying to do. ownership a complex structure and this yahoo! situation out there, but it is

pretty much known what they will likely do with their shares. the biggest issue is you've got this malcolm of google, some amazon and some paypal in their and you have to get comfortable with what that is. that understanding is maybe depressing some of the expectations right now. they may not understand it. how many people have the ability andit down with jack ma have the clout to sit down with him and understand the different governance structure and what this company is going forward. ask there is no clear parallel to american technology companies. google, and paypal thrown in there. >> we have never seen one of these before. it is big and doesn't look like any other fish we have seen. that makes me wonder about the consumer going forward.

are they going to understand what they are buying and and -- and are they going to see and compare and there got what they are seeing with other companies out there? , what could it potentially look like six months or a year out? >> we have asked you about the new iphone and they are not selling them in china yet. reports are they are delayed in china until next year. >> is a lot of speculation, but if you look at what is out there, it seems like it could be related to subsidies and the pullbacks in subsidies we have seen. it is going to be an expensive device, so there may be concern on the carriers part or the governments part on how much it's going to get subsidized. >> china mobile already started selling the phones. asked the government step in. -- >> thenother issue

government stepped in. they have been making way with beautiful designs and big screens which is what apple is showing up with, so is this a situation where the chinese companies are getting a little more runway in order to get some breathing room before the iphone hits the streets. >> china has been a huge market for apple and its only getting bigger. could this hurt apple? so. don't think apple will get their fair share of china. those people who have bought into the apple platform in china will get their product, they just might have to wait a little longer. >> inc. you, as always -- thank you, as always first shop -- for stopping by. coming up, what does the future of apple design look like customer we will hear from the ceo, tim cook, himself when we return. ♪

>> welcome back. germany's nationwide band on uber has been tossed out my frankfurt court. while they say the service dilates the law, they had done it under illegal procedures. er is still operating in germany even with a previous ruling. the fcc will begin discussions today to consider expanding that neutrality rules to mobile rock band. internetith the open rules proposed in may and received a record 3 million public comments. now regulators look to acquire these rules for regular carriers as well. of "big bang

disruption" joins me now from washington. you have been at the round tables all day today and you're going back after you speak with us. give us a window into how the discussion is going and what is actually happening in the room. >> chairman tom wheeler is sitting in the room taking notes will stop these are the kinds of discussions where they are briefing the staff, mostly going through some of the comments they filed. we talked about the scope of the rules and the need for the rules, and they are talking about the transparency role. then we will be talking about mobile broadband. >> is the tide going in one direction or another? >> i would not they that will stop the bulk of the comments -- many were auto sent to various spam bots, but they really just told them to save the open internet. none of the experts are in favor of ending the open internet.

the question is how the fcc does it and to what extent their rule should apply and to what extent does congress get involved and to what extent do we leave it to the market? >> should the rules cover mobile broadband question mark if we are using the internet, should it matter? >> there's a difference. the last time around, the 2010 rules exempted mobile services from some of the rules. that is what the fcc is this 2014to do in version after the court throughout the 2010 rules. mobile is very different. the capacity of mobile networks is constrained by two key inputs -- one is spectrum and the other is towers and other infrastructure. those are the two inputs completely at the mercy of , and so far, allow since 2010, we've had a 700% increase in mobile traffic, but

the fcc has been unable to provide significant amount of new spectrum and local authorities are camping up their resistance to new towers and antennas and other new equipment that would give mobile operators the kind of flexibility wired operators half. >> what does this mean for me? what does it mean for companies like google and netflix? >> it shouldn't mean anything for you. open internetese rules didn't exist before 2010. the court threw them out before they went into effect. the rules didn't matter how particularly in terms of how it's happening and what services are offered. is a lot of competition for more consumers. you see fears competition among

wireless carriers over service, terms and devices. for most and simmers, these rules played no part in how the networks are being deployed and probably won't have much of an impact regardless of what the fcc does this time around. >> in terms of the timeline, how do you see this laying out? when is there going to be a decision? >> there is no official timeline. these roundtables are going to continue this weekend throughout next month and then go into private mode where they will deliberate and go through the comments and the real ones as opposed to the fake ones. there will be a lot of among theg commissioners and they may come back later in the fall asking specific weston. if there are certain things in the record not clear enough to them, they will ultimately take a vote.

any indication, it won't happen until the end of the year, maybe into 2013. back tol let you get those roundtables in washington dc. thank you for taking the time to join us. hold ther peter thiel key to stop the next terror attack? we will talk to him about the company he cofounded, next. >> it is 26 minutes after the hour which means bloomberg tv is on the markets. let's get you caught up on where stocks are trading as you head into the afternoon. and theup now by .8% two thirds of 1% -- a big pop in energy stocks will stop one stock we are keeping our eye on today after an appeals court says this company will get less than the $400 million infringement verdict --

shares down 49% will stop the court has ordered a new trial that will rule on whether face time infringed on their patents. more "bloomberg west" after the break. ♪

>> you are watching "bloomberg west" where we focus on technology and the future of business. with president obama launching an offensive to take on the islamic state and terry stotts technology be the key to stopping the next attack? founded ater thiel company called palantir. i spoke to him about whether it could stop the next 9/11. >> do you think palantir could stop the next 9/11 or has it

already? >> something like palantir is the key. i don't think we are going to do a by projecting military force throughout the world. i think we will do it by cleverly uncovering these conspiracies before they come together. >> some have expressed concern that your client could use palantir to do evil things. do you worry about that? >> there is always a two edged part to these technologies. technologies are never intrinsically good. there's always the question of how they could be used and abused all stop i think there are a lot of checks in place. >> someone described it plugging into the matrix. >> one government agency that gave us a bunch of data -- during the trial, we discovered a terrorist plot they had not suspected and had to reclassify a lot of data. >> would you say palantir has helped to fort harris plotz? >>

i suspect that is true. >> he talks about it in his brand-new book that's out today. you can hear more of my interview with peter thiel and here the interview in its entirety in october. i want to take a deeper look at the technology powering palantir . the company disclosed it raised $50 million last week in its .atest funding round they are backed by the cia's andx -- investment division customers include the defense department, fbi, army, marines, and air force. why are some of the biggest leaders in security partnering with palantir? alex more joins me in the studio. you were the very first client -- very first as the director of the company. what did you do?

>> this was around 2004 and my two smartest friends were working on a secret project. i said i have to be involved in this and that ended up being palantir. what ended up happening that was unique is that peter thiel was willing to work with smart young people. we saw that with facebook and i think that's what it was. a call of the smartest people at stanford. what is the company j? it has changed a lot. >> i think actin was a typical silicon valley startup. we were all basically working in what was the basement of a hospital and it was hiring the smartest friends and beginning to crack the problem. a lot of our folks flying to d.c. every weekend flying back

and it grew at a very fast rate. >> there is so much mystery and secrecy surrounding palantir. why benchmark is part of that is protecting the initial customers. it's a very broad as this and works with the government and large enterprise, but it was that and it was his idea that what we were working on is special and we don't want it to be replicated or cheapened or confused by larger companies that don't have the insight we had. >> it's basically using data on a massive scale to solve things like conspiracies and stop that before they happen and even fight disease. to the terror part, there's a lot of fascination around it. how many terror threats has this company stopped? >> that would be fascinating to know. i'm not sure you can get that specific but i know routinely when i was there and now as the

company gets vigor, you have people from these groups coming in, general heads of division and the government saying we stopped a real event from happening. don'ttypes of attacks happen anymore or we have a handle on them. it's a unique level of confidence that did not exist in 2004 and 2005 when we started. >> do you agree with peter thiel that this could stop the next 9/11? >> i think that's a bold statement, but it gives us a better hand on understanding what's happening in the world, what the trends are, where do we need to focus our energy? at the end of the day, the public has a misconception of how much time and energy the government has. it's very contracted on all of these resources, so palantir helps them focus. that's what data is palantir

mining? is the stuff we would not want them to see? >> this -- that's a very specific question depending on which customer it is. is doingwhat palantir is taking information from different databases and getting them into one interface. it is less about is their specific new data but about getting it into an interface and getting an analyst to work on next play. >> what about the technology getting into the wrong hands? if it is powerful, can people use it to do bad things? >> i'm not sure that's much of a concern. i would love to know what that case study would be. the bad thingsy are what the nsa is doing. some people disagree with that. >> we could talk about edward iswden, but i think palantir on the front of data auditing.

i have an analyst that works on data and it's also tracked, so on able as a manager to say what are my analysts doing? if we had that, maybe we would not have the edward snowden problem and we would be able to understand how we are analyzing it. >> one of the things that is on commercial about peter is that he thinks ceos should not pay themselves too much. he thinks companies should pay employees in equity and i know palantir was once the top spot for stanford graduates, yet they have a salary cap much lower than other silicon valley startups. still attracting the best of brightest? >> i think so. if you get in, that's a sign you're a brilliant engineer. they will transfer people who want to work on early heart problems and believe in the mission. maybe by overpaying, you are bringing in a wider set of people that may or may not be

your company culture. in the long-term, it's an edge for palantir. you know you are not getting the people chasing the short term but people who want to build long-term value. >> palantir asked very first employee, thank you for giving us a window into the early days. while companies like palantir help to counterterrorism, how do does a company like apple help with privacy and security? the answer from the man himself, tim cook, next. ♪

thanks i'm emily chang and this is "bloomberg west." technology is playing a key role in maintaining national security, but revelations about the government and nsa knows about us has led to a public outcry. rose's two of charlie exclusive interview with apple ceo tim cook, cook talks about how apple is looking to maintain a balance of security, freedom and privacy with their customers

will stop >> it's a tough thatce and i don't think the country or the government found the right balance. i think they aired too much on andcollect everything side the president and administration is committed to moving that pendulum back. -- it's you don't want probably not right to not do anything, so i think it is a careful line to walk. you want to make sure you are protecting the american people, but there is no reason to collect information on you. 99.99% of other people. apple also put a strong focus

on product design. take a listen to tim cook describing the future of design apple. >> we are just not making product to sell. does not get me up in the morning. i get up in the morning and many other people get up in the morning to change things. that is who we are as a company. .e may change other things we may become more open and participate in these things we have not done before, but what drives us are making great products that enrich people's lives. >> tim cook joined apple in 1998 room compaq computers. but according to cook, it was --y after steve jobs far fought hard to join the company. >> it was an interesting meeting. i had gotten a call several times from the search people had

employed and i kept saying no. was. happy or thought i .hey were persistent i finally thought i'm going to go take the meeting. steve created the whole industry i'm in, i would love to meet him. so i'm going into the meeting just inking i'm going to meet him. all the sudden, he's talking about his strategy and his vision and what he was doing was going one hundred percent into consumer when everyone else in the industry had decided you couldn't make any money. they were headed to storage, servers and the enterprise. i always thought following the herd was not a good day. you are either going to lose big or lose, but those are the two options. he was doing something totally

different and he told me a little about the design, it have to get me really interested. described to me what would later become the imac. the way he talked and the way the chemistry was in the room, it was just he and i and i could him and ild work with looked at the problems apple had and i thought i can make a contribution here. him, this is the privilege of a lifetime. all of a sudden, i thought i'm doing it. i'm going for it will stop you have this voice in your ear that says go west, young man. i was young at the time, but you the back and try to do things people do with spreadsheets and none of it makes sense. it didn't make sense. and yet, my gut said go for it.

gut will stopmy there was literally no one around me advising me to do it. >> the rest is history. you can watch the full interview on charlie rose tonight on live bertone was met 8:00 and 10:00 p.m. eastern time. it's good to check on some of the other stories making headlines with mark crumpton in new york. >> president obama will announce that the united states will deploy about re-thousand troops to west africa to help fight the ebola outbreak. the troops will arrive at about two weeks and will build medical facilities, train workers, and educate residents. the plan may cost the u.s. more than a billion dollars. the government of french wonident françois hollande a key vote that will allow the government to proceed with its economic land.

the president prosecutable rating has plummeted to 13% as the country deals with a sluggish economy and high unemployment. radisson hotels has suspended with theorship he'll minnesota vikings after running back adrian peterson, already charged with hitting his four-year-old son with a treat wrench was accused of hitting a second son. he -- radisson is the first sponsor to take action following the accusations. >> what is coming up at the top of the hour? that we will have former u.s. trade representative ron kirk. we will be discussing the export-import bank. its charter expires at the end of the month and there is discussion that will be reauthorized but only until next june. some in congress think the bank should be done away with. ask -- >> and i know you will have an interview with columbia's finance minister. if stop by bloomberg world had orders today -- world headquarters today.

he will discuss the country's gross figures which came in lower than expected and discuss a net wealth tax. all of that and more when i see you in just a few minutes. >> we will see you at the top of the hour. >> as millions get ready to buy the new iphone, what should you do with your old one? we will tell you about a new ebay resale program, next. ♪

>> welcome back. i'm emily chang. the new iphone comes out on friday and ebay is gearing up for a big release will stop besides being a place to buy a new phone, they are offering incentives to get you to sell your old phone. take a listen. beenay has always recognized as a destination for consumer electronic enthusiast. we've got a great selection of top brand products. great place to

sell your phone. ebay has initially had the best price for-- best consumers to sell their phone. we sell almost a hundred thousand cell phones a month without customers when their phones on ebay can get anywhere from $100 to $300 more than they would get trade-in. a program running called ebay for the win. if you put your phone on sale for ebay and it doesn't sell for some reason, we will give you a $100 gift certificate will stop >> the carriers have their different -- the carriers have their different offers. how does ebay compare? let's we are the best place to sell your phone in terms of maximizing your dollar. we have a simple selling flow and customers coming to ebay selling direct on our marketplace can make $100 to a00 more than you will get at carrier today. when you combine that with the

guarantee of selling your phone and take the price guidance, you've got the best offer out there. >> you say if it doesn't sell, you will give people $100? >> we have just launched this. go to ebay for the wind.com. now through october 24, if you and forr phone on ebay some reason it does not sell, we will give you $100 gift certificate on ebay. >> i was online looking at my options through verizon and apple and the leasing programs. i have an iphone five. what can i get for this westmark >> sounds like it might be time to trade up. >> it's definitely time to trade up. gig humming from verizon, you're probably looking at anywhere from $250 to $400 depending on the condition of the phone. comparatively speaking, you are

looking at making $100 to $200 more than you would make anywhere else. >> it's not in the best condition. there are a few cracks, will you take it? >> absolutely. customers will take the phone -- and we have seen a 30% increase -- numberber of five selling. there's a lot of demand for the phone -- somebody might take it and spend a couple of bucks to fix the glass and they've got themselves a brand-new phone. >> what about scams or fraud issues? how are you policing that? >> ebay has always taken trust in the marketplace very seriously. a big amount in detection systems and making sure we are aligned with agencies and our customer service groups to make sure customers are protected about this process. through those efforts, we've

seen a reduction in fraud of almost 50%. that customers are having a fantastic experience and we stand behind it. ask and you say there are already listings for the iphone >> the five s has increased 30% to 50%. enough, there are customers selling that on their platform. time, for those looking for an iphone 6 who did not have time to wait in line, those phones are starting to appear on ebay as well. going iphone 6 plus is for nearly $1300 on ebay. hope you ordered yours early. time now for the bwest byte where we talk about one number that tells a whole lot. we've got the numbers guy with us today -- i'm so excited

because you give us all of these fancy numbers. i hope you got something good. >> my number doesn't sound like it on the surface, but it is 5%. percent of advertising spent that will be associated with wearables by 2020. >> this is what advertisers are going to? >> it will be associated with wearables by the year 2020. we think we will cross the 50% spot for mobile advertising. wearables will be one of the fast-growing application development platforms. but there's so much excitement about it, but when you get to the end, you are looking about -- looking at about a $13 billion opportunity associated with wearable advertising. we aref interest, but not there yet. >> 5%.

thank you for joining us and thank you all for watching. we will see you later. ♪

>> from bloomberg world headquarters in new york, i'm mark crumpton and this is bottom line -- the intersection of business and economics with the mainstream perspective. today, the united states commit to sending thousands of troops to west africa to fight ebola. then the u.s. federal reserve begins its two-day meeting. we will look at the upside of an independent scotland. to my viewers in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making