>> live from pier three in san francisco, welcome to bloomberg "west" where we focus on innovation, technology and the future of business. i am cory johnson new economic reports getting some traders off today. the u.s. factory production growth .2% last month. a slowdown in auto manufacturing offset a slowdown in computer. auto still plummeted. -- auto production rises slightly. government troops have pulled out of a strategic counter.

heavy fighting. clien>> a cease-fire agreement has been in production since on that. this aims to relate the data agreement dating back to september. that's ukraine says at least 167 soldiers in the fight died. the key rail of connecting to both strongholds. rand paul may announce his presidential bid in the second week of april according to a person familiar with the matter. the republican has performed well in polls in the key states of iowa and new hampshire. also at an office in silicon valley. carnegie mellon the top-ranked information technology college apparently has a high tea problem -- i.t. problem on its

hands. it sent out acceptance e-mails to 800 scientists but accept only about 100 a year. acceptance e-mails were a mistake. carnegie mellon says it is reviewing the notification process. now to facebook's mission to connect the world through internet.org. trying to provide free mobile internet access to the poorest and most remote type -- parts of the world. not everyone thinks it is a good idea. bill gates critical of the efforts saying his for -- fellow billionaires should focus on more pressing needs like health care and malaria. what does he think about that? >> emily chang sat down with him. but bill and i have had a few conversations about this and other things we have worked on together. the reality is people need a lot of things in order to have good lines. health is extremely important.

we've done a number of think facebook to improve global health and excited to do more there, too, but the reality is it is not either or. people need to be healthy and the internet as a back down and connect them to the hopewell whole economy. the internet creates jobs and one of the things that facilitates jobs. >> mark zuckerberg coming up. now turning to something in the world, snapshot. facebook famously tried to buy the company with $3 billion in 2013. turns out there is going to be higher better. does a valuation when you get a third most viable company. what has made it so valuable and what is it about. and the exploding messaging industry that could big $22 billion that

facebook offer look like chump change? low -- what does it mean for verizon and at&t" leslie picker helping us break apart the story. let me start with you, talking about this deal and looks to be the mass that they are trying to sell no more than 3% or 4% of the company. >> snapshot posted a raise 500 million at the end of last year. now another $500 million. kind of a microcosm what is going on in silicon valley. venture backed companies are raising turning this fundraising out because it is wide open and the winners are certainly winning in the market. asked is there a sense about what kind of investors they think they will get in the deal caps off the late round venture

guys we hear about? is it venture investor or maybe even tellico that may be looking at the world of messaging going away from them? >> all my source told me is it was a fund manager. hoping to get more information as the story unfold as the discussion continues to potentially provide some sort of a deal for snapshot that would yield the 16,000,000,000-19,000,000,000 valuation. >> what we turn to you. -- let me turn to you. more over the top messages snapshot they are twice as many of those messages as text messages going on in the text messaging business. >> that is right. this is the daily text messaging app we talking about. some of the companies are doing about the same as individually per day.

this is 20.8 billion messages per day. we estimate about 20 point -- just over 20 billion messages per day were sent. >> global text message traffic down year-over-year from 8.9 billion to 8.7 billion. i think the most important thing was the down part of a. depending on the growth of text messaging to grow the business over the past decade or so. quite they have -- they have very much and have not invested in ensuring the growth continues. so we have seen some pricing

strategies in the market that have not done that very much good. maybe not as that in the u.s. but so far and are against the effect that certainly it has not -- it has very much taken a hit. are you talking about in terms of growth rate. what is the growth rate in the overall over the top business? text the growth rate is substantial. more than 100% year on year. back in 2012, 2013 estimating about 23 billion messages. looking at the top for domestic apps from last year. the combined daily text messaging traffic was about 35.8 billion. i do not think it shows any signs.

growing the user base so quickly. of from about 65 million at the middle of last year. i think we will see much more growth in over the top messaging market in some time. i'm not including the bigger agents. we have not seen messaging traffic yet. i think that's what these substantial as well. >> when you look at when the deal was discussed about snapshotchat, is whatsapp what comes of the most frequently gekko >> absolutely. this is part of the war to get users using the ecosystem. this acquisition is certainly something they have considered. however, difference in terms of the business model.

it has been trying to monetize launching a discover product that enables users to's need different forms of news media and hope to operate on a more traditional advertising model that is different than twitter and facebook where it is more targeted and focus on the specific demographic of the user. we will see whether or not the advertising revenue turns into some natural monetization for this company. if, fingers crossed, they disclose the financial potentially in the form of an ipo that is coming from a distant ipo reporter. lex a great one. thank you very much. -- >> a y great one. we will be right back. ♪

>> i am cory johnson, and this is bloomberg "west."

gray's will svitek's request for a six-month loan extension tomorrow, a day later than originally land. time to work out the deal of the family of the $4 billion rest plan set to expire at the and of the month. the french automaker has posted its first annual product in three years offering a little over a billion dollars after they cut investment and factories. also hoping the company sells cars outside of the saturated european market. lufthansa set to exit 15% stake in jetblue. promising an early redemption and converts long. this approved the balance sheet as it faces intense competition from europe. facebook ceo mark zuckerberg has revolutionized the way the world communicates and now wants to connect the next billion people launching internet.or providing

free basic mobile internet service to disparate corners of the earth. set up has been rolled out in different parts of the country. emily chang sets down with mark zuckerberg to find out about his plans. >> one of the most populous nations in the world, starts of one of the world's most precious resources. >> the internet is how we connect to the modern world. today unfortunately worldwide only a third of people have any act is to internet at all. >> in india that numbers are even more dire. 1.1 billion people, only 15% are online. so we find mark zuckerberg he just visiting students on the outskirts of new delhi. the founder of facebook revolutionized how people communicate and now has an even more ambitious goal. we believe connecting everyone in the world is one of the great challenges in our generation. that is when the to play whatever small part we can.

>> he called his plan internet.org and has been spreading the message from india to indonesia. >> our efforts with a handful of other tech knowledge he companies to bring affordable basic services to everyone in the world. let's from the lips of the guy who reedit his book, it sounds eminently possible but his team admits it has been far from easy. >> it is challenging because there are market dynamics that make it difficult. >> he go to the people and ask if you want the internet estimate they want facebook and they say absolutely. >> they are asking to pioneer the effort. they have been chris passing dust crisscrossing the globe ever since. the mission is to convince mobile carriers to offer unlimited versions of the internet for free. here is how it works, facebook custom-built an internet website for each custom country.

they've linked to facebook all a zero cost to the user. the idea is users get hooked on the internet and by a data plan when the free access and creating new access for the carriers and new users for facebook. >> why call it .org? is it a nonprofit or charity? >> if we primarily focused on charity, the most reasonable thing is to focus on the first billion people using our product. >> you want to do good things. it's a case, why not get access to the complete internet -- if that is the case, why not give complete access to the internet? press even if you're not paid for a phone plan you can always file 911. >> a professor at columbia university and public policy advocate. what a company want to give away of product for free? >> they

think they can build the world's most powerful device accessing hearts and minds of this and sell it to someone else. >> we have about 7 billion people on the planet. whoever gets the biggest share may be expected to dominate the biggest future of media future. >> not to be dominated google has a fleet of high altitude balloons already circling the planet, bringing the internet down to earth. both recently plans to launch satellites that will carry the internet everywhere. facebook has moved shops of its own flight by a mad scientist of sorts. next this is sort of a new frontier where you can get much higher data rates than typical. ask in a southern california lab

still being built, mcguire and a form of nasa -- team of nasa engineers will send to earth in a beam of light. >> for all of the developed markets we are looking at and trying to improve access, we want to use laser communications everywhere. >> this but it inside area vehicles. these are planes that continuously circle above the earth. lex the world record is around two links. we need to figure out how to make these last for months at a time. >> the advantage? they do not rely on sound powers or any earth-based infrastructure. maguire sevcon activity from the sky is still 3-5 years out but it next to test the first thrown later this year. >> why do you get people connected? how do you you use the power? >> for us, it is all about enabling the power.

>> zuckerberg's plan seems to be working. both companies recently announced partnerships and leaving millions of new people access to the internet and facebook. >> how will you judge this has been a success? >> if we can make it to the free basic services are available on 100 more countries, that will be a huge win for all of the people that will now have access to new information on jobs and health care and education. >> you said you hope for more than one billion by 2020. do you think you can get their? >> we will see. it is the kind of grand plan you can only ask that from mark zuckerberg. the real question is, can he change the world? not once but twice. >> an exclusive conversation with mark zuckerberg tomorrow night. we will be right back.

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>> this is bloomberg "west." i am cory johnson. uber rolling out a new program to cover drivers when they are not ubering. i think your business is interesting. i'm a berkshire hathaway geek. a business so far from actual data. what is the problem with drivers getting insurance? >> one of the problem is many of the drivers right now are worried about current coverage. they are living in the dark for the most part. they cannot tell the current insurance provider they are driving for uber. the

reasonbeing , you are not allowed to drive his attack legally or right share. this provides coverage -- >> so a lot of drivers are out there not telling their personal insurance that by the way i am using the car for delivery services. >> the reason being, if you tell them you may get your insurance canceled on you, or if you have came in between, there is a risk it may not be covered. that is the problem. a lot of drivers are living in here of that happening. there can be coverage of this time happening. >> talk to me -- one of the things you are known for is sticking something in the car to see when it is things used. aggregated data to figure out what your risk profile is in sharing that something insurance at the price as a result of it. >> we have a committee to approve policy with it.

this little thing sticks into the car somewhere under the --. >> it is a diagnostic port. it basically sense that the number of miles you drive. we do not use behavior to reassess risk, just the number of miles you drive. this is what makes it so easy to drive with the uber policy. we know the miles you are driving with the retro mile and the driver with uber. so basically we did a technical innovation. they worked famously so you can turn our policy into your policy on and off depending when you're driving with uber and when you're driving personally. >> do you outsource this to another company? >> women underwriter but we do not sell the behavior data and sell it anywhere. >> you basically sell off the risk to the underwriter in? >>

we have an underwriter that provides the backing for the policy. >> do they get tell you are able to assess very different risk profiles based on different usage? >> this being the dominant factor for insurance has been known for quite some time. there are a number of research been done in early 2000 about this. they understand the rest just like we do and are able to build a policy perfectly based on mileage. >> i presume drivers getting more accidents and the average driver because they are on the road so much more. does the behavior skew differently when they are not driving for uber? >> the important distinction is the big difference for an uber driver is the time on the road like you mentioned. so there is a commercial policy for that. >> dr. dan miles, thank you very

much. we will be right back. ♪

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♪ oh, yeah! woooo! with a guaranteed 2 hour appointment window and a 97% on-time rate xfinity is perfect for people with a busy life. >> i am cory johnson. "west.". facebook's plan to connect the planet is not enough. now faith -- companies have to do good. company start with the social impact missions they met before a business plan often. is this just do good enougdiness pr? we have this conversation in your garage a while ago. as a recovering new yorker i was rolling my eyes a little bit.

there are so many companies that start with a vision payment not about business but what they will do to make the world a better place. >> a lot of companies start together with a group of people getting together to say what it be cool if ...-- wouldn't it be cool if... >> didn't it used to be is my database worked better? >> i think framing it as positive change is a significant trend occurring not only in the valley but across the world. people are saying we can organize in this thing called a company to create them kind of good in the world. i think the large companies like facebook, google and others are leading the way and a lot of startup founders are getting in on the game. >> fabulous tv show on hbo. it looks amazing fun at this very thing.

there is a long conversation, then it the clip of the opening scene of the opening show. take a look at this if you don't remember. -- >> a few days ago when we were sitting down with barack obama i sent we're making the world a better place through constructing elegant hierarchies. >> elegant hierarchies to make the world a better place. at what point, where do we draw the line? what is a serious company focused on this? actually i think that is one of the reasons we need a brand like new co if you do not have a brand about celebrating and connecting them, there is no continuity to call people on their bs if they are not living up to what they say they are doing. i think there is an opportunity to go beyond empty promises and missions they admit and try that start to tell the stories of companies creating the change in

the world and owning it. >> we see venture capitalists on talking about this and invest in along the lines. i would have asked to this to develop as such, as pension plans they would say we need you in the same way they suggested the vesting or contributing to climate change. it does not seem to be led by that. >> the social impact investing community has somewhat of a nomenclature problem. they are afraid that if we -- if we call ourselves too much about social impact, we will get lapped on the profit. companies who do not have a social impact agenda will be the companies that do because they have better profits and earnings. -- beat companies that do. i think over time we are getting to the part where we understand the total value not just profit. the total value includes the good it does in the world. >> also doing things in a very

quiet way. both companies giving up portion of the operating profits to charity. also insisting employees for volunteer organization. is that enough to >> i think that is part of it. if you look at the organization they started with a missions they met about creating positive change. salesforce wanted to be ending software. they had a mission around funding local information in real-time. twitter is the same way. it is building social good and impact to the building. they talked about that last year. so twitter for good is their approach to corporate philanthropy. they change the traditional approach to where they have built the program with a partner with the market in san francisco, a well-known area. they are partnering with that

actual city district in the actual headquarters of twitter and integrating employees into that program. they are integrating it into the workplace, which is in interesting approach. lexi put metro miles on the list, too. they woke up and said wouldn't it be cool if there was affected for your car? thai baht standard , exxon mobil is a great company that is trying to lower the price of gas. one could argue any company has some of it and it syria identifying that has a positive change overall. you can call me too optimistic, and i have no problem with that. >> pulls disclosure, you and i are friends. you just did a big investment. -- full disclosure, you and i are friends. >> bloomberg data is separate but i am very proud to have that connection. including social impact connection. >> interesting stuff.

thank you for joining us. >> coming up apple. we will talk about that in their first new device since the ipad. the apple watch coming soon. how big of a business? we will talk about that coming up next on bloomberg "west." ♪

>> cory johnson i am -- i am cory johnson. bloomberg "west.". apple what expected in april. will this be a breakthrough for the company gekko i talked to this -- talk about this with gene munster. >> it will be relatively small versus the ipad. think about the expectations of 20 million units half of were the ipad was in its first year. i think modest at dictations, a

lot of consumers we have surveyed are still debating what the true value of the watch is. this will determine overtime. >> tim cook is at the goldman sachs conference to determine the apple watch. there was unique things because so many were wearing them. everyone standing up because they had all been sitting down for too long. he suggested apple make a difference and everyone will have a different one. >> exactly. the romance similar to what happened with the phone. it came out and was marginally better. that is going to be the expectation with the watch because developers will build a true value. they are debating the value. basically the same as your phone.

it will optimize the short versus long look. there can be new experiences built on the watch we have not seen yet. it is up to the developers to drive demand for the watch. >> we have reported apple has people in mexico meeting with the mexican government talking about what the watch might mean for help. are there things that will lead government approval around the world? >> potentially, depends on what they are. one of the big areas of focus is around health. ultimately some of those are more infrastructure related and more health-care related and more government and policy related. there are some avenues where the watch meaning more government interaction. if that is the case it opens up a huge opportunity for the watch that will be used as a standard issued part of health care system. >> when you calculate your watch number what is the number and

how do you come up with that number? >> right now a lot of guesswork. we have gone back and done surveys over the past year. we have surveyed 10,000 people and ask their interest level and surveys that -- compare that to pass surveys and been able to build demand numbers that suggest between 15 million -- 10-15,000,000. now we are getting numbers that of asia that this 20 million. the reality is this is a really difficult one to predict because his -- because this is a new category and unknown what apps will be out there. the starting point is between 10 million and 20 million, and we will build from there. >> i would think the really hard part in the model is the average selling price. what do you think the top-of-the-line watch will go for our retail? >> the best

guess somewhere between 1000 and $1200. it will be huge asp the base model $500. they start around $350. we are expecting a big number but not expecting a lot of people to purchase it. that will be a clear wildcard under -- around the impact of the model. for the most part these are just guesses right now. >> du guess it may skew toward the look, i just bought the top-of-the-line addition in the first six months but more of a mass-market product? >> i think you will get that early adopter that will want better features and pay up a little bit more. as these -- as we see with iphone and ipad overtime, as we get to the mess market adoption they can slide. i wonder if we are getting to a

point where apple is looking at itself very differently as opposed to a maker of a handful of products that are able to be customized -- customized by the user to a world where apple sees itself like a burberry with very high-and style-leading things that establish what the brand is for the world and many different skews down the line for very different use kind of cases. that is a very different kind of company. >> it is. we have seen this transition to what you described as more of a wide selection type of company. this going from one skew too many. the ipad is the same with the watch outlined a goal of having many different types of watches. i think this company is very different. the difference is they recognize one size does not fit all. they want the platform to fit everyone but in terms of how people interact with that, a lot more options today than five years ago.

>> we hear about them putting a private room for jewelry-watch. does that tell you how they are reestablishing with the brand is ? >> i think they are continuing to push this high-end, desirable brand. two years ago a big expectation apple would drop the price of the phone to be more successful in the mass-market and emerging-market and they did not do that. and, they have really emphasized the high end. i think the goal is to focus on the high end but still offer lower-priced product for the masses where if you cannot hit the high and priced product there is an offering apple has, which is going to be equally as profitable for apple for you to buy. >> gene munster piper jaffray c.

sony says operating profit and $4.2 billion profit i 2018. that is the highest since 1998. the ceo. >> devices such as image sensors, gaming network service, movies and music will be the areas that will lead sony's ceogroup in the next three years. sony is most competitive in these areas and will see the potential of growth in the market in the coming years. >> six net loss in the past seven years because of the write-down in the struggling phone business. the largest search engine. an economic slump in the ruble. the index russian market share twice that of google. diversified with online taxi service, classified advertisement and data profit. iran supreme leader warning the nation.

exporting oil and natural gas of international sanctions remain in place. iran is the world's largest gas deposits and fourth-largest oil reserves and the economy is suffering under sanctions related to this. >> "bottom line" with mark crumpton at the top of the hour. he joins us. like the u.s. federal reserve releases the minutes from it january meeting. one area market watchers will watch closely, whether there was any discussion of the language as it relates to how patient policymakers will be before raising interest rates. tony kristin cia of pimco will help us about with this. -- tony crescenzi.

i will be joined by mark zandi of moody's analytics. back to you in san francisco. >> samsung the dominant phone icompany in china but no more. getting hit hard by chinese companies and apple. what happened? how samsung has fallen so far, so fast. ♪

>> i am cory johnson. this is bloomberg "west." samsung's dominant in china is over. it has been overtaken is the largest smartphone pundit -- vendor last year. second place? sam -- samsung in fifth place in the fourth quarter. behind apple, lenovo. what happened? crawford don't product joins us. ashcroft-- crawford del prett joins

us. but it reflects an amazing fall more than anything else. going back to 2012, every single quarter samsung was the leading supplier in china. basically it has fallen apart. what they see now is you have this upstart in shall me -- how choime. they had bundled, like at&t whether china label phone. those folks are now selling direct and getting a lot more sophisticated product design. as you point out, apple has absolutely moved in and move in fast. >> when i look at the rise of xiaomi in particular, i look at a company that will have a full

featured phone and has no expectations. >> it is fascinating, because they load up they historically will load of top-tier processors, they will load up with memory and pretty beautiful industrial design if you have ever been over there to see the product. they really want to try to make money on their version of android. a little bit like jeff bezos model but has not shown up on the kindle fire. make money on accessories,they apps other kinds of services that it can offer. i will say there is an often the city -- authenticity with the brand. not a lot of products or a lot of authenticity or voice that people can latch onto. >> yet samsung is talked about the number of phone they offer an substantially. they will make a ton of different kinds of phones.

is that part of this? >> absolutely. we saw this in the pc world, too. i can remember talking to michael dell and hp, talking about how they had to get rid of the number of skews because people want one iconic product. that is true to some degree but also the idea of a product you create has to be something people are absolutely craving. that is what samsung is having trouble tapping into. samsung tends to come out with features that get in the way. they lay on top of android that people want to strip away, as opposed to xiamoi went is focused on -- it was focused on the product. >> should we be talking about market share or profit share?

apple, you say you have the competitor going down markets, down profit scale and sometimes less than single digit margins. apple is not doing that. they are making loads with the very best product. >> here is the thing, we should be talking about profit share. the profit share battle is going to be really intense because there is only so many of the high end customers. apple is now the aspirational brand. there is a lot of underserved consumers in china. a tremendous amount of money. now some interesting things, swapping out qualcomm and putting in media tech or the main processor. that is because they want to start to address the need of the next here -- tier and below that. during your interview, apple has not gone down market.

they started the wind and also came in at the high end and now now not exceeding the ground of low end. >> as long as you're here, why don't we have you do the one number that tells us a whole lot. you got something? >> how about 840? life $840? >> that is the price that sony has come out with for their new wearable glasses technology. >> i wear glasses sometimes. what do these do? >> this is interesting, about a 44% reduction over what google glass, the other entry we have seen in the category came out with. a very different approach but that is what they are trying to do, a google glass saying. >> thank you very much. we appreciate it. get the latest headlines all the time. more bloomberg "west." tomorrow. ♪

>> from bloomberg world headquarters this is bottom line, the intersection of business and economics with a main street perspective. we begin with breaking news. the federal reserve is releasing minutes from its meeting in january. our washington correspondent has the details. >> you will recall that fed policymakers upgraded their assessment of the u.s. economy and repeated their pledge to be patient in raising interest rates. that is a plan they plan to hold