♪ >> from our studios in new york, this is "charlie rose." >> jack ma founded alibaba 16 years ago. today it is the largest e-commerce

company in the world. 100 million buyers go to the site each day. last year, transactions totaled $208 million. in september, alibaba went public. the ipo was the largest in history and made him the richest person in china. i spoke with jack ma on friday in davos, switzerland. here is that conversation. >> how big is alibaba? how many come every day? how many people come in a week? how fast is it growing? >> we have over 100 million visiting our site, shopping our site. that is every day. we created 13 million jobs for china.

and, we grow from 18 people to 30,000 people, in my apartment to four big campuses. compared to 15 years ago, we are big. compared to 13 years later, we are still big. >> how big will you be 15 years from now? >> 15 years ago i told my team that in the path to 15 years, we grow from nothing to this. 15 years later i want people to see no cap. it is already everywhere. i want 15 years ago that we talk about what is e-commerce? why small business using e-commerce? i hope 15 years later people forget about e-commerce. because they think it is like electricity. nobody think it is high-tech.

this is something that i don't want 15 years later, we still walk on the street talking about why and how e-commerce can help people. >> talk about the ipo. did it exceed your expectations? >> it is a small ipo. >> the largest in the history. [laughter] >> we raised -- >> number two was a chinese bank. >> thank you. i remembered 2001. we want to raise some for venture capitalists in the united states. we got rejected. i said we would come back raising more. [laughter] but, i think what we think more about is by $25 billion, how to spend the money efficiently. this is a lot of money. this is a trust from the world.

trust from those people. they want you to do better jobs. to help more people. they want a good return. so, i think if we have more pressure, because right now our market cap is bigger than ibm. some days we are bigger than walmart. we are of the top 10 market cap companies in the world. i told my team and myself is that true? we are not that good. because years ago, people said ali baba is terrible. let's not make money. all the bad things. i told myself and people, we are better than we thought.

i said we are not as good as people thought. we're just a company 15 years old. we are doing something that is not tried. >> you grew up in the 1960's. >> 1964. [laughter] >> that was the time of the cultural revolution. >> the end of the cultural revolution. my grandfather was a tiny landlord after the revolution he was considered a bad guy. so, i was -- i know how tough it was when he was killed. -- when i was a kid. >> you tried to get into three colleges. each time they rejected you. >> i tried the examination that

young people, if you want to go to university, have to take. i failed it three times. i failed for funny things. i failed a key primary school test two times. i failed three times for the middle school. you would never believe in my city, there is only one middle school. it lasted one year. it was transferred, because our graduates of our school, no middle school acceptance because we are too fast. >> what effect did it have being rejected? >> i think we have to get used to it. we are not that good. even today we have a lot of people reject us. i think when i graduate from university, before i for three

years i tried the university. i applied for jobs. 3 times i was rejected. i went to one place they said no, you are not good. when kfc came to china. [laughter] 24 people went for the job. 23 people accepted. i was the one rejected. [laughter] and then later, five people were accepted. i was the last. being turned down, rejected, i applied for harvard 10 times rejected. [laughter] >> 10 times eu wrote them and said he wanted to go to harvard. >> yes. >> i told myself someday i should come teach there. [laughter] >> i think that can be arranged.

richard nixon came to china and tourists flooded the place. that is how you learned english. >> yes. i don't know why, at 12-13 years old, i fell in love with the language of english. there is no place you can learn english at that time. there were no english books. i went to the hotel, the hotel can receive foreign visitors. i showed them around as a free guide. they taught me english. i think that changed me. i'm 100% made in china. and when people talk to me and say, how can you speak english like that? i think that was the nine years. these western tourists open my mind because everything they

told me was so different from the things i learned from schools and from my parents. so, now i have a habit. whatever i see, whatever i read, i use my mind. i think about it. >> is that how you became jack ma? >> jack, the name was given by a lady, a tourist. she came here and said maring is difficult to pronounce. so she said, do you have an english name? i said i don't. i asked, can you give me an english name? she said ok, my father was called jack. what you think about jack? i said good. [laughter] >> first visit to america? 1995. >> yes. i came here for a project

helping the local government building up a highway. >> you tried the internet. >> i tried the internet in seattle. in a building called the u.s. bank. i don't know whether it is still there or not. but it was a building and my friend opened a small office only 10% bigger than this room. there were not many computers in their. -- in their -- in there. he said jack, this is the internet. i said i don't want to type because computers are so expensive in china, if i destroy, i cannot pay for it. >> he says just search it. he said, try beer. i didn't know how to spell it.

i said, it is from germany. beer is from the united states. beers from japan. no beer from china. i said, type china. >> 1995. >> no data about china. i talked to my friend. why not make something about china? we made a small, ugly looking page called something like, china --, so shocking, we launched it in the morning. 12:30, i got a call, he said you have five e-mails.

i said what is e-mail? they were so excited. this is the first time i've seen a chinese website. can we do something together? i said this is something interesting. we should do it. >> why did you call it alibaba? >> alibaba. when i started, i said we should have a global name. a name that is interesting. yahoo!. i was thinking, alibaba is a good name. i was in san francisco that day. waitress came. i said do you know what alibaba is? she said, yes. open sesame. i said good. people know about alibaba. i think this is a good name. it started with"a" and so whatever you talk about, alibaba is at the top. >> you have said before that in

creating alibaba you have to create trust. >> yes. >> people in china are used to face-to-face. how did you create trust? >> i think because we started with the internet, i don't know you, you don't know me. how can you do things online unless you are trusted? so, for e-commerce, the most important thing was trust. i think when i first went to the united states for raising money, and i talked to venture capitalists, a lot of them say jack, china -- how'd you do business on the internet? i know that we have to trust the system. and the credit system. it is impossible to do business. in the past 14 years, everything we do is trying to build up the trust system. well, charlie, i am so proud of us today.

when i talk today in china people trust each other. the government, the people, and the media, everyone thinks this guy is cheating. because of e-commerce, we finish 60 million transactions every day. people don't know each other. i don't know you. you don't know me. you wire the money to me. i don't know you. i give a person a package. i don't know him. he took something to sell across the ocean, and say this is the trust. we have at least 60 minute trust happening every day. >> you created an escrow account in the beginning. you keep the money until they got the product. and then you release the money. >> that is true. the escrow services of alipay. for the first of three years alibaba is just a marketplace

for information. we talked a lot of times and don't do business. because there was no payment. i talked to the banks. banks said, no, this would never work. i don't know what to do. if i start a large payment system, it is the financial legal walls. if i don't do it, e-commerce goes nowhere. you have to have that. i went to a leadership discussion. it is about responsibility. after i listen to the panel i give a call to my colleagues. they say do it now, immediately. if there is something wrong, and the government isn't happy, if somebody has to go to prison jack ma will go to prison. because it is so important for china, for the world to trust the system. if you do not do it, and do not

do it properly, money wash, you will get sent to prison. i will send you to prison. that was it. people don't like it. so many people i talked to at that time they say this is a stupid idea. it is not as people use it. now we have 800 million people using alipay. >> it is now a part of alibaba. you have never gotten money from the chinese government. >> no. i wanted in the beginning. later i didn't want it. if the company takes money off of the government pockets, that company is rubbish. think about it, how can you make

money from the customers and market? >> no money from chinese banks? >> no. at that time i wanted it. they had gone against me. i don't want it. [laughter] >> your relationship with the government. what is your relationship? here is what some say. that you have existed in an environment that is not -- they have restricted competition for you. that is a good thing to do for a private company. >> yes. i think the relationship with the government, for us is very interesting. for the first of five years, i have been working as a part-time job for a government organization called the ministry of foreign trade, in 1997 for 14 months. i learned you should never rely on a government to do e-commerce. i started a business and told my

people, be in love with the government, don't marry them. [laughter] respect them. and a lot of people say the government officers are looking at the internet, does this and that. i think it is the opportunity, responsibility, talking to them. tell them how the internet helps. >> you tell them i create jobs. >> yes. a lot of people debate. a lot of people fight against them. in the first 12 years, anybody comes to my office, i sit and talk to them. how can we help the economy and create jobs? why china will improve by the internet. i think because the internet at that time, if you can meet someone you have the chance. so today, i'm very talkative.

this is why i talk to so many people. >> if the government comes to you and asks to do something for them. >> normally, when the government says can you do this project, i say no. i can introduce some friends interested in doing that for you, but if they continue to want me to do it, i say i will do it but i don't want a charge. don't come to me again. but recently, we have some government organizers. every spring festival, the train tickets are so difficult hundreds and thousands of farmers in cities go to the hometown. when they order tickets on the

whole system crashed. for five years. i told young people, go support them. don't charge anything. i don't want to see millions of farmers go back to cities and they cannot go back to hometowns. it is not for money. it is something that is not for the government. it is for the millions of people that can buy tickets in the snowy night and don't have to wait. >> a one-way stop along the route to where you are, yahoo!. they gave you -- they invested $1 billion. it turned out to be a good investment. >> yes. >> you raise this money on your own outside of china with investors. >> yes. >> i am very thankful for all the investors. 1999, year 2000, a lot of people say jack is crazy. he is doing something we don't understand. a lot of venture capitalists

give you money, because there is an american model. but they say alibaba, we don't see this kind of model. >> and jack is crazy. >> a crazy guy. i remember in time magazine, they call me crazy jack. and i think crazy is good. we are crazy, but we are not stupid. [laughter] we know what we are doing, great if everyone agreed with me, we have no chance. the money we raised, we are thankful. our investors make a lot of money. i feel proud and honored. >> as you know, issues have risen about privacy. google and apple and questions of whether the government should have access to files. how do you handle that if the

chinese government says, you know a lot about people. you have transactional relationships with lots of people. what do you say if they say, we want to see your files. >> so far, i don't have that problem with china's government. if it is a criminal, we are worried. then we work with them. the rest of that, no. we are a business. the data is precious. we don't know how. if we give to anyone, it is privacy issues. i think, just like hundreds of years ago people say i would rather put money under my pillow than in the banks.

now banks have to put their money much better than you do. privacy issues, all of the securities today, we may not have the solutions. we don't have the answers. i believe our young people have the solutions. in the next 10-15 years, there will be breakthroughs with that. i am fully confident on that. >> your life is a testament to the idea that nothing is impossible. that if someone says no, you say it is just the beginning. where does that come from? >> well, at the beginning i never thought -- i thought when i was young, everything is possible. now i know, not everything is possible. we have something we have to think about. you have to consider others, the customer, society, your employees, shareholders. so there are so many things that i

think, if you continue to work hard, there is possibility. and, i just am an enthusiastic about what we are doing. at the beginning, i just want to survive. >> that was 2000. >> yes. but later i think, so many people's lives change. i was so excited. when the first of three years we made zero revenue. we are so excited to continue to work. i remember many times when i go to restaurants, someone came and i would try to pay the bill, and the owner would come and say sir, your bill is paid by someone. and a small note would say i am a customer of your group and i

make money, and i know you don't make any money. i pay the bill for you. [laughter] i remember one thing. i was sitting somewhere, someone sends me a cigar. i don't smoke cigar. but there was a note, it said thank you, i am a customer. and i remember, i was at the shangri-la hotel. someone open the door for me the boy at the gate said thank you very much. my girlfriend makes more money than i do on your site. this is something that you now -- no -- know, if you don't do it, nothing is possible. >> the revenue comes through advertising and transactional fees. most from advertising. >> tiny.

tiny from advertising and transactional. we need -- we have more than 10 million small businesses selling our site everywhere. the transactions we have, tiny. second after walmart, i remember one of the guys from walmart five years ago said jack, you are doing a great job. i said in 10 years we will be better than walmart. he said young man, you can have of that. i said, 10 years we will be bigger than walmart on the sales. if you want to have 10,000 new customers, you have to build a new warehouse. for me. it is to servers. >> where you going? what does jack want?

>> we are an internet company. we happened to be in china. we have the same entrepreneur spirit like every great entrepreneur in the world. i remember the day when i started alibaba. we were helping small business do it easier. today, so many minutes of small business using our platform to sell things. over 300 million consumers buy things from our site. cheapest, efficient. i think about how we can make alibaba a platform for global small business. my vision is that if we can help small business sell things to argentina, argentina consumers can buy things from switzerland.

we can build up, which i call wto. wto is a great thing. it has big companies across the nation. i hope that we can serve 2 billion consumers. >> 2 billion consumers. >> we can help 10 million small businesses outside of china. >> outside of china? >> outside of china. because we have american farmers in washington state, almost 300 tons of cherries to china last year. cherries. an investor came to me, can you help us sell cherries in china? i said, why not?

let's try it. when we order, when we start to sell cherries, they are still on the trees. we started a preorder. 18,000 families order cherries online. we pick up the cherries, send them the china. within 48 hours, we sell them. the consumers are so happy. we had a lot of complaints, saying why only 100? they wanted more. so we had costco, we sold 300 tons of nuts to china. so, we are also selling alaskan seafood to china. so if we can sell things to china if we can sell seafood or cherries, why can't we help american and european small businesses sell to china consumers? china needs that. that is what i want to do.

2 billion consumers in china asia, developing nations. how we can let them buy things globally? >> when you look at international markets, you are doing well in russia. how well? >> pretty good in russia. we did pretty good in brazil. russia now, if we are not number one may be the number two or number three we had a campaign. the campaign is that russian girls and boys want to buy from china. how many days are russian girls placing order and receive the product from china? two years ago, -- after the campaign, we didn't in

-- we did it in one week. we crashed the system and russia. -- in russia. >> you were seen in hollywood. what are you doing in hollywood? >> i like the hollywood innovation, the digital. i learned so much about the hollywood movies, especially forest gump. >> you love forest gump. why do you like chem -- him? >> never gives up. people think he is down. but he knows what he is doing. i was feeling depressed the day in 2002 or 2003, earlier than that. i was depressed when i could not find a way for the internet. then at my friends, i watched

forest gump. when i saw him, just a guy believe what you're doing, love what you are doing. and life is like a box of chocolates. you never know what you can get. i never knew i would be here talking to you, talking to charlie rose. i never know. today i made it. i told my people in my apartment 15 years ago, guys, we have to work hard. not for ourselves. if we can be successful, 80% of the young people in china can be successful. we don't have a rich father. we don't have a powerful uncle. we don't have a bank. just work as a team. >> what are you worried about? >> i'm worried about young people losing hope, losing vision, and start complaining. we have to say, it's not good feeling rejected by so many

people. being depressed. but later we find the world has a lot of opportunity. how you see the world and catch the opportunity. hollywood gives me a lot of inspiration. >> you went out there for business? you want to make movies and sell them? >> i want to make movies. businesswise, we are e-commerce company. we have products that need logistics. but movies, tv, these are things you don't need logistics systems. movies probably are the best product. they can help chinese young people. one thing i told the chinese people, my friends. american movies, all the heroes at the beginning of a bad guy. they become a hero. they all survived. in china, all the heroes die. [laughter]

so, nobody wants to be the hero. >> you want to change the chinese definition of hero. >> we have so many heroes living in this world. >> are you writing a kung fu novels or are you reading them? >> i'm reading them. i am writing them. kung fu is something that is something you start to think about something you cannot do. if you have some luck and continue to practice, if you have a good master, when i'm busy or tired, i will read a couple of books on tai chi. and kung fu books. >> what does that do for you? >> i love tai chi. it is a philosophy. tai chi is about how you balance, how you work. like in competition. when i compete with ebay, they

say you hate ebay. no. it is a good company. they come and go. tai chi is like you go here, i go over there. you go up, i go down. it is balance. [applause] [indiscernible] tai chi is about a philosophy that i use in the business. calm down. there is always a way out. keep yourself balanced. business is not a battlefield. you die or i win. business, even if you die i may win. it is fun. tai chi gives me inspiration. >> you want your life and this company to change the world. but also, you believe alibaba

ought to change the lives of women. what are you doing? >> many years ago i wanted to change the world. now i think if we want to change the world we change ourselves. it is more important and easier than changing the world. second, i want to improve the world. because to change the world may be obama's job. my job is to make sure that my team is happy. because my team is happy, they can make my customers happy. my customers are all small witnesses, -- businesses when , they are happy, we are happy. one of the secret sources of alibaba success is we have a lot of women. >> what percentage? >> i think two or three months before we did an ipo, there were people coming to our company.

a journalist came, and said jack, i see so many women in your company. i said what's wrong? [laughter] we find out later, we have 47% of employees women. 47% of our company are women. we had 51. a lot of companies today, they have more men. >> top level positions? >> 33% are women. 24%, the very top level are women. we have women ceos, cfos. they are everywhere. i think it is comfortable working with them. because women, in this world if you want to win in the 21st century, you have to be making sure that making other people powerful empowering others, making sure other people are better than you are, you will be successful. women think more of the others

than themselves. they think about the kids, the husband, the parents. much more than men. they-- [indiscernible] >> a couple of more things. china today, are you worried the economy has slowed? >> no. i don't worry about it. china is slowing down and is much better than 29%. it is the second largest economy in the world. it is impossible to keep 9% growth. if china still keeps 9% of growth of the economy, there must be something wrong. you will never see the blue sky. you would never see the growth back. we will never see the quality. china should pay attention to quality.

china should. if we have a lot of movies and sports, we will be better. you can never grow. certain times, the slower growth. they should grow your mind, grow your culture, grow your value. i think china is moving to that. >> finally, there is this great -- there is this, you are one of the world's richest people. your company is one of the world's richest companies. what do you want beyond alibaba? >> i told my -- i was not happy in the past three months when people said jack ma is the richest of china. >> a global celebrity. >> no, i'm not. >> you are. >> maybe i am. but 15 years ago, apartment in

my apartment, my wife was one of the founders, do you want your husband to be the richest person ? i never said rich person in china. or do you your husband to be respected. she said of course, respected. she would never believe we are rich people. we just want to survive. we have $1 million of money. we have $20 million. you start having problems. you worry about inflation. when you have $1 billion, that is not your money. that is the trust society gave to you. they believe you can manage the money. use the money better than the government. i think today, i have the resources to do more things with the money we have, with the influence we have, we should spend more time on the young people. i would say someday i will go

back to teach, go back to school, spend time with young people, and share what i have learned. the money is not mine. having this resource, i want to do a better job. >> thank you for being with us. [applause] ♪

>> last week the president -- i spoke to him about the future of iraq. >> you talked about support for your troops on the ground, are you getting assurances from the coalition partners that it will be forthcoming? >> i think i'll of 61 states there will be support.

these are the most effective partners and i have received a positive response. i know we are looking for more support. i have said in the past, i have confirmed it was a slow start. sometimes it is frustrating and painful. we have to match, there is an iraqi timetable on the ground. there has been a problem. now in the last weeks, we have seen organization. an increase of numbers between our commanders and the coalition. we must have our forces perform better. i have seen ammunition and armor

meant thank you. we have been promised that there will be to ferment of payment to iraq. of course, we are still waiting to see that. i have to be blunt. our economy cannot sustain two major spendings, one is our society, depending on that budget and the other is the war . we need help on this. >> one of the issues, before you had the support, you are the new government in baghdad. has -- governments of -- said they will play a role with you?

>> the prime minister who is a friend of mine, he is having to get -- in our situation, it plays a role. the executive is within the government and we have to have regular meetings for the leadership and we have a good working relationship among iraqi institutions. the executive is the part of the government and parliament. it is helpful. it has benefited us. >> what impact might be the change of leadership in saudi arabia? >> i hope for the positives, we have a new government and new leaders in the regions. a new leader is a good idea. we wanted to bring benefit to everybody.

>> what are the plants -- plans? >> when i talked to the prince two weeks ago --. i hope that we can make a good relationship between our two countries. my government, we want good relationship with the region. it is important. iraq cannot do a lot without the whole region. we need to keep that between us. we are openhearted. >> have you seen a change in attitude among the cities? >> the present government has more popularity than some of my friends, more publicity acceptance among the population,

then other organizations. >> there was an article today where general often said there is land of moving ahead for retaking --. can you tell us where that stands and when that might happen and can the iraqi army provide boots on the ground that are sufficient? >> at the moment, there are boots on the ground. there are troops in that region. we have a problem on this, which is the land link between our forces and the rest of europe. we have to make sure that that is there. we are fighting to make sure that there is a good link protected and open for our forces to move forward.

and it can be done. i am telling you, with the latest we have to plan more days than we have actually achieved. we have been surprised -- don't fight. because -- malls are on the decline. x -- >> have they eliminated half of the -- leadership? >> we have seen that. we have a very good special forces. they are carrying out operations. there is security and

intelligence. we are doing well on this front. >> what is the contribution of --? >> they are volunteers that answer the call for their country. they are fighting to defend their country. yes, i think some have an organized before. but the frustration in iraq is completely different than it was before. all of these groups, they are asking the government. before, they were fighting the government. now they don't want to be seen as outside the government. the religious leadership is calling on all arms be under the control of the government. all arms are under the control of the government.

outside of dash. >> what about the contribution of iran? >> i summarize it as positive. when dash forces came into iraq, they have upheld the kurdish region as well. they have been prompt in sending arms, ammunition, without even asking for payment first. we pay later. i think they have been very helpful. i cannot deny they are giving help to us now. i have to stress there is no single iranian soldier on the iraqi soil, no single iranian soldier fighting. we don't need them.

he is an official of the iranian military establishment. he is a part of the infrastructure of the iranian establishment. it is no secret. everybody knows we are dealing with this man. we have respect for him and for iranian establishment. we have the longest border with iran. the east and the north, and the west and the south, with arabic countries. i think we are happy to act like a bridge between the arab world and the rest of the muslim world. >> syria. do you see it planned to change things on the ground in syria? >> i think the current

situation, i am pessimistic. i cannot see a plan to save the syrian people. if this work continues in syria, all it is doing is damaging syria. it is killing civilians. i am surprised people around the world in the region that started this war they can't stop it. i say, let us stop it and then talk later. the continuation of this war, it means the continuation of sacrifices of the people. iraq has been attacked from neighboring syria. we have paid the heaviest price for the situation in syria, for the war in syria, it must be stopped.

we are very actively working to try to find a solution. we have been talking with the kurds, with the iranians, with americans, with europeans. we want to find a stop to this crisis, because it is in our own interest and the interest of the syrian people. >> thank you. ♪

>> live from pier three in san francisco, welcome to "bloomberg west" where we cover technology, innovation, and the future of business. here is a check of the headlines. u.s. stocks got hit hard today. the main reason was disappointing earnings. microsoft had its worst day in a year and a half after sales in its business software division -- overseas. caterpillar falling 7% after plunging oil prices took a big bite out of its business. the swiss national bank's decision to end the swiss