>> live from pier 3 in san francisco, welcome to "bloomberg west," where we cover innovation, technology, and the future of business. i'm corey johnson. emily chang, who i am not, will join us shortly. first, a check of your bloomberg top headlines. senator john mccain says u.s. military strategy should be driven by threats to the nation security, not the budget. he was talking about the fight against the islamic state. >> you need a lot of you are going to defeat isis, and the longer we wait, the more isis

solidifies it position and, by the way, controlling an area larger than the size of indiana, and for us to have one conflict in syria and one in iraq is the height of insanity. >> and speaking about the midterm elections, he said he is confident he and the president can work together. and clashing with police in the resort city of acapulco, police said one point blocking roads to the airport. more going on in mexico city. students are believed to have been killed by a drug cartel with support of the police and local politicians. and a resignation after less than one year on the job, out following a board review of his conduct with an unnamed customer. the juniper board said they had different perspectives. another executive has been named the new ceo. all right, to our lead, president obama tries to get u.s. business in asia, and there

is also a key issue for americans, net neutrality, obama calling on the fcc to protect internet neutrality at all costs. he said he does not support allowing more payment for higher speed. >> ultimately, the decision is there a loan, but the public has commented nearly 4 million times, asking the fcc to make sure that the consumers, not the cable company, and debts to determine which sites they use. standing up for principles that make the internet a powerful force for change. as long as i am president, that is what i will be fighting for also.

>> strong words from the president, but will it hold sway over what the fcc adopts? former commissioners. michael copps, what did you make of the president's comments? >> well, i am delighted that the president made good on his long-standing pledge to do would take a backseat to nobody for net neutrality, and what this really shows is we are not just talking about an agency or a little set of technicality or rules. we are seeing that the president really understand that this is something that is important to the well-being of the nation. it is a driver of jobs and technology and democracy, so i am thrilled, and i hope the fcc is listening and will vote at their earliest opportunity, the strongest type of type two reclassification for broadband internet. >> harold, what is your take?

>> well, it is a great honor for me to be here with my friend, michael copps, but i have a very different view. i think it is a very sad day. here is the president of the united states visiting china, a country that does not have a free and open internet, and he is calling on the fcc to regulate the internet. make no mistake that net neutrality is all about regulating the internet, and i think that the president's proposal has also put all of the commissioners, particularly the chairman, in a very awkward position. if they do what the president has said, they will effectively look like and in actuality be puppets of the president. you are supposed to be an independent agency, as the president said.

there really is not a lot of precedent for the president of the united states taking to television to instruct the fcc what to do. it is a very sad day. >> michael, let me ask you about that. when we look at title two, which is no new law at all, that is part of the mutations act of 1933, when the internet could not have been a fantasy even. michael, do you think this is with the original principal of the mutations act of 1933, or is this new law? >> well, i do, and we often stray from those, as the fcc did in 2002 when the fcc went on to reclassify the cable modem and then went on to reclassify telecommunications generally, but let's be clear. this is not the old debate of regulation versus deregulation. this is a debate about whether consumers or these huge isp's are going to have control over our experiences on the internet, and all of this talk about sending the wrong message, i think china is a good place.

the fact that the president is in china right now when he makes this statement. this is about individuals having power over their online

experiences, and the threat to that comes to internet date keepers at home or foreign governments abroad, it all comes back to individual human beings, and it all comes back to keeping this open and dynamic technology open and building a better future. >> herrell, let me ask you, the notion in silicon valley that tolls on the fast lane of the internet could dampen competition. why should comcast get to decide -- why should comcast make a decision for me as a consumer that i should be watching comcast video or netflix videos because the amazon videos that they did not pay more for our slower to get to me? >> first of all, let's be clear that all of the so-called problems are hypothetical problems in the future. this push right now to regulate the internet is all about having a solution in search of a problem. there is no problem today. the united states has the most dynamic, competitive online industry in the world. >> harold, let me just disagree with you for a second. right now, comcast has the ability to speed up its own video-on-demand service and can slow down that of the competitors, and that is happening right now. >> if it is happening, if there is some anti-competitive problem, the federal government has a lot of weapons in its arsenal to go over anti-competitive behavior. we have professional people who i think do a very fine job. if there is something wrong that comcast is doing, then i think those agencies can go after them. it is not something that the fcc needs to have some new form of regulation that is going to take

over the internet. this is not something that the united states needs. >> michael, does the fcc or the federal government already have the tools to regulate? is this an unnecessary tool? >> no, the fcc has the authority. what this does is reestablish and reassert the authority, as you point out, that the fcc has had for years and years, and you cannot say this is a solution in search of a problem. we have had comcast, bit torrent, at&t, all of this stuff interfering with the internet, and this is not something coming in the distance, and this was during the time when isp's were supposed to be on their good behavior because the fcc is considering net neutrality. imagine if it does not that's a good open internet role. that will be a good time for the service providers.

>> the good times are rolling here on "bloomberg west," and we are glad to have both of you guys. this is a great issue. we have people commenting online and lobbyist spending aliens of dollars, and we thank you for sharing your view points, as well. thank you very much. all right, apple pay is threatening to change the way we pay, and how our big tanks going to keep up with the innovation at big tech companies? we will talk to a guest who sits down exclusively with us. and others tell us what they think about the chinese tech giants, and that and much more is later this hour. ♪

♪ >> i am cory johnson. this is "bloomberg west." well, apple pay is the latest tried to change the way we use our money, and others like

squared and paypal have been involved, but how do these credit card companies keep a seat at the table? the conference in sunny half moon bay. what is going on? >> aren't you jealous? i am warm and cozy out here. blue skies. we have it all. >> known for its sun and warmth, except when it is not. >> a ceo of city ventures, who really opened the office, and you guys are in a league of your own. none of the other banks are doing what you are doing, right?

>> i think we are looking at creating a complete system of innovation, and part of that is starting with our venture activity. >> had you deal with the sequoia or others? >> we actually partner with them, and the real opportunity we can bring to their companies is we can help their companies scale. we talked about the way we invest. this is to take them where we see there are opportunities and find the right place to insert them in the organization, to stay with them while we look at hopefully opportunities to commercialize. >> i know that squared is one of your companies, and they are really focused on finance and the finance industry. >> we are looking at areas where we think it will accelerate our adoption of some of these breakthrough technologies or capabilities. >> so some like square, who are under these opportunities, they just bought a food startup, and there is a question about how big the market can be. how do you respond to that? >> the market is huge, and i have huge confidence in jack and sarah and the way they look at it.

we see them frequently, every quarter, and spent some time together, and their approach to solving big customer problems is so inspiring, so i have a huge confidence i think you will see great things there. >> what about the delivery guys swiping my card on his phone or the guy at the flea market? >> it is to make this ubiquitous throughout the world, and i have confidence in jack and his capabilities to make that happen. i have a lot of faith in apple pay. but it is all good, all exciting. >> what has been like working with apple so far? >> my team has been working with apple since the day we landed on the ground here, and it has been a phenomenal experience, and i think they are fantastic partners, and we really explored a lot of different things.

>> what about apple pay specifically? >> it is intriguing, typical apple, thinking of it from end to end, and it is seeing this way of giving customers more confidence with that unique recorder number, so it will be a very interesting play. it will be a breakthrough to take this to a new level. >> mark andreessen told me that apple pay is innovative within the status quo, so not that innovative but kind of what we have for the short term. when will it be something else, something new? >> i think the thing with apple pay is what i was just saying, as it is a time to see some breakthrough. it is not about the technology. it is about the experience, and if we can make this -- we are finally solving something for customers, versus just a fun thing of tapping your phone. there is so much of the market to tap into here. >> you have been a chief advocate for women and women's initiatives at citigroup, and we were talking about your diversification numbers, which

are better than the technology companies. we are seeing google, apple, facebook, 30% women. >> half of our community is women. what we are focused on is having more women represented in our seniormost ranks. >> it is far less than 50%? >> yes, yes, and we started a program a few years ago about a different way to help women achieve their potential i really giving them advocate to work alongside them and bring their capabilities to the forefront so when leaders are looking at the next opportunity for advancement that their names are front and center, and we have seen some great success with that. >> apple and facebook are now offering benefits. they will pay for women to freeze their eggs. is that a good thing? >> i have had a hard time with that. i have had so many people work with me over the years, and you see so many people waiting, and you worry about them having first children at much later ages, but maybe it is just because i was so young when i had a child at 26, it seemed a lot simpler, so i do not know.

i do not know if i am an expert with that, but it is a tricky time right now for young people to be figuring that out. >> do you think they should not be encouraging women to wait longer? >> i think women are pretty tough, and they will make up their own minds. >> thank you for joining us. >> my pleasure. >> they have fire pits there. get warm. and single day coming up, the largest e-commerce event in the world. billions?

yes, billions. we will get the latest from china, next. ♪

♪ >> welcome back to "bloomberg west." i am cory johnson. the alibaba singles day has kicked off, and it is a big number, and $1 billion in goods were sold in the first 20 minutes. it took one hour to reach that mark last year. figuring out a way to celebrate being single, but now, it is an $8.6 billion in sales business, and joining me from the conference at half moon bay,

emily, it has been a long time since you were single. me also. >> i am not single, but i would like to buy some stuff for me also. is that ok? >> buying things for me, you know what i want. was single day a big deal when you were in china? >> it was becoming a bigger and bigger deal. alibaba really embraced this in 2009, so about five years ago, they started offering deep, deep discounts on things like cars and clothing, french wine, chandeliers, and last year, they sold $5.8 billion worth of goods on single day, the year before only $3 billion, and that is nearly a $3 billion jump in a single year, and this is the biggest shopping day in the world, and it works last friday and cyber monday in the u.s. combined last year, u.s. consumers spent about $3 billion combined, so how much money is being spent in china on chinese consumers, on themselves, and we have our producer on the ground at the alibaba headquarters today. she spoke with the coo, and take a listen to what he had to say.

>> so many people come to our site for shopping on this consumer day, and it is a very clear indication that we can give them what they want, give them the value, so we are focusing on providing value to the consumers, not on other players. >> so you have your pick, some of the most popular brands this year. the gap, nike, a pair of shoes? do you want a new phone? you have your choice. >> one of the companies getting

involved is tesla, which has been struggling with their new offering there, and the cars, of course, do not have the google navigation system when you get into the cars. it is interesting that alibaba or other retail efforts are getting on board with this thing in the same way. they are taking over christmas as a shopping day, not a religious holiday here. >> i knew you would want more than i have to offer. it figures you would ask for a tesla. i do not have it in my budget. we will have to check.

this has to do with 1-1-1. singles day dates back 20 years to 1993 at a university, and they started to have bachelor's day, and then they decided to include women and make it more inclusive, so it is a long time tradition, but only recently has it become a mega shopping day, kind of like an anti-valentine's day. >> and then with the demographic trends, the number of single people in china, this is something that stands out for them, with the number of single people. >> you certainly have seen a rise of the consumer middle class in china, we believe have money to spend, and they are spending it on themselves, because why shouldn't they? >> that is what money is for, to make yourself happy. why shouldn't you? emily chang. but next, the cofounder of linkedin and paypal. what should the e-commerce giant do next? he is here and only here, next on "bloomberg west." ♪ >> time now for bloomberg television on the markets. i am julie hyman. take a look at where stocks

traded today after three straight weeks of gains for the major averages, and gaining once again on this monday, the s&p and the dow rising to a record, even though the gains were not that large, with corporate earnings, and economic data is what drove things higher. ♪

♪ >> you are watching "bloomberg west," where we focus on innovation, technology, and the future of business. i am cory johnson. some of the biggest names gathered in the sun at half moon bay, and emily chang, my partner, is there with the best of the conference. what? you are shaking your head? no sun still? >> i am cold. yes, a great conference. we are having a wonderful time out here. a really interesting conversation yesterday from the original members of the paypal group. the ideological spectrum, and peter thiel more extreme. one of the interesting things they were talking about is a founder's mindset, a founder's mentality, and peter said, look, if you want to have real change

at a company, you have to have someone who is willing to take risks, and oftentimes, that can only be the founder, so if microsoft wants to change, they would bring bill gates back. reid hoffman said they can make hard choices also, so i sat down with reid hoffman and asked, well, what about it? this is a company about to be spun off from ebay, where they do not have any of the original paypal founders. take a listen to what he had to say. >> to be successful, a leader has to say i understand these are the kinds of things that have gotten us to success and

that have worked so far, but this new thing, which could involve a lot of technical change or a lot of organizational change to get there, and you will not be successful without a founder to do that. >> i am surprised you have not spoken to him. other members of the paypal mafia, i have heard the same from others. >> it is a public company, because ebay is a public company, with the hiring process, so as soon as he could, he called me, and my schedule is also a little bit complicated, so we are having dinner in a few weeks, but he was talking to me about what the characteristics should be, what kind of person he should be looking for, and he

said, i think i met him in this person, but i have not met him yet. >> some people have said that paypal would be better off as a private company, that it does not need the scrutiny of being a public company right away. how concerned are you about that? >> i would 100% agree that if you said you're going to operate paypal for the next years, but doing it as a private company is better than a public company. however, the challenge is it is really difficult to get the right level of capitalization and the right framework, so it is not clear that it would work, but if you operated as a private company, you are not doing quarterly earnings reports, you are trying to figure out how to do a massive investment over the next few years, with a much stronger company in five years, as part of the problem with being public is that people say, sure, we want you to be public, but we also want your quarterly report to look good, and that

affects risk-taking and longer-term investments, and that is part of the thing that would be better for paypal to start out private, but they may not. >> how concerned are you that paypal will be more vulnerable to becoming an acquisition target, with amazon, even ali baba? >> i think it certainly would be considered an acquisition target. looking at what the strategies are, potentially acquiring companies, and i think there is a lot of good strategies for an independent paypal that can then have a network effect across these companies and create an ecosystem, so i think that is a good universe to play that way, but i think it is also a question of if you integrate it with a google, or maybe there are some complexities around ali baba, but if you integrate it, maybe something interesting would happen, as well. now, if you want my information, i have no information. i think they would go after the marketplace first. ebay. but if we look at how they are trying to play in terms of the global market, that might be the

first. >> i wonder if twitter is a company, and there has been a lot of talk about a management reshuffle their. is that a place where a founder would be in a better position to lead? >> i think take has a founders mindset. i think he is willing to take the criticism, and part of what you have to be willing to do is say, ok, i need to change this, and i think jake is doing that. this is a way of getting it in advance, so is himself a founder of companies. he is capable of making that kind of decision about here is the new thing.

we are going to that entirely these sorts of things. and there is's ability, and i think he is thinking about the strategy. >> why do you say at least? you're in a perfect position to know how difficult it is to grow users on a social network, right? and twitter's user growth is slowing down. does twitter need to be taking riskier bets? do they need to evolve the product faster? >> ev see the changes that is making, how can i figure my product strategy? and they were saying, this is the horse i am betting on in order to make that happen. >> so how do you feel about not

having made that investment now? >> twitter has always been one of the ones. when you say which ones would you wish you had made, and you did not, and i am still in the i wish i had made. >> can twitter go on like this, or is it reaching a plateau? >> i think it is primarily a set of questions around product modifications, and i am not privy to any of their internal -- their strategies could be great, could be different. i am just saying i do not know, but the raw basis of the asset can be built on that. >> so, interestingly, reid hoffman thinks that twitter can be bigger. we have talked about whether or not it has reached a plateau, if it is as big as again get, and he thinks it can grow and grow considerably. it is just getting the right people in place to make the

right choices. i am sure that is working on it. >> yes, they are growing, just not fast enough. emily chang in balmy half moon bay. coming up, internet entrepreneur and investor yuri milner. ♪

♪ >> i am cory johnson, and this is "bloomberg west." 2014 is winding down, and we have traveled all over the world to get a look at the innovations and technologies that are set to shape and disrupt our lives in 2015.

do you remember the holodeck on "star trek"? hd reality aims to bring 3d into rooms. no headset required. this is the year ahead. >> you are getting inside your mental image. i think this project is important because this can change the paradigm for how we deal with the 3-d and interact with your body. i am the director of the hyve 3d. >> on the top floor of the montreal lab is where the real world is slowly merging with the virtual world.

>> this is the hyve 3d. it creates a virtual environment by projecting it into an entire room. right now, the technology is primarily being used by design firms, architects, and automakers. hollywood animators are also getting on board, to storyboard fully animated worlds. trying in 3-d is actually a much more radical concept than you might think. let's use an example of trying to draw a cube in a two dimensional space. when you are trying a cube, you are forcing a perspective and tricking the brain into thinking it is seeing a 3-d object when, in reality, it is flat. it is called the brunelleschi approach. >> it is something we learned from the renaissance. we are in 2014, so we are looking at another way to represent the 3-d world.

>> creating that same cube in hyve feels less like a shape and more about building an object. >> there is my crappy cube. >> and there is no need for special headsets or glasses. >> it is inclusive. you need to wear something on your head. >> that is the hybrid part of hyve. it is the real you in a virtual space. you do not have to be virtually represented, and not just you, but anyone around the globe can connect with this virtual world. >> hello, professor. >> on this particular morning, we were connected with his colleague in france. >> collaboration is part of this, because it is existing on the server, and you can have people working on a project separated by oceans, so you can be lecturing without traveling, and you see the project or are inside the project, and you can see, ok, i am moving that wall, and i am putting it here.

>> hyve cost around $50,000, a lot less than competing systems which can run up to $1 million, and that is because part of the technology it uses is off the shelf. >> we focus on the experience rather than the technology. if we design a better user experience, that is more relevant than using another kind of technology. >> hyve is not about a bunch of new hardware. it is about a new way of reacting with the world around you, both virtual and real. >> where does this technology go in five years? >> mobility. you can be interactive. >> this is the latest expression of virtual reality, and let's be honest, these are buzzwords we have been hearing a lot about over the last decade or so, and maybe that is because they never really have fulfilled their promise.

the kind of creativity that can be unlocked when people are actually working together, actually collaborating, that is going to require a whole new set of thinking, a whole new set of rules. the technology is already there. the only thing that may be lacking is us. >> facebook, twitter, alibaba, and making the russian billionaire more millions. that is coming up. we sit down with yuri milner. can it really be the next silicon valley? ♪

>> welcome back to "bloomberg west." i am bloomberg west. hollywood celebrities walked the red carpet for the breakthrough prize, and they handed out awards to researchers focused on innovation in physics, mathematics, and science, and among the celebrities, emily chang was there. she joins us with more. emily, what was it like? >> in deed. everyone was excited about cameron diaz, and i will say our

production team especially, but this is a $3 million prize that goes to scientists and those who discover things in the realm of physics, and these are things that you and i cannot understand. the money is donated by people like mark zuckerberg and sergey brin and others, and milner was a doctoral candidate in particle physics and then went out, and he was always disappointed that he did not pursue the physics thing with as much success as he had, and i talk to him about the prize and the progress he hopes to see and what else he hopes will be discovered. >> i think we are facing a time when there is the funding, and it goes from people. and if they are not aware of the amazing things that the scientists are doing, i think we will have a disconnect. >> you are seeing a spot, amazon, google. are they the right companies to lead the charge? can they lead innovation like einstein and marie curie? >> i think the companies that you're talking about, they are really leading the charge in applied science, but this particular day is about fundamental science. what it means is that just out of pure curiosity, people are really working, trying to

understand how things work, and only then after many years sometimes, dozens and maybe hundreds of years it goes into technology, but the first step is really always, always driven by curiosity, and if there was no maxwell for maxwell's equations, we would not be talking about it. if you go backwards far enough, you will always find scientists, and then it is translated into technology, so this is about celebrating people who are basically the cutting edge of fundamental science and it is not because they are seeking personal rewards, but they are curious human beings.

>> out of pure curiosity, people are working day and night to find out how things work. technology. really always driven by curiosity. equation, and her without itl formula, there would not be radio waves and we would not be talking right now. enough,o backwards far you will always find the scientists who can see something early on and very much later in his translated into technology. is about celebrating those people who are the cutting edge. they are thinking about things not because they are taking

applications or personally want recognition, but they are just curious human beings. >> now, i know you are living in silicon valley now, though you do travel a lot. what is interesting with investment when it comes to technology? silicon valley or china, where you have invested in things like alibaba? >> well i think that silicon valley is quite ahead of the game at this time. most of the innovation is coming out of silicon valley, but i think china is catching up. are a lot of the innovative companies, including ones that you have mentioned, that are changing and are paving the way to come out and innovate. >> xiaomi is raising more money. be part ofwant to the next step? how can xiaomi part of a 40 million or $50 billion company?

all, we have never confirmed there will be a first round. is an amazing company nonetheless. -- xiaomi is an amazing company nonetheless. i think this is a subject for another time. flex one more question. if not silicon valley or china, where is next silicon valley? you are looking at europe. where is the next place. is that it isem very hard to reiterate this whole infrastructure, it is a combination of employers investors and venture capitalists, bugs, and universities. all it takes, you know, thousands of years to

build. it also, it is a without affecting it away to create this form prescribed. it takes dozens of years to put all of these various pieces together. so i do not go over the next silicon valley is. flex builder via letter? flex and has possible, though difficult. >> another? >> it is possible, though difficult. >> there may never be another silicon valley, according to yuri milner, a billionaire tech investor, and i am here with david kirkpatrick, the founder of a company who has a bwest byte for us, a number that tells us a real lot. >> the 375 people who came here for these two days, and we just heard from three guys, and mark benioff is tomorrow, and we are so excited about it. >> ok, david, thank you. back to you. >> emily chang, thank you very

much. enjoy the sun out there, and we will have more "bloomberg west" tomorrow. ♪ .

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