>> live from pier three in san francisco, welcome to "bloomberg west," where we cover innovation and technology, and the future of business. i am emily chang. check of your top headlines. the year ahead summit at washington, he sees a steady state of m&a. >> the fundamentals are there. cost of capital, liquidity, ceo confidence, supporting a lot of growth initiatives and so on. he also spoke about

jpmorgan's role in the record-breaking alibaba ipo. joking that he worried about it for two years. the house has passed a bill in 252-161.one pipeline it now goes to the senate. music streaming services are under fire, with taylor swift offling all of her music ic spot of five. ify. >> consumers want to rent all music in thethe -- world. with the downside of that is that you've taken the value from a song. whetherigger issue is

services are training people to think people is free. -- music is free. e six and six plus went on sale at midnight in brazil. now to our lead. alibaba has just sold $9.3 billion on singles day, but the chinese e-commerce giant is about to tap the u.s. bond market for the first time coming as soon as next week. they will use the proceeds to refinance the credit line. now?y tap the bond markets

low interest rates? bloomberg ipo reporter leslie joins us now. good be in a better position after the biggest ipo in history . >> they are a company of big numbers. many billions of dollars in transactions. now is a great time to refinance their debt. they did that to buy back their state from yahoo! in 2012. they are refinancing the debt because it is a good time for them to do that. however you also have to wonder what they're going to do with all this cash. discussion of what they're doing in hollywood and on the payments front. -- the question is if there is any indication of things coming. >> reid hoffman suggests that

interested inbe ebay and not paypal. what do you think of the potential for big deals like that? ma, ebay would be the crest of an actual opposition. -- acquisition. i think ebay would be an interesting play in the u.s.. alibabay would do for is a big question, is the synergy there? how do you integrate those two business models. that is the question. >> the e-commerce market in china is potentially reaching its peak. how do they grow?

they have all of the strategic toestments from hollywood pharmaceuticals. which of these is likely to become a big business? >> what they're trying to do right now is to diversify. the diversification, by doing that, that will then lead to further growth. market in china, i think it will slow, so to smart look for growth in other areas. bonds are past rated a plus, and twitter is now rated bb. this comes two days after twitter promised a suite of new features. what does the company need to do to win back investor confidence? is the former

head of let format twitter -- platform at twitter. why exactly are these unsolicited? has a real-time social networking service at scale. great brand recognition, and good ebita margin. but the company is not turning positive in cash flow. relying on cash on its balance sheet to fund the operation. twitter shares dropped on the back end of this report. what is your reaction to the end of this report? our to put myself on their

position, this is not the important conversation, this is noise. i would want to continue to grow my audience. it is a dramatically monetized audience, and there are still a ton of opportunities there. >> this is just noise, have you respond? the way you should think about a credit rating is a reflection of the underlying business trend. twitter is doing the right thing. they are focusing on the business. if they have the mentor they want, if they want the cash flow numbers they are looking for, the rating will move with it. >> we were following the shareholder meeting, a lot of product denouncements -- [r announcements. what stood out to you? they're working to

get the message out there, and it was pivotal. great to hear them acknowledge their most important goals. people around of the world who have heard about this. it is a product that is valuable to one billion plus users. >> what is the single most of for thing twitter needs to do to win over wall street? >> at this point, from a credit of, -- credit perspective, cash flow generation. generate more

than $100 million by 2060, and we could see a slightly higher rating. >> who is the product visionary at twitter? >> i think it is going to be a group. peopled a great group of . impressed by the articulation of focus of what they are doing. thank you so much to both of you for joining us. companies disrupting the real estate and travel industry. ♪

>> we turn now to the year ahead conference in washington dc where we are bringing you insight on the industries, companies, and trends that will matter most in 2015. we have a very special guest. the manhere now with who knows disruption. i don't like that word. what we're going to talk about is your principles. whether we're talking glass door, zillow, you have this notion of power to the people. what do you mean? a fundamental human tendency to want the information required to make decisions, to want power, to tear down the wall that separates you from the information. , glassdoor,, zillow

i see the ability to take smart phones and computers and plug them into world information and empower people with that as a really fantastic as this opportunity. i have created multiple businesses to do that. >> you do not think the employee or the user has the power to do that? >> this is all about taking control of your own governance and that kind of revolution is happening because of technology. the biggest story in the business media is about bill gross. paid $290 million in 2013, when they did not even have great performance. in the glassdoor world, how would things have turned out differently 10 years from now? >> we have 23 million people a

month who come to glassdoor to see how much money people make it do for companies. rating.a ceo approval interview questions, one of his like to work there. it's a very high-end. that is very public. having democratized or transparent salary information might actually mean that women in the same job as a man might get paid as well. >> you have changed the way consumer behavior is, at least in some industries. how about apple pay? what impact will apple pay have? >> i have not been able to use it yet. the way apple moves into an industry that has been kicked around for a while and they do

it right when they and is pretty interesting. i would not against apple pay. i use it for one of my credit cards right now. i look forward to spending with it. one of my issues with apple pay is that i don't think they are really disrupting -- they are not evolving the way credit card payments actually work. along under this very profitable layer of 3% of all of our transactions and taking money from that. i would rather see a payment vehicle that is more like alipay pay where iy where it is near frictionless. >> is there a risk to the consumer if we go frictionless? we could see americans and more debt than they currently are. if you are not opening your wallet saying, wow, my over cost $30, is there a risk?

>> i think that's always a risk. however, the fact that we are getting notifications of what we are spending, this device can be a smart financial advisor for us. that would lead me to believe that we won't see that. it can end up back in the consumer's pocket. over the next 5-10 years, we will get there. >> if there is something you could create next, what you want to do? invested in ajust very interesting company in new york city called arc. we like to buy art. we have been frustrated by their

not being a real marketplace for us to go to to shop for art. we own lots of pieces as well and it would be difficult for us to sell. it connect galleries and buyers andelectronic marketplaces brings them together and brings transparency in the power into the marketplace. i realize that his niche, but this kind of liquid transparent marketplace will make art much more accessible and a much bigger business. >> i would need to ask you what you consider middle-market art. the price would break everyone's heart if you told us that number. thank you so much. agree?t you >> thanks for sparing us. it is friday. do nasa come netflix and coca-cola have in common? they all rely on amazon web services technology.

we talked to the amazon cto about how it's changing the future of ip for some of the biggest companies. ♪

>> welcome back to "bloomberg west." amazon web services provides cloud storage to thousands of companies. cory johnson spoke with the amazon cto at the amazon web services conference in las vegas. >> we power most small or medium businesses in the world these days. you see large and a prices and developers -- enterprises and developers for startups all here. the non-techsed by

companies that are here. coca-cola and procter & gamble. agility these days is what it's all about. digital technology will make this more competitive. --se companies you actually know more than a lot of our viewers understand. someone stop me in the hallway -- you have to talk about lambda. developersbility for to not have to think about infrastructure. --y can take a piece of code

it's revolutionary. they don't have to think about sits or whatcode it si service they have to use. platform.d if-then if this happens, that outcome happens. everything gets recalculated. >> things can happen in the business application as well. if you upload them in a document or the internet of things device one ofenly, you get those lambda functions. >> you guys have added over 200 features this year.

>> over 400. >> amazing. how do you -- your kingmakers in that way. you could wipe out someone else's business. how do you communicate that with your partners? really important to work together with our customers. we are really customer focused. we are driven by the feedback of our customers. they also have great influence ow our platform evolves. we are extending -- offering services so they can extend it as well. we work very closely together with our partners to make sure we develop software they can use themselves. >> we have entered a place with

-- there are new types of services. >> because the breadth of services we have allow our developers to really focus on building new stuff instead of redoing all the other stuff. i.t. does not matter. we all have access to the same services. now, we all get to focus on building better products. >> i think about that with companies like google or netflix. they don't have to worry about that stuff because it's happening -- aws.tflix runs 100% on they don't want to worry about infrastructure. they want to build the best

streaming service. they make use of our platform to reach a global audience. >> more on aws. the man responsible for glowing growing it into the huge business it is. ♪

>> you are watching "bloomberg west." i'm emily chang. major changes at message board and sight read it as the company tries to become a more viable business. -- message board site reddit. he left over a disagreement over where to locate a new office. the reddit cofounder is

returning to the company full-time as an executive chairman. and we'll head of marketing, strategy and communication. he's the author of five new york times bestsellers, the man behind the tipping point. one of the most influential writers of the last decade. most recently, he has taken on a personal war against the nfl. for thewn with gladwell latest edition of ceo 1.0. one of the subjects he wrote more recently about was the nfl. only poor athletes willing to pay the game. the sport could become obsolete. settling withen former players. are they doing enough with current players? >> no. i think the sport is a moral abomination.

they're try to estimate what percentage of retired players will be in need of some kind of assistance, medical assistance from the league. the came up with a third. when you watch football on sunday, they are incurring injury which will significantly impact their life. can you point to another industry in america which in the course of doing business maims a third of its employees? this is untenable. we are talking about brain injuries causing horrible protracted premature death. the idea that we are paying people to engage in a sport for our own entertainment that causes irreparable damage to themselves is appalling. >> what about how the nfl has

handled the domestic violence issues? >> this is a sport that is living in the past. the has no connection to realities of the game right now. no real connection to american society. -- whole ray rice issue was they are completely disconnected from the consequences of this sport they are engaged in. they are socializing young men into a culture of violence. is it all surprising that you see the kinds of corollary social damage surrounding players? not surprising at all. they are off on this 19th century trajectory. >> your friend bill simmons called the commissioner of the nfl a liar with respect to the ray rice case. he ended up getting suspended for three weeks.

was that the right decision? >> no. totally wrong decision. it is a sports columnist can't call -- can't exercise free speech -- it's not like it came out of nowhere. fromeasonable conclusion the whole ray rice saga was that the commissioner of the nfl knew about the videotape and lied about it. i'm not saying that's what he did. i don't know. it's a reasonable conclusion. in the course of expressing their opinions, sports columnists are allowed to draw conclusions. apparently not. apparently you get suspended for that. i thought that was no management. >> do you think the ball goes away -- football goes way? up --will start to triple

triple up at the high school and college level and then the program will on the mind. boxing was one of the biggest sports in this country in the 1920's and 1930's. where is it now? sports don't exist forever if they cease to have some kind of compelling narrative. football's narrative is falling apart. >> be sure to tune in for my full interview with malcolm gladwell on studio 1.0 tonight at 5:00. emerge, it would have never been possible without cloud computing. what are some of these features and how is aws attracting even more customers? cory johnson spoke with the vice president. companiesall these have had these infrastructure

startups where they've had to have their own people run servers. your best resources in some copies are software and chairs. it hardly ever differentiates your company. those engineers can instead work on your business. that is a huge advantage. the infrastructure people will move up the track and add value. >> this may be one of the most important technology companies in the world. they can make or break someone else's business and empower all sorts of other things. >> this is the third year. we did not know what to expect our first year. our customers have really loved it and it's gotten bigger every year. first year, we did it for 6000 people.

this year, we have 13,500 people. apart from launching a number of services here, the primary is ane of this conference education and learning conference. our goal is that people are able to go to classes here and learn about what people are doing in the cloud and take it back to their company and change their business. >> you must encounter so many bizarre uses of aws. think of one. unimaginable stuff. >> there are so many incredible uses. research wanted to run on 10 million cancer compounds to see if they could identify markers that would allow them to solve one of the problems they are trying to solve. typically, to run that type of analysis, it would cost $50

million. towould take them 89 months do it because it's a huge amount of resources. using aws, they did it in just eight hours for $4200. >> well. -- wow. >> so many interesting and inspiring uses. the things people are doing on top of the platform. in las vegas.n would you drink water from your toilet? what of california's biggest counties is using science to take water from toilet to tap. problem --the drug will it solve the drought problem? that is next. ♪

>> i'm emily chang and this is "bloomberg west." with 2014 winding down, business week traveled all over the world to give our audience and exclusive look at the technologies and innovations set to shape and disrupt our lives in 2015. using science to fix california's drought problem, a solution might be closer than you think. in boards county, the system is transforming the way water from the home becomes drink water in just minutes. this is the year ahead. -- in orange county. >> southern california is in trouble. there is not nearly enough water to go around. even though the region sits right by the pacific ocean, turning that ocean water into something usable costs way too much. the entire area sends

1.3 billion gallons of wastewater out to see every day. one place has a solution for both of those problems. gigantic scientific instrument. it manufactures drinking water on a massive scale. >> six miles from the shores of orange counties groundwater replenishment system. it takes water flushed down the toilet, cleans it, distills it and returns it to the local water supply. >> the project produces 70 million gallons of crystal clear fresh drinking that we serve to 4.2 billion people -- 4.2 million people in orange county. >> they did it because they have to. >> it was formed 80 years ago. are 3 million -- >> something has to give. more conservation and less usage

or that in combination with what we are try to do. find another source of water. >> wastewater goes through a battery of filters and purifiers to remove anything that is not hydrogen or oxygen. the first step is called microfiltration. >> they are there to pull or suck the water out of the individual basis we see and strain it through a hole that is small enough that we can remove the larger particles. are about two microns in size or 1000 times smaller than the diameter of a human hair. the water is filtered again using reverse osmosis. >> we take the water and force it through a solid plastic membranes of that bacteria and viruses are left behind. the only thing that can penetrate that membrane are the oxygen and hydrogen molecules. >> just to be extra safe, there is a third stage. >> we put it through ultraviolet

light. an additional layer of protection. it will destroy any organic molecule that may have escaped. >> whatever is left, this will catch it. early 2015, this plant will deliver an additional 30 million gallons of clear fresh drinking water per day. critics of water recycling have called the process toilet to tap. orange county has an on-site lab that can monitor water quality. what matters most is that orange county's residents feel comfortable drinking this water. there is one way to find out. >> bottoms up. water.es like >> all water we drink today is always recycled. there is no new water. it's the same water that has been here forever.

it's easy to walk away with two seemingly incompatible reactions . optimism and frustration. the optimism comes from seeing the signs and technology. the frustration comes from seeing the lack of political will in some communities to address the water needs with sensible solutions like this one. orange county's project costs a lot of money, but it's less expensive than the alternatives. eventually, all that water would be gone. >> bloomberg businessweek's sam grobart. be sure to tune in for the year ahead special on tuesday, november 19. -- november 18. bottom line coming up at the top of the hour. mark is with us now with a preview. >> more big names from the year

ahead conference. we will examine the regulatory bankronment and what ceos are bracing for. >> happy friday. more of "bloomberg west" up next. ♪

>> welcome back to "bloomberg west." dropbox recently announced a partnership with microsoft making it easier to edit office documents. edit office files with the tap of a button. the feature will be available on the web next year. i spoke with the head of product conference.nomy what the partnership means for dropbox users. userspbox has 30 million

today. a lot of them use dropbox to get work done. office documents is a lot of office document. creating awesome experience around office and dropbox working together. they can take the office documents and edit them on mobile devices and on the web. how does it help dropbox's business? >> the more productive people are, the more engaged they are with the service, the more utility they get out of dropbox. >> another big move by microsoft is making office free on mobile. how big of a surprise is that to you? >> i think it's incredibly valuable to people who want to be productive. getting access to the best product there is is exciting. it's an incredible move up for them. the interesting things

i read about dropbox is you are part of the shout oh -- shadow ip phenomenon. it's not officially used by my employer. how do you come out of the shadows and how much of that is part of your strategy? >> we have incredible success with our business product. growth in the u.s. sector alone. like hearstompanies and news corp.. there's something like 40 million unique businesses using dropbox today. security andll control they need to manage their business on dropbox. >> what is more challenging, the consumer side or business side? >> all of them are incredible opportunities. it's all really exciting for us. >> what is the most challenging?

where are you finding the most resistance and try to break through? >> we see poll from all the instructions. people want the solutions because universal access to data, being able to get to her stuff on mobile that's your stuff on mobile. our biggest challenge is delivering more experiences to people. both of those are incredible. thought ofhas been as consumer first. what do you want us to think? >> think of dropbox is a place for your most important stuff. your important stuff is your documentsife, your and your work stuff. i want to go to work and share an excel's breac spreadsheet. it's really easy.

it's about simplifying your life whether you are using it at home or work. the consumer side press has been great because we have 30 million people in the world who are dropbox users. that allows us to get to wherever they are. >> copies like google are dropping the price of storage to free. >> it's about the end-user experience. sinkg the best in class and building great experiences around document collaboration. which is what we are doing. it's about being the home for people's most important personal information. it's really about the end-user's parents, the high-quality system share some the trust people have -- we will always have the data for them and keep it to care. it's about all these experiences. >> what kind of additional features are you going to add? and employeess

one is the ability to analyze and organize and share with teams and connect teams. >> for the business, we have launched a number of really important controls around document access and document sharing. really thinking about the collaborative spirit is on the stock miss. collaboration is a big part of what we are going. weather is our partnership with microsoft or harmony, all these things are going to build more about -- around productivity and collaboration. are tof our efforts create this place for all your memories. >> i'm a huge carousel user. i want to sing this microsoft partnership is a huge win for dropbox. is everyone is saying th microsoft partnership the huge win for dropbox. >> our core focus is expansion. we are going global.

we are opening up in sydney and tokyo and london. we are expanding the business. investing in products and is better experiences. growing the organization. >> the dropbox head of product. ibm's ceo is having a bit of trouble leading the turnaround after the software giant -- she has been brought into one of the most exclusive clubs in the world. invitationended an to become a member at augusta national golf club. the third woman to become a member. oft does it for this edition "bloomberg west." i will handed it over to stephanie ruhle in washington at the year ahead. over to stephanie ruhle in washington at the year ahead. >> there is a margin conversation. something like an app and thinks

-- thinks it can leverage. things it can leverage. our 18 consecutive quarter -- if we exploded to 10 billion over the next 10-24 months, we still would not put our competition out of business. company five times -- i think we definitely have the best technology. the product has evolved into a a oneigger idea that just trick pony. >> it would take you 10-20 years

to catch up with nike. how do you draw parallels to the technology world? >> if under armour exploded next year, we went from 3-10. nike has been in china for 30 years. it would take us decades. if we were going to put them out of business. $80 billion market cap. if you took walt disney, they have parks in asia, hong kong, europe. it would take disney 20 years to disappear. there could be a kid sitting in a dorm room right now writing the latest answer to facebook and facebook or instagram or any months,gy within 24-36 they could be wiped from the

planet and kids would not even a member that. and they have a $200 million market cap -- $200 billion market cap. you think about building great companies. there is a different structure between the way sporting goods is positioned at technology's position. more of we do to apply that staying power> "bloomberg wes>> couldn't you th them something? i don't have any loyalty to facebook or myspace or instagram. but we are on the 30th air jordan. crazy for under armour and want the logo. isn't there something you could figure out in terms of brand awareness loyalty? >> i'm not sure silicon valley has been great about branding. it's about what the social crowd thinks. the idea of consumer companies

-- social relies on taking this aggregated view of the world and you have a much more measured message that comes from a consumer or sporting this company. someone from our industry versus some money from tech. >> would you call under armour a sporting goods company at this point? >> i would like to change that image. -- under armour trend to position itself as a technology. i don't think our industry has attracted a of the world's smartest people. i was a driving -- michael is not attracting more into the industry. how can i get the smart ones? four years ago, i went to the ces show and i was blown away in las vegas. a massive show. i