i live from pier three in san francisco, welcome to "bloomberg west" where we cover innovation, technology and the future of business. germany's rocket internet fails to take off and it trading debut . shares of the company are getting hit hard. rocket is known as an incubator for replicating u.s. businesses like amazon and pinterest. has the market for ipos taken a turn for the worse question mark tesla is revving up a new erotic announcement. elon musk says they will in vail

.omething called the d what does it stand for? all-wheel-drive? we will look at the possibilities. apple and google are pledging to shield your data from the government and hackers, but will the encryption technology prevent snooping? we look at how the government can still get into your phone as a wants to. germany's rocket internet has made its name cloning american internet businesses from amazon to groupon. but what it could not clone was the success of alibaba's recent ipo. instead, shares are falling on their trading debut after pricing at the top of the range, coming a day after another company backed by rocket founders also fell in its trading debut. what is behind the decline? a broader market turn for the worse for concerns about their business model? cory johnson joins me in the studio and the founder of air

help and former employee at rocket joins us from new york. what do you make from the reaction of investors today? >> maybe there is little concern about their growth in emerging markets they have started a lot of new companies and. i also think the brothers them time in- it will take these markets where you have to .ducate people >> looking at rocket, what impressed you and what did not? fanatics focuse on execution is quite remarkable. they have been able to do things in just one year other companies would take four to five years. expandad of how they existing proven business models to other countries is white remarkable. let's this is a company criticized for copying other companies from the world.

is that a fair criticism or do you feel they are more innovative than we give them credit for? >> i think it is a fair criticism. it is a reality. successful,ready proven online business models and taken to countries where they do not exist yet will stop this is the core of their business and they can do it because they are extremely good at executing and because the u.s. startups a copy tend to ignore the other 6 billion people in the world who might want to buy shoes online or food online -- this is the core of what they do. innovation happens on different levels. when you start in a new or emerging company -- emerging country, you have obstacles that are difficult to handle and come across and you don't have a manual for that. i think rocket is very good at that level.

>> to that execution, what are these guys like? it seems like they've got a certain drive and rocket is not an accidental name for them. >> they are very intense. .arketing is the driving force the guy who runs the ventures is very intense and logical, but he pushes for everyone to perform at their best and will keep going until there are no more shoes to sell. after that, he will ask you to call the government to reduce taxes of the can buy more shoes. foundedompany you have -- you found support from a famous incubator in the united states. how is that different from rocket?

>> very much different will stop it's all about the product and delivering something people want and creating something new. they would never dream of copying an existing model. it's a different approach but i inld say they also know that order to make those ideas happen, need to build a company -- this is where i think rocket internet is a good school to go to for that. while it does not have the new idea to start a new company. -- we tend to look at ipos and say if it goes up afterwards and successful. but that means money was left on the table. do you think they have a notion they will take money from the stock market as much as possible and whatever happens afterwards is not as important as raising the money the first lace? rocks i think it's a strategy for them to your race as much as possible -- >> i think it's a strategy for them to raise as

much as possible. it's part of a interplay -- it's , at of a bigger play platform that enables them to launch new companies very fast and the first mover advantage compared to amazon and others may be going there someday. they have said they want to transform the company from an incubator to an operating company. how do you see that transformation happening and can they do it? >> rocket internet is an operator today. it's an incubator in a persistently and people to operate the companies, but i think we will see maybe more companies where they would go in and expand the company's to the rest of the world, as we saw with groupon. an rocket internet is operator more so than any better.

thank you so much for joining us. we will continue to follow rocket in the days and weeks to come. initial public offering once again. as the recent nasdaq declined to blame or is there something deeper with box's is this? -- box's business. ♪

>> i'm emily chang and this is "bloomberg west." box will postpone its initial public offering until next year because of volatile market conditions. they originally filed for an ipo onearch but the ceo raised hundred $50 million in an initial round of hunting. i've spoken to him a couple of times about this over the last couple of years. listen to what he has had to say. independent come along term sustainable company -- >> you've told us 2014. do you feel on track for that? like ite said words

could happen that year. use thosewould still words. but you filed for an ipo in march. when is it going to be? fax i can't answer that. >> this year? >> we will have to see. we are certainly on that path, but we were more careful talking about timelines. >> so why does it keep getting pushed back his chair -- keep getting pushed back? , like alooking like box lot of companies, were waiting to see what happened with alibaba before making any moves into the ipo world. once alibaba one public, the market turned. we see the decent selloff since alibaba's debut, making it choppy or for these companies that want to go public but may not have the kind of growth story and margins story alibaba did. alibaba is profitable, but box

is losing a lot of money. it has different fundamental aspects investors can point to and say this is too risky for me in a volatile market will stop -- volatile market. >> losing money hand over fist is the way i would say it. the ipo market, as you know better than most, there are a lot of deals in registration waiting to go out the door. is this about the ipo market or is this a company nobody wants to buy stock in western mark >> that the good question. fox does not have as easy a sell -- box does not have as easy a sell. they raised $100 million that allowed them to put off until what they call the best time to go public. what that best time is maybe that there fundamentals improve and make it a more solid story for investors. we have seen the ipo market

comeback, a lot of companies who did not want to compete with alibaba -- i will remind you a lot of those companies are not tech and growth companies. we saw citizens come out, a retail banking train -- banking chain. the growth names by and large remained on the sidelines will -- remained on the sidelines. tech companies look like in a post-alibaba world? are we going to see other companies delaying their plans? >> we see e-commerce companies writing the wave. internet is trying to ride on the coattails of alibaba's momentum. other companies in the pipeline, i'm told the fourth quarter will be slower if markets remain as choppy as they are today,

especially as volatility spikes. we are going to see companies -- box fits into this category, where they raise any at a higher valuation, making it difficult to do ipos with the markets turn because that investors will have to settle at the down round and nobody wants to do that will stop -- nobody wants to do that. >> thank you. turning to tesla and elon musk tweeting about new products coming next week -- he tweeted ."bout time to unveil the d speculation is that could stand for and all-wheel drive tesla or a cheaper addition. what kind of product is the electric car company about to launch? cory johnson the still with me. what is this? >> it's a dog. and all electric dog. we don't know what it is.

the mystery of and elon musk announcement. the model x was announced with much fanfare. it was something they planned to put out in 2016 and the demonstration said they would be ready to get it out soon. there was a lot of excitement during the demonstration -- they infamously as a vehicle is rotating around on the stage and people were cheering and taking actors, they could not get the trunk open on this thing they were demonstrating. three? about the model that's the smaller car i'm hoping for. >> tesla gets a lot of excitement around this company for things they haven't quite done yet. there is the suv they have had issues with will stop it is a very exciting looking vehicle but what we see from the company is the growth trajectory they are on is something of a struggle. this year, they said they would ship ready 5000 cars but they

will have to have a huge worth quarters -- huge fourth quarter to get there. sales in the u.s. are slowing down. like i think i'm going to have to wait for the dog. >> you should get a dog. >> i'm not a dog person. ,e have breaking news -- iliad the french telecom company is prepared to make a bigger offer for t-mobile. the board of deutsche telecom it down and now iliad has seemed to lined up more backers. to access the key to the deal. wants to unload their stake and iliad doesn't have the cash, so they have to line up partnerships or loans or debt or whatever. come up with have 56.6%, enough money to make the bid at $33 a share. we will be looking under the hood to see how they got it because money is cheap right now.

that is a lot of debt for a company that has a lot of debt will stop >> i have been speaking with the ceo of t-mobile and he says he doesn't know much about iliad. the ceo of iliad is a similar kind of road maverick in the telecom industry. he has done some innovative things and shake at the industry. i wonder if it makes sense, but what happens to leadership? >> in an era where money is so cheap, guys can go pedal to the metal and make a bid for things they otherwise might not be able to do. did you know he owns the rights way?" song "my maybe they can share that. has done ise interesting that she's grown in this business that struggled for some years and in terms of pricing and adding the right kind of customers willing to pay

for their services. >> everyone you ask seems to be excited about what he has done. to buy t-mobile were convinced regulars it was a good idea but that did not work out because they own sprint. preparing to make a higher offer for t-mobile. coming up, see -- a sneak peek of my new show -- i sit down with the godfather of artificial intelligence to hear how he founded google x. ♪

>> from the self driving car to google glass, the google x founder has had his hand in many things. he's trying to fix one of the toughest problems out there, and that is education through his new company. he's the first guest on my new 1.0" airingo tonight. i sit down with the so-called godfather of artificial intelligence, from is up eating in germany to the founding of google x. >> how did they get you to come to google? where i at the point wanted to explore what it means to work in silicon valley. i started team that builds technology and they said joining google, so we joined google. >> at what point did they say we want to do self driving cars and you know something about that? >> larry came to me and said it's time to do something courageous that is really out there, a moonshot. he had to convince me.

in that the car and i said it's hard. he said that he tried it? i said i haven't tried it because it's hard. try andy said give it a -- to helped to find found google x. how did that start? >> i drank the kool-aid. it turns out the google leadership are kind of the same personality, so they said absolutely yes. i came up with the name google x and one of the first things we attempted -- our very first photo type -- >> two kilograms on your face? >> it was a backpack and we strapped cell phones and my nose would get crushed. a bunch of iterations to make something you could

actually wear in normal life will stop >> some of the other projects -- an effort to connect the world via but -- via balloons that float around in the stratosphere. >> that's another one of these crazy moon shots where you have to be a believer to even attempt it. it, thethinking about idea came up that you could launch balloons and attach satellite equipment. the downside is they are exposed to wind. >> what is the potential? >> the potential is to build an entire internet up in the air at that have balloons over is that provide unprecedented and with him places where they would never expect coverage today like central africa or the open ocean. the idea is to make a level playing field so everyone has a chance. >> facebook is trying to connect the world in different ways. who wins? >> i will never comment on that. >> what about the medical

contact lenses? >> contact lenses are big enough to receive energy, put a communication device on, it's actually very usable. you can actually measure your glucose level. >> what is a brainstorming session inside google x like western mark >> every time i'm around the founders, i fear them will stop you have to have perspective how smart these guys really are. >> a fascinating discussion. don't miss that interview with the google cofounder tonight at 9:00 eastern tonight only on bloomberg television. >> is 26 minutes after the hour, that means bloomberg tv is on the markets. let's look at where stocks are trading -- we have had a lot of down sing around in today's session. stocks were down sharply but the

dow is unchanged and the nasdaq as well. the s&p is slightly negative, so there has been a lot of volatility increasing even within the span of the session. we will give you another up date later. more "bloomberg west was quote is next. ♪

>> you are watching "bloomberg west." google threatened with a $100 million lawsuit. google has been accused of "lately unethical behavior for failing to take down the images from the search engine. requestss not returned for comment yet. law enforcement officials are -- as google and apple

half -- the government -- him -- i am joined by jordan from washington dc. at this point in your story, google and apple promised it would be encrypted but you make atomic the government will get there anyway. data and they will get their hands on it. >> that is right. there is a lot of misconceptions about what encryption features can and cannot affect on your phone. features google is absent -- is adding are important steps lonrd that, however, foresman has many ways still to get access to data that passes through your phone. when apple's measures will do is encrypt data stored on your device.

if a piece of data ever leaves your device or sense into your device, that is still obtainable via warrants. the main losers in this will be local law enforcement who draw heavily on handing over these phones to the companies and and showpen these up me the pictures on them. for intelligence agencies like the nsa, it will not make much of a difference because they collect these in bulk. >> have we ever seen anything like this, where a consumer product has been personally architected to keep the government out? >> a good question. we have seen with earlier encryption technologies, there have been attempts to secure data from the government but we have not seen this. there is a new paradigm at work here with the snowden revelations. apple is taking a powerful step

in saying we will encrypt all the data on devices. there is another way to look at it. responding to local law enforcement requests is a time-consuming and bureaucratic process. by making this move, apple and google are basically saying, do not bother us with these because there is nothing we can offer you. >> the u.s. attorney general said it is fully possible to pursue the job while still adequately protecting personal privacy. the fbi director need while saying, what concerns me about this is companies marketing something expressly to allow them to place themselves beyond the law. are these technologies -- is it actually upping our security, or is it more of a gimmick? >> a good question. i think it is a little bit of both. affect,s will really

our photos. for local law-enforcement, essential to investigations. you will see pictures of people doing bad things. in that sense, it does make it to covertly look at phones. you serve a warrant on somebody and command pathos. they will leave a bunch of data. in that sense, it is making it harder to do the job for law-enforcement. a lot that intelligence agencies would be interested in are still accessible. those things are all still very easily available. it is a t-bone, as one privacy

advocate -- advocate put it. of all the company's out there, apple is the one that thought of -- fought off is in the man's the longest. >> the companies were in a bad spot and they could not talk about the request. that data has a lot more value to them and their reputations than it does even for the government in some cases where it tim cook made a point of saying we do not care what you do with your data in most cases. apple score pretty high on lots of security measures. the question about whether it is a gimmick, it is part marketing

and also security. it is a little bit of both. it is not necessarily a bad thing, but that is what it is. >> all right. jordan, thank you so much. ebay now itto visa, would spin off paypal. tech influence on the space is only growing. how are traditional payments companies reacting? for more, cory johnson is with us. . profile is just written talking about how his company is adapting to tech in the next edition of bloomberg markets magazine. in the news this week is paypal spinning off of ebay. what does that mean for bees -- four visa? less another example of how technology is transforming the

payments industry. the sitenteresting is is trying to act much more like a technology company than before. his strategy is focused on opening up the network to companies visa has not historically worked much with. that includes retailers visa has disagreed with in the past. it also includes technology previouslyhat have been viewed as threats. to me a little bit about what their plans are in china. the market has been difficult for them and in europe, for that matter. entity,e is a separate visa europe. visa inc. does not get revenue from visa europe. there's not much they could do about that. certainly on china, russia is another market the company has

faced challenges this year. a lot of it is around regulation that restricts and the market that restricts what foreign networks can do in that space. the focus charlie has taken is to do what he can to open up and engage with as many new players as he can. onvisa partnered with apple apple pay. they partnered with square and google. what kind of new technology is visa itself working on? >> that is part of the strategy. you talk to investors in visa and they say, it is not so much that visa needs to be inventing the bright and shiny new object. it is that they need to be a part of what ever the bright and new shiny object is. apple pay is a great example of that and it engages other networks as well. visa has also relaunched their own digital wallet earlier this summer.

number ofroducing a initiatives right now and we will see how they play out. >> all right. ceo.profile of the visa coming up, the potential of clean technology and renewables. we will discuss next on bloomberg west. you can watch us streaming on your phone and tablet. ♪

>> a clean energy ecosystem summit in silicon valley. but with all the hype over clean tech, have the companies lived up to it? , stuartme now

bernstein. clean tech had a lot of promise earlier. have things changed? >> he fewer that any new industry, it goes through four times. , any enthusiasm, rejection early inning volatility, and then acceptance. the internet went through the same phase in a 99 9-2000 time. they fell over the next couple years and went sideways and nobody doubts the success today. our industry is relatively new back to 2006 or 2007. it went through the first couple of times. early enthusiasm, rejection, a lot of volatility, but the companies that have come through the other side have performed extraordinary league -- extraordinarily well.

>> they have been criticized for it. are they going to be vindicated? will clean tech have its moment? >> they arty have. you look at some of the successes out of portfolios, and i cannot talk about specific companies, but there have been terrific returns here there have been failures as well, of course, that is the nature of capitalism. you hope to have one out of 10 companies that has a return that pays for the others that do not make it. >> what about trends? what are you most optimistic about right now? what kinds of companies? >> let's look at electric vehicles. just a few years ago, a national there were only be 2000 electric vehicles on the road by the year 2035. we have blown through that materially already. there are 20 different electric vehicle brands you can buy. does anybody think we will have

millions on the road when today, 15 million cars are sold every day? no. that is an area that is done quite well. another, solar on rooftops, your house, in your office, your warehouse. on-site generation of energy. a few years ago, another national agencies that there would just be one big a lot -- one gigawatts of solar produced. companies are doing that today. individual companies are doing that today. people's predictions of most of these sectors have been wildly low. they are exceeding expectations today. >> how much are you guys investing in this? because it is a large priority. 2005, but we thought was a pretty bold prediction, $1 billion over the next 10 years,

well, we actually blew through that number a year later and within five years, we had invested $23 billion. two years ago, we made a new target and said we would finance $40 billion over the next 10 years. people scoffed at that target and here we are two years later and we are already $23 billion into that new target. very important. we have an environmental group at goldman sachs dedicated to this. a clean tech and renewables group. when everybody else in the sector was firing their teams and disbanding the group, we doubled down and hired more people internally and hired more people from the outside and we went after it aggressively because we knew this would be a large market opportunity and we were right. watching to see if the moment for clean tech happens or continues, however you want to look at it. think you for joining us. let's get a check on stories

with markdlines crumpton in new york. what else is going on in the world? >> more than 80 people in dallas are being monitored for symptoms in a bola. they came in contact with an ebola patient as well as others he had met. his family members had also been ordered to remain at home until at least october 19. new york city commuters could face years of trained delays into manhattan. amtrak plans to start remodeling two of its four east river tunnels due to repairs needed from hurricane sandy. a permanent fix is said to be needed for tunnels, although work cannot start there for about a decade. tv has renewed the right to carry the nfl sunday ticket package and stream it online. the deal will cost directv about 1.5 billion dollars according to a person with knowledge of the matter. tv has renewed the right to carry the nfl sundayat&t, wht tv is pending, had the right to

walk away from the entire deal if the contract was not renewed. emily? >> what else is coming up at the top of the hour? >> we will go live to northwestern university in illinois for president obama's beach at the economy. at a time of global crises and continuing tensions between russia and the ukraine, the president will attempt to turn america's tension. top of theyou at the hour. emily, back to you in san francisco. >> all right. looking over to it. intel has the latest entry into the tests -- tech race. ♪

>> welcome back. intel is unveiling the latest entry in wearables with the release this week of the peak watch. it goes on sale next month for $199. my partner, cory johnson, recently spoke with the intel president and general manager of .he device >> we bought them because the technology is phenomenal and is the best in >> -- in class. it is the one that resist -- works and gives you results. it is our second generation device. it is better all the way around. first jen was good and this one .s thinner and made of aluminum it has glass on top, a sensors, it better

is the first generation on steroids. this one does everything as well as the first one. it is just a better product. >> i am a big fitness bandai. the company has had a lot of issues with this. it is the third one i've had in the last year. i also wear a heart rate manager . i wear it on my wrist but i cannot wear it when i swim. light, but there it goes. >> this is the lights that shine through your skin and figures out what your heart rate is so you do not wear your chest strap anymore. where this not only while you are exercising, but where it -- when you are sleeping. it tells you what your sleep habits are common tells you what your exercise habits are. it is cool and it is one device that does many things.

>> i get it from a hardware perspective, but fundamental, i do not care about people but rather business. let's start with the technology. >> the technology behind it, there are a lot of geeky terms. you hear nowings is center fusion. smart people have figured out how to take the sensors inside of the peak rotted and figure out what your body is doing based on what the sensors tell it. it is not an easy thing to get right. you have a little thing on your risk and you shake it. i had one of those earlier devices someone else made. the suspension is so tight, it tells me i took 1000 steps. >> i went horseback riding. i can tell you i was very fit that day. the science behind it is very good. the thing for me as we bought the company not just for the product, but i can take that science and build it to other products and licenses to people. we would like to get our

technology to as many wearables as we can. it is intel software. next-generation, you will probably see an intel chip. we are more than just a chip company. we are a software and now the rhythms company. this is all about the experience and all about what we do. >> the business behind this, how big is the market, is this about displacing others or infinite growth? interested ins fitness. >> everyone wants to be more fit . there is a level of gate out fitness that only a few of us are interested in. think is pretty big. it is not just elite athletes that a lot of people would like to see how their daily activities impact their sleep and how they make themselves feel better. i drank a red bowl before i went to bed and my heart rate was high all night. that is something to think about. >> you needed a watch to tell you not to drink a red bull before sleep? >> i wanted to test it and your

body behaves as you would expect it to. we're just getting to the beginning of this market. pundits now say there are 50 million devices connected to the internet by 2020. it is a huge market. we think this is fundamentally a very big market. >> the intel vice president and general manager. time now for the bwest byte. cory. what have you got? >> four, the number of adam sandler movies net links has contracted to broadcast only on netflix. happy madison productions will work with netflix to develop the next watch the movies. they say they have to goal data -- they have data that people watch adam sandler movies over and over again. >> i love adam sandler. notlast few movies have been such a hit, i am just saying. >> adam has done wonderful things.

he has done great stuff. >> all right. thank you. do not miss studio 1.0 from airing tonight at 9:00 p.m. ♪

>> i am mark crumpton. this is "bottom line." today, president obama tries to assure americans that he is focused on the economy. lagarde discusses the slowing global economy. despite democracy protest, hong kong's chief executive says he will not resign. to our viewers here in the united states and those of you joining us around the world, welcome. we have