>> live from pier three welcome to bloomberg west where we cover innovation, technology, and the future of business. a check of your top headlines. congress is back for the first time since the gop's victory last week pretty likely incoming senate majority leader has a warning for president obama. likes working together requires trust. president obama has a duty to build a trust we all need to move forward together. not to double down on the ways of doing business. immigrationrd on

would be a big mistake. alsotch mcconnell criticized the agreement from the u.s. and china to reduce greenhouse gases. a executiveces change. the cfo is leaving and will be replaced by kelly kramer. revenue was slightly up showing the transition is making some gain. jcpenney is blending the weather for 1% drop in sales in the third quarter. they say warmer than usual fall hurt sales of seasonal goods. online sales were up. jcpenney posted a loss of $188 million. nation teaming

up. they will develop a music themed video service offering live performances and recurring series. artists include beyoncé and jay-z. it was announced starting a music streaming service as well. takinglead, twitter ceo on his critics releasing new information. 500 people -- 500 million people come to twitter without logging in. billion hit the upper -- his goal is to convert people to the instant timeline see you can see what is happening on twitter without having to follow people. investors sound like they liked

it. shares soared after the comments. of all these things they say whatre going to do stands out most? >> how many of them there are. they said we are increasing our pace of execution. we care about catering to diverse audiences. haveis the first time they given clarity and opened up the to do list to investors and said here is what we're thinking. wethey don't deliver, now have this checklist we can go through for the next few months and say did they roll out mobile apps, did they fix the login experience? lots to come. >> let's talk about these logged out users. i asked this question, who are these people.

what are they doing? take a listen to what he had to say. >> we know and measure how many people come to our properties and don't login, and what they do. we have an understanding of why they use the site and service. the same thing goes to the syndicated audience. we measure how it grows. >> 500 million logged out users. 284 million users logged in. they more than double the number of people. is the goal to get those people ultimately to login or can they monetize that? >> it is both. they want to get people to login. the process for creating a twitter account and coming up with the followers has been tedious that they were announcing this instant timeline feature. a new twitter user will come on and have a timeline set for them so they can begin to reap some

gains. you mentioned 125 million users come to the home page. the homepage now is an ad for twitter and nothing else. there is no here is what is going on, that shows people why they should go into the top right-hand corner and login. they want to bring people into twitter. thatalso want to pop profit off of the ways people are using it in the media, on tv . >> what has been the reaction from investors? exhibit on the phone with people all day long. do they like what they hear? >> they like it in theory. they want to see it happen. give clarity on what you plan to do. how much confidence they actually do it? excessivehad management turnover. there has been internal bickering for years over the simplest things to change.

they said these things but what is it going to look like? >> i talked to reid hoffman who knows what it is like to grow users. he expressed confidence and that he should not be listen to the critics about management and should be keeping his eye on the ball. >> i think he has a founders mindset. part of the reason he is doing the reshuffling is he is willing to take the criticism. part of what you have to be able to do is say i need to change some things, i'm not pointing to criticism, but i'm going to ignore it. >> he knows about the critics but he is charging forward anyway. how much confidence do you have? this is one of those guys who does hear the critics. critics twitty get him all the time. is sticking to his

guns. he came out and did what needed to be done. there are people on two sides of this. i talked to people, and they confidence in dick. others don't have as much confidence. with people on both sides, he is much beloved there. thank you. what is taylor swift's against bona fide? what does it mean for the future of digital music? pulled her albums off of spotify calling it a grand experiment blaming streaming for a decline in sales.

can the move do anything to slow music moved to digital? keith, take ath look. >> i think she is going to be in a unique position as an artist. she is able to go ahead and see spotify and speak in a loud voice that change has to occur when it comes to current financial notches. the model has to consider what is really happening not just to download but to fiscal sales. upset the artist really spotify and the inability to get revenue? spotify says they are paying the labels but artist said they're not getting enough money. >> throughout history, artists have not always got enough money. the challenge right now is that we have always had a technological ability to really

get down to who is doing what. it really should come back to them more. i do think the ceo of spotify made some mistakes with piracy versus their service. young people we are talking to are not used to being called pirates. this is music and they did not grow up with a lot of stuff. they grew in the age of napster and downloading music and getting music there to go ahead and call them pirates is not really saying it correctly. at the same time, you have artists like tailors left who are powerful and transcend all of pop culture, where people will go and buy fiscal goods. that changes what your manager is taking advantage of. >> a guy we used to work with, quincy jones, is also out there, thank spotify is not the enemy and piracy is. outside of what you call your customer, is that the issue and is that the alternative to

piracy? light snow. you think about radio, it has been going on forever. that is not piracy. back in the day when you grew up, you used to record things right on cassette. the issue is right now, you has a service like spotify that makes a good amount of money. they have done a great job growing 50 million users over 13 million subscribers who pay $120 a year. how is it proportions directly to artists? taylor swift is one of those artists. one of the few artists that can really do that in a powerful way. like she has pulled all of her albums. jason l dean has pulled his latest. can you imagine a hybrid model? does every artist has to do this the same way or can some just

choose? i will not allow myself to play on pandora. some artists say, look, i want to embrace it. >> a couple of weeks ago, we got together with a number of managers, including the gentleman you just mentioned. they formed a company called maverick. what they will be able to do from there, they will have more leverage when they have these discussions. in those discussions, they will discuss things like different types of payments and promotional things that allow these types of artists that have power on a more equitable basis than some of the things going on with streaming. ♪

>> welcome back. i'm emily chang. scientists made history on the service of a speeding comment 300 million miles from earth.

an ambitious attempt to death a -- attempt, a decade in the making. they will start gathering data by taking pictures, drilling into the comment, and sampling chemicals, and more. how groundbreaking is this? joining me from skype, the chief engineer. cory is still with me as well. how difficult is this question -- this question even earth, is moving in space. how hard is this to do? >> difficulty cannot be overstated. this is an extremely citing day and the european space agency, with the rosetta stone scratch, just accomplish an extra 90 -- an extraordinary feat. it is still playing out. they just made its way to the surface of a comment only hours ago. it is right in the middle of returning its first data. >> what kind of data are you

looking for? what will teach you about what you're trying to do? >> is the first time in history we have actually had something designed to go down to the service of one of these small bodies and really study it's surface. from planetary resources, we are interested in the resources of race, particularly things like hydrogen and oxygen. that is where, to get details from. what it will actually be uncovering is just what is a made out of and what is the structure? what is the surface like? today, we're seeing the real thing playing live out this morning. >> this was done by the european space agency. what about nasa? should we be concerned nasa did not do this? >> nasa actually has a number of incidents on the spacecraft orbiting the comment. -- the comet.

but europe, the european space agency, does get most of the credit for the success. nasa's plans also include going to two asteroids in the future. they will rendezvous an asteroid just next year and also returning a sample from one. it is not just the u.s. either. the japanese space agency, the russians, even the chinese just returned a mock commission from the moon. space exploration and understanding the sources of is really growing to be more than just a united its effort. -- united states effort. what we are excited about is more than just a government effort. >> to that point, an explosion on the launchpad. i was shocked to read the next day that you have something in that spaceship that did not make it. talk about what kind of a setback that was for you and where planetary resources extend now? >> the spacecraft fleet built, a

prototype of what we're are doing for asteroid processing technology, what on that rocket that didn't make it this far, for us, it is disappointing, but it is really part of the game. he's things happen and if you do not plan them, you do not know the business. we are already scheduled with our next phase kraft and our -- spacecraft for our next launch, 10 months away from now. >> all right. a spacecraft landing on a comet.g up next, it is no joke. will ferrell's funny or die is sale. a possible ♪

>> welcome. i am your host. my guest today is bradley pitts. thank you for joining me. >> my pleasure. >> how old were you when you lost your virginity. zero? i will tell you when i lost mine. >> would like to hear that. [laughter] >> is the first time i've seen this. it is just so funny. you do not even have to hear what they say. it is just so funny. >> there is a moment where he asks if he has trouble keeping a tan and brad says why, and he says, because you live in your wife's shadow. >> as funny as it is, funny or die is getting serious, hiring a financial advisor to evaluate it's options.

joining us now via skype, the funny or die co-founder is now the ceo at wtf studios. thank you so much for joining us. what do you make of funny or die looking for a sale? what does it say about the evolution of the business? >> i think it is very significant. it is one of two youtube content places on the web. when we started in 2006, mark came to me and said, i really think there ought to be a comedy set on the web. his son is an -- comedy site on the web. his son is an aspiring comic and said, we should do that. we said, that is great. we can create it but we need the content. we reached out to michael and he placed us in touch with gary sanchez productions, will ferrell, adam shea, and they were open to the idea. we set it up and shot a few

videos and in april 2007, we launched it. we did not go on youtube. we sent out 10 e-mails and we put that film up, the landlord, will, the lamb lord being a three-year-old girl. adam's daughter. we thought, people will watch it. amazingly, three days later, we were getting 300 million video views in a day. that is the cause of the hard work of a lot of people. incredible. >> we were looking at the video, 10 hours of the man in new york walking around. who do you think possible buyers are here? >> i could not comment on it. i was on the board of directors until last year. i stepped down because i started another comedy company more , of an urban comedy company

with a few of the wayans brothers. i am not privy to the negotiations, but i think there are a lot of people who would buy them. >> is there a notion this is the direction of the company? a very big site with a lot of contributors and content, and that it would stand alone? >> i think they just wanted to build something to entertain people there at i think they hired on andrew, the head writer at saturday night live, and mike, doing a lot of production. tick has been amazing over the last several years building the company into something big. i do not think it was ever thought we were just building it to sell it. it was thought we would create a destination site that is comedy and has people like zach, who is amazingly funny. we get to a point now where they are producing tv shows and commercials, and it has basically become hollywood 2.0.

it is the next generation of what is happening in hollywood. >> the best asset they have is they have the ability to do click turnaround, top will -- quick turnaround, topical comedies. that they can produce something like a man wandering around in new york city, even the next day after the viral video hits. they have a large staff, a tech staff up in silicon valley and down here in hollywood, they have all the staff, and they are really the go to place for people who want to go out and build some brand. the assets they have at their brand, funny or die, it is all the people who are there who are able to do the things no one seems to be able to do. >> all right. the funny or die cofounder. we will watch to see how this plays out. funny or die is apparently up for sale. with a company like google to deploy robots, i talked with

steve. a great interview you do not want to see coming up. -- you do not want to miss coming up. ♪

? >> i'm emily chang. this is bloomberg west. as 2014 comes to a close sam grobart traveled allover the world to get our audience a look at the technologies and innovations set to shape and disrupt 2015. we are talking about drones. airbus is developing a solar powered raonic and stay up in the air for long times -- long periods of time. this is the year ahead. zephyrreek mythology, was the god of the westerly

wind. today, a modern zephyr glides through the skies. powered a solar aircraft. through the weather. >> it is a high altitude pseudo-satellite created by airbus. what they can do from 200 miles away. they are in a constant rotation around the globe. the zephyr operates at 65,000 feet. that means they can remain above a specific location for extended periods of time. >> it is a cell phone tower in the sky.

>> it has the potential to disrupt many industries, from indications to whether to surveillance. to pull it off, it needs to stay in flight for as long as possible. un. the is the s lightweight carbon body is covered in flexible solar panels that power small electric and use. keeping those light is the challenge. >> the large solution with large wings, the factory that charge up during the day, and when the sunset, the aircraft is then flying only on the battery throughout the night. >> the later the aircraft, the longer those batteries last. engineers are constantly trying to make this later. -- lighter >> some will be . disappointed at how they are too heavy and we will look to see how to design a more lightly. >> this is from the aircraft. not only is it phenomenally light, it is strong, so we can

we can make it lighter. half the mass, a state-of-the-art photocell. we have watched the game and improved them in half. yet again. >> a ground crew can direct the flight path but the zephyr is autonomous. airbus will use this to fill the gaps where radar aircraft struggle. it operates without fuel, so it can provide continuous, local coverage, for a fraction of the price. >> the target is that we stay round about $1000. >> because of its low price, it can help extend the internet to parts of the world where high cost of proved to be a very -- a barrier to productivity. >> leaking go to a good goodu can go from capability with one platform. the abilities to develop new

services in companies that have none. >> google and facebook have announced their own plans to have airplane like drones to spread to new places. airbus is not worried about the competition. >> we are quite happy about the interests of google and facebook. it proves we were right to believe in the market. they are very much where we were a couple of years ago when it was a bit more difficult to do this kind of flight. >> connecting the world is a very global aim. we have gone through the concept that nobody can work. -- to know that it can work. >> for decades, we considered outerspace as the next location for endeavors. launching satellites and rockets is expensive and hard. what zephyr shows is our future may not be up in the stars, but just above the clouds. >> bloomberg businessweek's sam right there. be sure to tune in for the year

ahead special airing tuesday, november 18, 9:00 p.m. eastern and pacific. we will look at 10 innovations that will change everything you know about technology, food, and medicine. and coming up, talking about a future of robots leading us down a path to tragedy or nirvana. what direction are we going now? we are told next. ♪

>> you are watching bloomberg west. i'm emily chang. anve jarvis and is known as enthusiast for space exploration and robots. i spoke with him about advancements in robot technology and artificial intelligence and

the impact it will eventually have on our everyday lives in part two of my interview with him. five and 20 or so now, take a listen. >> in five years, i think we will see more. -- seymour autonomous cars driving. we would have a lot of those cars on the road already, and in five years, even more. we will see. robots can do amazing things. in 20 years that are other robots in the workplace replacing mundane human labor that will have a dramatic affect on the labor pool. they are being hired by the hundreds in china to replace workers who are sedentary, doing one task all day long for their entire career. mindnumbing work. robots will lower the cost and people realize every manual task

will be eventually done by robot. >> there are conflicting opinions about how dramatic the change is going to be. there is an extreme scenario where we have to worry about human extinction. >> that is right. i just heard the word extension. human, could be tragedy or nirvana. it really is a break in the path of the road we are facing. you could paint a picture 200 years out. no one debates if it is happening. by then, it will have happened, where robots can do anything humans can do. it will be effective and accurate. what does that world look like? it could be a world of abundance. i mean any physical thing, potato, if for artie -- a for -- a ferrari, everything costs the same to make. robots could do our bidding,

almost like slavery in the old signs, which we would not like to do with humans come but imagine. what would be indentured rich do? havinguld not think of jobs. they would live a life of new abundance. another is a really ugly transition from here to there. on the path, we are losing jobs. the rich are getting richer and the poor cannot find work. eventually 80% unemployment, what does that world look like? and if you made them put -- need employment to live. that seems to be the path we're on right now. >> you think tragedy is more likely. >> i think that is the current path we are on. hopefully in clinical and economic circles and technological circles, they could change that up by saying, that is not what we want. >> what changes it? regulation? is it could, but i would not bet

on it. i do not see a lot of foresight happening. it is a system meant to be great -- meant to be glacial. the more likely path will be innovation for entrepreneurs. can we provide the basic human needs, food, shelter, health care and education, almost for free. health care is the one, and that is one thing i want to invest in, to try to figure out a way to provide free health care. right now, why would you want to do this? there is more money to be made in dealing with the existing health care system do try to fix it. it is a strong motivation to think of a cell phone-based interactive system that could help diagnose and cure most diseases which involve medicine, nutrition, and providing that service could help stave off what would otherwise be a fearful moment for those who cannot stave off health care.

>> google building driverless cars. >> google is going heavily into this. google cell phone element, android. his love is robots. they acquired a number of robots companies. the vast majority of google employees have no idea. that is interesting. i do not know for sure, but i have suspicions. what i believe strongly is even if they never release these products, the development and engineering trajectory they're going through is evolving technologies, deep learning and machine learning, that is applicable to many different things. it can make people better at matching. it could be used to make an autonomous car. it is a domain independent capability. once you get better at being intelligent, you can do a lot of things. that is what google is doing.

>> how worried are you about the power google has? >> some people are more worried than i am. i am looking for the opportunity to invest in others so it is cost-efficient. -- so they have competition. i normally think of it as, it is great. you have goliath and you want to invest in david's. you will hopefully overthrow that vision. the only thing that worries, they do not typically worry about surpassing humanity. to build things that make humanity look like the path of evolution to greater and greater things. a lot of humans want to root for humanity. a lot of folks are little bit frightened by that cavalier attitude. >> you are on the board. tesla, spacex. is elon musk afraid of anything? >> he is afraid of artificial intelligence. to say hey, something smarter than humans. that to him is folly.

he wants a multi--- planetary species. if something goes really horribly wrong, natural asteroids, or technology run amok, have mars as a backup. >> what about talk of a partnership between google? they are good friends. it is an unusual relationship. >> partner steve with me there. coming up, black seems to be the fastest-growing software of a service company ever. i will speak to see on an special growth coming up. ♪

>> welcome back. i'm emily chang. $1.12 billion is the valuation of a nine-month-old e-mail collaboration start up, the the start of everyone is talking about these days. founded by a flickr cofounder, now has 73,000 daily active users and 30,000 teens using its software. how did he go from time startups to one of the hottest startups in enterprise technology? joining me in the studio, stewart butterfield. first of all, how can a company

nine-month-old possibly worth -- be worth more than $1 million ? >> that is a question. >> what justifies it? >> the trajectory. we are still -- -- we are still growing. firstt announce our marketing higher. on growth so far has been the basis of people recommending it. jobow does slack make my better or easier? >> two ways. this is in contrast to an e-mail based comparison. one is, i get way too much e-mail. having those messages directed to channels or groups rather than individuals, that helps. the other thing is, when you start a new job, matching having

access to the last 10 years of the history of the company rather than an mdm box. -- empty inbox. that is one of the big things. it increases in value over time. in contrast to an e-mail based system. a separate inboxes, and it basically just evaporates. >> a lot of investors have said to me you have to check out slack. we knew it was happening. i hear about it all the time. how much of your customer base is tech savvy silicon valley startups that can innovate this easily, and how do you convince the big conglomerates that may not be so nimble and open to change? >> it is going to take a while. i am 41 years old. there will be generations that come up based on this. one of the reasons you hear about it is we do well in tech, media, creative industries.

that helps a lot. their portfolios using it. there is excitement. same thing for the media. >> who is the competition? some things overlap a little. like we don't really have competition. i don't mean that to be a loop. when we asked customers what did you use before, 90% will say nothing. they may beer, using e-mail, google hangout, skype. people use private facebook groups to run their basis. it is a crazy mixed. unlike starting a salesforce today or starting a sales team, you will choose a crs.

you will get started before that. you can get started. that is the way everyone thinks. should choose a system for internal communication. you do what ever it was last time. >> you have been doing this a long time. you have a lot years to compare the environment to. what is the difference in the availability of funding compared to when you were building flickr? >> we started a company with flickr, it was 2002. your member, and ron, 9/11, the -- you remember the.com crash, 9/11, the absolute worst point. the nasdaq was off 85%. it was impossible to raise money for stuff, so that is why we pivoted to something that would be simple and easy to complete. that happened to be flickr.

>> do you worry, they have sounded the alarm about startups raising too much too fast revaluations are too high. mark andreessen says they may vaporize. you worry? >> i do. my dad was a real estate developer. i graduated from high school in 1991. into that recession i was in this industry in the first dotcom crash. we are in a solid position. bill and mark, and fred were talking about the high burn rates. over $1 million in recurring revenue each month and spending $300,000. we are in a good position. >> how do you weigh how high you want the valuation to go, how much money you need to take on

from investors, without taking too much? >> there is no magic formula. it is a gas, a hedge of what might happen the next couple of years. fars impossible, but we are from the bottom. i am one of those people who think the other shoe is yet to drop from 2008. if we have $120 million on the usance sheet that puts in a good position. >> you have a rainy day fund. thank you. we will keep our eye on you. it is time now for the bwest byte where we focus on one number that tells a whole lot. 1,100,000. the company that monitors illegal peer-to-peer activity, taylor swift's "shake it off has been illegally downloaded 1.1 million times in two weeks along. with spotify, saying, you cannot stream the song for free. that is 1.1 million times she

did not get paid because people are streaming for free. >> how much were her other albums in? -- albums pirated? is that higher than when her music was on spotify? >> if there is 1.1 million downloads of it alone, you have to assume the rest of her albums are at least 1.1 million and one. that is the issue. when consumers showed a preference for streaming and musician is not getting paid in the way they want to be, there is a tension there. consumers are here and the artist is there and that will have to be resolved somehow. if it results away from spotify, it will resolve illegally. >> i only buy music when my son wants to hear it on repeat 20 times in a row. taylor swift whenever i can. i cannot get enough. >> thank you offer watching this edition of "bloomberg west. we will see you later. ♪