>> to drop internet into allies and change the world forever. he sits on the boards of facebook, hp, and ebay. andreasen horowitz backs some of the hottest companies, like twitter, airbnb. i sit down with mark andreessen in this special edition of "studio 1.0."

>> 20 years ago this week, netscape, which you founded, launched. can we get applause for that? [applause] ushering in the web as we know it. how does that feel? >> it is fantastic. it is so extraordinary. we had a little bit of a glimmer that something might happen, that it might matter, that this internet thing might work out ok. it turned out it has. >> you have been incredibly productive since. you started a capital venture firm, andreessen horowitz. you have also tweeted 33,000 times in one year. >> thank you. >> which is more than all three founders of twitter combined. >> yes. that is true. i really think the stock and the company should be rebalanced. >>we are going to reference some of your tweets, and i want to start with this one. when i came to silicon valley in

1994, i thought i had missed all the opportunity, fun, and excitement. when did you realize you were wrong? >> it really took the internet taking off. silicon valley had been on fire in the late 1970's and 1980's with pc, and then with software, with companies like oracle and microsoft, adobe and apple, and all these local companies. the valley crashed really hard in the late 1980's. the number of people in the valley who were talented and qualified and skilled who had been through the pc revolution, who had been through the early days of software, there was no real thing for them to do. the minute there was somthing to do, they all stood up and said i want to be a part of that. for me it was a lesson in how the valley and technology industry more broadly is self revitalizing. >> so for someone who comes to silicon valley today, have they missed all the excitement? >> there is no way.

it feels today like 20 years of progress with the internet. it feels like we are starting to get the payoff from all the hard work we have done over the last two decades. >> ebay and hp recently decided to split up. you said they made those decisions independently. why is this happening? >> there will be more fundamental structural industry change in the next five years than there has been in the last 20 years. every company will break up. the will split apart. >> define every. >> i think, basically, every. it will take time. you can go down the list. >> you mention oracle. >> i won't sit here and this is something that is widely misunderstood, which is this conventional view that there are these tech bubbles. even google and apple are trading at loww pe's. the have low double-digit pe's. the really big ones like oracle and others are trading at single

digit price-earnings. if you're a big technology conglomerate and you are in all in these different types of business, youo have competition from all these new startups. >> would apple, google, microsoft fall into the category of "every?" >> some of the companies are growing very fast. if they are more than 20 years old, they would benefit from breaking up. many of them will be forced to do it, which is why i feel so good. >> it is not a sign of defeat? it's not a sign that innovation is dead or lost? >> it is a sign of change, evolution. it is a sign that there is the opportunity to do more and better. the real test is how they make sure that they stay on the leading edge, that they constantly have a product pipeline. >> from a leadership perspective, is there a changing

of the guard happening? >> i think nothing changed at oracle. [laughter] that might have had to do with the number of papers that larry has to sign. it will be similar for quiet a while. >> how do you see the digital payments and mobile payments race playing out? >> it is by far the most innovative and radical. ♪

>> let's talk about the next generation. you sounded the alarm about startups. bear with me. new founders in the last 10 years have only been in the

environment where money is easily to raise. that will not last. when the market turns, and it will turn, we were find that many companies will vaporize. there are exceptions to all this. if you're reading this, you are not one. what are you worried about? >> it has gotten easier to raise money. as a consequence, you get used to being able to raise money. you get to be able to raise money at a higher valuation. if you fly to europe, you can raise it. if you fly to asia, you can raise it. then you find yourself in antarctica looking for investors on the fringe. it gets harder and harder. you go bankrupt if you can't raise financing. you have to do a down round. that could be damaging to a

company's moral. >> why stopped short of using the word bubble? >> every bubble that has been called a bubble -- you always had a frenzy. you had the shoeshine boys or taxi drivers are hyper enthusiastic. valuations are running hot. i think it has more to do with cash burn. how much money you are raising and spending. >> how does this play out in your portfolio? you are an investor in airbnb, pinterest. how are you balancing making those investments and practicing what you tweet? >> to be clear, our companies are the exception. [laughter] one of the reasons i said what i said is that this is the same

conversation i have with all our ceos. it is a precautionary conversation. it is not a conversation that says stop spending, have smaller goals, it says be aware. learn from history. have an appropriate sense of risk. airbnb is an example that is a commercial success. the business is growing fast. it will be gigantic. there are other companies where it is a little bit of a balance. maybe not having bruno mars play a concert. [laughter] maybe we can have regular water not coconut water. we all love the coconut water. it is a human right in san francisco. [laughter] maybe the masseuse can come in on wednesdays and fridays. it has gotten to be a bit much. the alternate model is the amazon model.

if you want a desk, it is a recycled door. we are much more on the side of tamp down a little bit. >> you called carl icahn evil captain kirk. he said some things. do some of these activists actually have the same concerns as you? >> they are a result, not a cause. they are a consequence of companies being very cheap on the stock market. they are a consequence of companies needing to restructure. it is a little bit of a sideshow. >> is there a disconnect? is there a fundamental misunderstanding? >> in the long run, there is not a misunderstanding. >> i'm curious about your thoughts on payments.

it is an area that is wide open. now you have apple pay, google wallet, bitcoin. how do you see the digital payments and mobile payments race? >> this is a big thing. the system has not changed in 20 years. this is another area where there will be more change in the next five years. there are two big drivers. one is apple pay. and there is bitcoin. apple pay is the thing that is freaking out all the financial services. apple is showing up to the party and saying we will now be in the center of payments. that has caused a collective heart attack. there are payment companies that are aligned with apple. there are payment companies that are not. they are having a stroke in real time. they're trying to figure out the implications of apple pay. they figure google will respond to apple pay. >> google wallet has not worked out. why didn't it?

>> this is what is interesting about apple pay. it is revolutionary, but it is the most consistent of the existing payment systems. what is surprising is that some things don't change with apple pay like you put in your credit card. >> are you saying it's not innovative? >> it is very clever. i acknowledged what i just said. it is cleverly done. if everyone has a way to pay and all the merchants take it, then it is all great. until you have universal acceptance, nobody uses it. is it a network affect problem? it is calibrated to skip through that to be in line with the status quo of payments. it plugs into the existing system. it was apple in the middle of the existing system.

bitcoin is the inverse of that. it is radical. cryptocurrency is truly revolutionary. a different way to do transaction processing. a potential way to replace the status quo. it is far and away the most innovative. apple pay is the thing that will have the impact in the next three years. the combination of those two will cause enormous change. >> you have been a big supporter of bitcoin. you could be wrong about bitcoin? >> sure. the saving graces -- we are venture capitalists. i think like a venture capitalist. we make 10 bets. we assume that five will go straight to zero. no one knows one way or the other. if it does work, it could be profound and revolutionary and gigantic. that said, underneath that is

that the cryptocurrency concept will become vitally important. i think it will be in the form of bitcoin. even if it is not, it will be something else. >> netflix could have a billion subscribers in the early 2020's. there is no reason why it cannot be gigantic. ♪

>> a lot has been made of companies like uber and lyft. i know you have been a republican donor, and some republicans want obamacare repealed. what would you say to that? >> if you hate obama care as a government takeover, you should still love it because it makes possible for people to pursue their own dreams.

>> there has been a conversation going on about inequality and responsibility of companies that are part of the stanford hospital project. mark benioff has been adamant that companies need to do more. what do you think? >> that is basically true. a lot of the new startups are brand-new. a good part of this is what the big companies do. i think that is a big deal. >> what about inclusion and diversity, something else that -- why is inclusion important? tech is including -- inclusionary. the reason i am so confident is because of the incredible coverage -- people in silicon valley -- the challenge is we are still underrepresented when

it comes to women. >> do women ask for raises if they deserve one? [laughter] >> yes. [applause] i don't care what anybody says. i'm a fan. i think these are solvable problems. two different ways. one is pipeline. there are not -- women are only 15% of computer science graduates. that is too low. we have to get more women into computer science. the other is access, networks. the three organizations that we are funding are working on both sides of that. i think if we really bear down on both sides of that, we can move the needle pretty fast. >> i want to talk about the next five to 10 years in silicon valley. i want to start with television, because i know you love watching television.

i work in television. i'm selfishly interested. what is the future of television? >> you can subscribe to hbo without being a cable subscriber. [applause] i always maintained that people want that. hollywood said that would never happen. i think television in the form of everything from live television all the way through to nonfiction content, news, so forth, documentaries, fiction, drama, comedy, it will grow a lot. the reason i am so confident is that the reason people can receive streaming video, two billion people, on its way to 5 billion people by the end of the decade. in the future, if you want to watch something, you go straight to it. or, new bundles.

i think netflix could have a billion subscribers by sometime in the early 2020's. amazon will be very big. the new aggregators will be large. >> what is the future of apple under tim cook? will apple be a big player in television? >> it looks promising. it looks extremely promising. the iphone 6 is a huge hit. apple is gaining strength. you can just feel that apple is gaining strength. i think they would do extraordinarily well. the interesting thing about apple tv is that apple keeps refusing to build the tv. everybody keeps predicting there will be an apple tv you put on your wall. they don't build it. i believe that they don't build the tv goes back to the

smartphone, which is a smart phone upgrade cycle is two years. the upgrade cycle for tvs is five years or 10 years. the tv will become a jumper for a dumb riff real to the smartphone. i think that is a low margin business. >> what is the future of elon musk? >> obviously he will build the iron man suit. [laughter] in the suit, he will fly to mars. he has some work to do between here and there. there are three guys, three founders who are really revolutionizing. we are a lucky industry through we have all these people who are incredibly well-known known and

built these amazing companies. he is one of those. peter teel, elon musk and larry paige -- you talk to them and their ambitions and aspirations are another step up from the rest of us. the audacity -- look at anyone's career -- to start a car company. the one company you know you should never start in the united states is a car company. the other company you should never start is a rocket ship company. he is just getting started. he is in his mid-40's. he has another 30 years here on earth. [laughter] >> if peter teel can discover the cure for immortality. you said on twitter, your startup is not the next whatsapp.

what is something new? >> we are trying our best to find it. there is -- peter teel talks about this. there never is one. there will never be another microsoft. there will never be another google. there is just the one. we have founders come in all the time -- there were another -- there will not be another whatsapp. the one thing we do know -- it will be out on the fringe. it will be bizarre. it will be software and service in 1999. people will not think it will work. 10 years later that is the thing. >> the great marc andreessen, everybody. ♪

.

>> welcome to "money clip." i'm olivia sterns. here is the rundown. julia roberts sees a bubble. just another regular morning on "bloomberg surveillance." lebron james returned to cleveland with the loss of the knicks? in politics, it is the final weekend of the campaign season and the airwaves are flooded with ads, good, bad, and some pretty ugly. why horror flicks never die. finally, todaysi