. . >> live from pier 3 in san francisco, welcome to "bloomberg west," where we cover innovation, technology, and the future of business. i'm cory johnson. with the bloomberg top headlines. benjamin netanyahu told u.s. lawmakers that a u.s. agreement with iraq would backfire and signal a nuclear armed republic. netanyahu said the deal paves iran's captain obama. >> iran has proven time and again that he cannot read trusted. and that's for the first major

concession is a source of grave concern. it leaves iran with a vast nuclear infrastructure, and relies on inspectors to prevent the breakup. that concession creates a real danger that iran could get to the bomb by violating the deal. >> in the past, and yahoo! has threatened -- netanyahu has threatened airstrikes. the state government says hillary clinton used a personal e-mail account to conduct official business rather than a government account. the state department which doubt asked -- reached out and asked for records. the state of art found 300 e-mails -- the state apartment found 300 e-mails. clinton spokesperson said there was nothing improper about the use of personal e-mail, and that all official records were preserved. more video has been released of the lapd's fatally shooting a

homeless man on skid row this week. the police chief says the video shows the man reaching towards an officer's waistband, and the officer cries out that the man grabbed his gun. three officers opened fire. the shooting comes amid heightened tensions with police that led to protests. france's largest cell phone company has ruled out entering the italian market amid speculation. the ceo says there is no project with the telecom italia. the company has its own expansion plan. they criticized antitrust regulars, calling for rules that would reach a more level playing field for all carriers. >> the antitrust process in europe is very long and takes more than one year to get an approval. it is too much, we are a fast-changing industry with

technology, and it takes too long. >> blackberry introduces a five inch touchscreen for the lower end of the market and attempt -- in an attempt to regain customers. they call it the lead -- leap. blackberry says it will be sold via european carriers starting in april. and now to the lead -- blackberry's devices are indeed a leap. htc and samsung also unveiling new phones. the device comes at a crucial time for each company, like berries trying to reclaim the 20% market share it once held -- blackberry is trying to require the 20% market share once held. iphone skills -- sales are marketing -- skyrocketing in china. the gadgets matter? crawford del prete joins us

right here in san francisco. you shoulder walk -- shoveled your walks to get here. there's a lot of pr, and journalists and up chasing these product announcements. how do you keep track of what matters? >> we want to look at features. there is an arms race that has to do with features whether you are using image stabilization how many megapixels, what kind of sensors you are using. at the end of the day, it's about iconic. do i have the iconic product that is going to attract the next generation user? or someone off one platform to another platform? that is clearly what samsung and htc are trying to do. >> was good to specifics. -- let's get to specifics. our consumers anywhere picking phones based on the quality of the pictures? is that something that the salesperson does in the store

or happens with an online review that moves someone from one android to another android phone? >> by and large, it is socialized. you are at a bar, and someone says that's a nice photo. when you do a survey, you find it in the top five features that people are looking for, use the image. -- you do see image. you see quality of image or screen in those kinds of features. it's not like it was with pcs where people would study and compare features. it is a more social technology. i'm interested, what kind of fun was that -- phone was that? >> samsung, you are talking about and should phone that has an -- and edge phone with an image on the side. they announced it at ces at a press conference last summer in new york, they are announcing it today in barcelona. it's announced. but does that matter?

it looks different. is that the kind of thing that could drive sales? it's a social thing, people see something different in the wild, they are more interested? >> it's the start of a trend. by 2020, a significant percent of smartphones will be using multiple services. there's a product in the second generation that uses an oled display on the front, and on the back, if he were white candle display. -- a backlight kindle display. people might think the edge is silly, or kitschy, i think it's the start of a trend. you will see people experimenting in new ways. >> that suggest that the way the people buy phones is changing. they make a decision about platforms, they will have an

android or iphone, and then they go to a store to make the choice. is that the way it happens in china? >> it is. in many ways, it is a little bit less about the individual platform. that plays in the number of apps you can get access to. it plays into another important feature -- cost. i travel around the world, we do business in 60 countries. there is a reason why android has a huge market share. they are able to reach these very low and -- end customers. >> they are giving away the software. >> that's right. >> john thain is trying -- chen is trying to find a way in there. here's what he had to say. >> i'm determined to make software as a business. it's different from the past. i want to make sure that everything is agnostic. you look at the blackberry, it's niched it's limited.

i want to be will serve in higher spectrum, 100% of the market. >> does it have a shot? it's a cheaper phone. i like john chen, it seems like they have a better direction. this is back in the direction of going cheap and broad, they said they were going to get away from that. >> i would argue his first ends as the one i agree with the most, transitioning into software and services. when you look at the devices they are bringing out, you are trying to go low-end and attract new users. it's admirable, but give the people what they want. they have a loyal base of customers. they want keyboard-based devices. you want to focus on those users and retaining them. and then attracting other users perhaps on the android platform or ios with your services. more secure messaging, for example. >> is there anything emerging that you saw coming out of mobile that might be a new company or an old company find anyway? -- a new way?

>> wearables with the most efficient thing. i think give it a shot with wearable devices. i would like to congratulate samsung. whether they are doing, and what they are doing in payments -- really trying to bring out a service that could be compatible with 90% of the payment terminals that are out there that is a significant volley across the bow of apple. to factor authentication, that could set up a significant battle over the next two years. >> we will talk a lot about payments over the course of the next year. crackled oprah -- crawford del prete, thank you. "bloomberg west," will be right back. ♪

>> bloomberg top headlines. we are talking to david betray us, -- petraus, he resigned from

cia posts in 2012 after his affair with his biographer. the moment of justice announced the jp -- the department of justice announced j.p. morgan chase will pay back homeowners who were or are in bankruptcy. it will also make changes to internal operations and submit to oversight for independent compliance review. in belgium, hundreds of taxis jammed the streets of downtown brussels. they are protesting the planned reform of the taxi industry, which could lead to online car services like uber. they claim it would be destructive to business. the race to win digital payments is on, and heats up. paypal agreed to acquire

something called paydiant. is that enough to give paypal the edge? redstone spoke with hill ferguson -- brad stone spoke with hill ferguson to find out. >> it's an incredible platform that allows merchants to build custom mobile experiences on top of their own data. one of the exciting things about mobile payments is it brings to bear not just the payment part but also the ability to integrate loyalty, coupons rewards. paydiant built a perfect platform to help differentiate stores. >> paydiant was working with walmart, target, and sears, three retailers that don't offer services like apple pay right now. does that program bring paypal or give it any kind of exclusive

access to those merchants? >> those merchants want to make sure they have control over what they do in their stores. paydiant is giving them that kind of >> ability, in line with what paypal has a lisbon about giving choice -- that kind of flexibility in line with what paypal has always been about giving them choice. >> is that how paypal might distinguish or differentiate itself in mobile payments? by offering retailers more control? >> it certainly how we differentiate in online business today. through the braintree platform we support all kinds of phenotypes. we are completely -- of payment types. we are completely agnostic. if you want to accept apple pay, or android pay, we will do that for you as the merchant partner. it's right in line with how we operate our core business.

>> for the last couple of years, you offered paypal here. tell us about that -- what will be different going forward? >> paypal here is a product for small businesses, a mobile solution that allows them to collect payment in person with their customers. via credit card, or paypal, were now with the news we will be supporting a cap and pay -- tap and pay experience. if you were a small business i'm reading about all these new payment services like apple pay and samsung pay how my going to accept them? the next generation paypal device will support payment experiences. you can rest easy knowing we have you covered. >> in this emerging mobile world, when a lot of the players have is devices or platforms

which is paypal strategically bring to this new world? >> our strategy is to operate as a true platform. we are completely agnostic to any type of technology. what we want to do is make sure we are able to provide merchants the right tools to integrate payment experiences into their environment. on the consumer side, making sure we are supporting the most open digital wallet on the market. not just supporting credit cards and debit cards, but also allow you to bring in loyalty cards and coupons. and for the flyer points, any type of value you may want to store in your digital wallet -- frequent flyer points. >> how big of an advantage to mobile platform owners like apple and google, -- how big of an advantage of a half as they come into your space? >> a huge advantage, big customer bases, great technology. they are helping bring nfc to

the forefront again. for the longest time, that technology struggle to find a home. they are pushing a new standard which will pave the way for a lot of people to come in and figure out how to service their customers with that technology. it will be a dynamic industry for years to come. >> google said they are talking about android pay, a platform layer that might empower other businesses. is that good for paypal? where's that potentially a competitor? >> is another payment solution that our customers need to think about. as merchants get more and more complexity in their world we become a more and more valued partner to them. we support any and every payment type for merchants, when they want to collect money from customers. it sounds a lot like some of the efforts that have been announced, like the apple pay as well as samsung pay. we support it just like we do the others.

>> that with hill ferguson of paypal with brad stone. brad stone joins us now. really interesting developments in the payment world right now. i feel like we are scratching the surface. >> absolutely. we have seen so much here at the show from google talking about android pay samsung introducing samsung pay. the big question for paypal is, can they compete? i think hill ferguson made a good point -- there are certain merchants that don't want the apple pay solution. maybe transaction fees are too high, or they don't want a tech company between them and their customers. paypal is coming in with more merchant friendly solutions. that will be appealing to emergent like walmart or target, or cvs. these companies that haven't adopted apple pay, even though customers love it. >> redstone, thank you, -- brad

stone, thank you, with barcelona. "bloomberg west," will be -- will be back. ♪

>> and cory johnson, this is "bloomberg west." tom wheeler is at the mobile world conference in barcelona. >> last week you approved new net neutrality regulations now, you are in the belly of the beast. mobile world congress. how is the reception been? >> i don't think they are former friends. i think it's an interesting thing. how anxious everyone is to learn exactly what the rules are about , and how we structure them in such a way that they are built on the mobile model.

we build around what has worked for the last 22 years in terms of regulating the wireless industry in the united states. so we could make sure that there is adequate investments that would continue to come as a result of the fact that there is no reregulation, no terracing -- tariffing the monopoly legislation that you heard so much about. people say if i understand it better -- it significant. sprint has come out and said they supported, t-mobile says they will continue investing under this. google fiber has said even though we are now entitled to common carriers, we will continue to investigate the small wireless carriers. i bet this is something we can live with. on and on and on, there has been a list of people who said the more we get past the rhetoric the more we get to what is

really going on here, then perhaps it is something -- >> will the road ahead be that easy? should we expect litigation similar to what we saw with the 2010 rules? >> the big dogs promised they're going to litigate. everyone talks about this three unit 17 page order. -- 317 page order. the rules take up a pages, the other 309 pages are the explanation -- 8 pages, the other 309 pages are the explanation, talking to the court, because we know the big dogs are going to take it to court. >> i'm interested in your personal journey to net neutrality. you were a lobbyist for the cable industry. what was the epiphany for you and the fcc that brought about net neutrality? >> it was long before that. i have been a proponent of open networks before net neutrality

was ever invented. everyone says wheeler, former lobbyist. they also leave out former entrepreneur who started half a dozen companies former venture capitalist who understood the importance of open internet. and access to networks. i walked into this job being a strong proponent of open networks. >> it's a very public statement by the obama administration, did that play a role in the new rules? >> we have in going through a process. i proposed in february a set of rules that took a slightly different approach, using a section 706 but also asked the question should we use title two? between february and may to the middle of the summer, i met with a whole bunch of consumers innovators, investors, who all

said there's a real problem in the approach you were looking at. >> brad stone with fcc chairman tom wheeler. are we in a bubble? does it solve anything when the nasdaq closes at 5000 yesterday? we talk about that, coming up. ♪

>> you are watching "bloomberg west," will refocus on innovation, technology, and the future of business. i'm cory johnson. executives are taking apple and google seriously as potential rivals. the iphone maker pushes to have a electric car by 2020. >> these two companies intend to solely produce electric vehicles, it could go fast. if they intend come as we still do, to make a lot of engines, it will become more difficult for them. at the same time, i have to say to master the physics of automotive is not so easy. >> he said that both apple and google will attract young, tech

savvy people to the car industry. jack ma says his company followed local laws in taiwan. taiwan's investing condition -- commission asked alibaba to leave. taiwan views china as its largest political and military rival, it requires commission approval for investments. blackrock's peter fisher says the bond buying program's are not working. he said the quantitative easing is supposed to push investors into riskier assets, but that's not happening. fisher is critiquing the feds view. >> they backed themselves by having to transition from the time to path, they give us a calendar-based view of rates. now they are having to move to a data dependent view of rates. we are left between their time path, the data. >> fisher went on to say the

risk of deflation in europe might mean the rate hikes from the fed won't get the prices of long-term futures. a new report predicts a change at the top of general electric. ceo jeff knowles of ge may step down because investors are -- and molds -- immelt may step down because investors are worried. a may -- an amazing site in southern chile a volcano interrupted, prompting evacuations. it is 400 miles south of santiago and sits above a small city. it is known to have periodic eruptions every 10 to 15 years. the top story on wall street is the nasdaq. rigging 5000 for only -- breaking 5000 for only the third time in history. is this the sign of the bubble? the last time you hit 5000 was

in march 2000, days before the bubble burst. there are some things that are different, some things that are the same. joining us from san diego to discuss this is paul kedrosky and lincoln willis. let me start with you. what is not different this time? >> what's not different is investors seem to continue to be really engaged in the magic of growth and technology. similar to the way they were in 2000. although the characteristics as we will discuss the margin of this time around. the nasdaq is trading at only 1/8 of it what it was trading in 2000. the complexity of companies that make up the index itself, even apple in 2000 was only .2% of the index. now it's at 4% of that index. apple is looking more to value

company than a growth company paying dividends. >> adjusting in that. -- interesting in that. i think the price of earnings ratio is whatever was talking about. paul is pe the right number to look at? >> i don't think so. on some level, obviously, with respect to nasdaq, you kind of have to think of that in price earnings terms. what's interesting in nasdaq interestingly enough, are the things that are happening pre-nasdaq. it's what happening in these billion-dollar valuations nominally pre-ipo companies. that doesn't show up in the price-earnings multiple. that really skews what we see on nasdaq. if you look at this backlog of companies that are incredibly aggressively priced, but yet to come public, that could radically change the perception. >> i think what we care about here is not, at least what i care about is not the knuckleheads trying to trade the

cgmp it's what does this mean for economic activity and employment? what does this mean for the value of my house in the bay area, which is inflated thanks to private company valuations, the uber's and snapchat of the world. it starts to reflect what you are suggesting, that we are not looking at the leaders of the nasdaq being hyped up tech stops -- stocks like worldcom and cisco you name it from back in the day. but book value is pre-'s companies on the nasdaq, which is probably a good thing. >> it's in line with the growth expectations that people would have allocating capital to that part of their portfolio. i do think the value of your house really does reflect more paul's concern, and one of ours as well, the massive amount of

financing that was done very late in 2014, where you had almost double the rounds of $100 billion plus going to private valuation companies, the majority of which making of the technology sector on a global basis. both in terms of tech financing on a going forward basis, and whether or not that computes to us being able to continue apace and create jobs, and whether or not these top guys raising billion-dollar valuations are soaking up the kind of capital that might be more evenly distributed across earlier stage companies. it's a kind of technology question we should of been asking back in 2000. >> paul, i think this is where the income inequality debate starts to matter. if much of economic activity is concentrated where the wealth is, but those spenders can choose not to spend if there is a slight downturn, suddenly all of the rest of america, and the world, could suffer from that slight pullback in discretionary

income of the extort nearly rich. >> for sure -- extraordinarily rich. >> for sure. and they don't benefit like the rich do. it's more difficult to buy shares, you can't even participate in the market and game alongside of the appreciation in these names. there's a famous bumper sticker in the valley, where they said please god, just give me one more bubble, this time i will know what to do. that's what happened. people realized i need to own this stuff even sooner. the effect in terms of income inequality is an example is that people have moved right out of the public markets and have taken away opportunity for wealth creation among a whole class of people who can't participate and watch all this happening off nasdaq. >> maybe it's a good thing. let's talk about the value creation. because you have companies like google and yahoo!, and apple i mean, doing things different, they are renting cash.

it's a very different thing than what we saw back in the bubble. you have the numbers we have been looking at the last couple of days, trying to think about how to approach this. generation for the nasdaq is through the roof, that's nothing but good, right lincoln? >> nasdaq is looking a little more s&ppish. certainly the nasdaq isn't a value place for people to be putting money, it's certainly the top names in the cap weighted nasdaq are. and they are paying dividends in precinct in fashion. >> paul kedrosky and lincoln ellis of westwood capital, thank you. "bloomberg west," will be right back. ♪

>> and cory johnson, this is "bloomberg west." at&t hopes for another line of growth via wi-fi.

lg and 5g in connected horrors. brad stone spoke with glenn lori about at&t's road trip. >> our visit is about every thing is connected. the industrial internet of things, it's all about businesses wanting to be better and more productive. you have the car business, which for us is one of the greatest opportunities. we see the car is the next in device. we announced in third quarter we will have connected 50% of the cars in the united states this year. at the show we have a few partners with us, but really what it is is about putting elsie and the vehicles utilizing that to make the car a safer place, a more productive place, and hope ling -- hopefully getting vehicle to vehicle. infrastructure that makes smart cities. >> why is at&t's network that are suited for this market? >> we have the best network in the united states.

it's more about the platforms you build around iot. we started on this journey a long time ago. we invested early, we actually sell platforms that allow us to be better partners than anyone else in the world. i'm really excited about where we are, really excited about the partnerships we have. and yes we are leading the stage. >> s.e.c. chairman -- fcc chairman tom wheeler is with us and they approve new net neutrality rules that might govern wireless networks. what do you say to tom today if you see him, and how did you react to the rules? >> is tough to react to them. we haven't seen the order. we know what's come out, is supposed to come out of here the next couple of weeks. i think we will react to that once we see it. at&t has said very clearly what our position is, we are pro-net neutrality. the question is how, how you govern that? we will see what happens, we see

what it looks like. at this point, we are optimistic that we can make it work. >> google is one of your big partners. i was talking to them yesterday he talked about perhaps introducing a google wireless network. with abby competition for at&t -- would that be competition for at&t? >> sure. i don't know all the details of what they're going to do. i think the key is customers deserve choice. if google wants to come in that's great. obviously, we are a partner with them. one of the things we have in our world of wireless is a lot of partners. we also compete with. that's fine. we'll see what they are working on, and talk to them and see where that goes. >> i'm hearing the term 5g more and more. i was just getting used to 4g.

what does 5g bring to customers? >> 4g is great. it's phenomenal. what we're hearing is that 5g is coming. there's a lot of discussion. all of that hasn't been decided on come executives going to be. one of the things we're hearing a lot is a real concern around we have to do more for the internet of things. we were talking about cars and connected homes, we're talking about connecting everything. we know 5g will bring lower latency, faster speeds. we also believe it's going to be a network that also has a layer built for iot which for us means lower power, longer battery life, those types of things. i'm very excited about it. 4g is here for a while. 5g is further out. right now we have all the capabilities to do the things we need to do. it excited to see what's next. -- exciting to see what's next. >> do you think the new net

neutrality will inspire people to invest? >> at&t has been clear on our stance. we put on a blog talking about those things. i think depending on what the order says, we will see what it says. and then we react. >> last question. this is your sixth or seventh mobile run. you'll been able to escape the confines of the at&t area, what is different this year? >> i think the thing, if you go back six or seven years ago, no one has talked about iot. seven years ago, we started talking about the early days of smartphones. the iphone launched in mid-2007. the internet of things and connected devices seems to be kind of a focus. you walk around and see cars that know where we're going. that is showing me the whole world is going to be connected, which is what we have been saying for quite a while. that's exciting. >> brad stone, glenn lori seemed very excited.

15 counts of him using the word excited, but he didn't want to answer any questions about the neutrality. that's a big deal. >> at&t is going to sue. they want to stop these new regulations from taking place. at&t and verizon want to be regulated as information services, not telecommunications companies, subject to common carrier rules. they want to manage their own networks and introduce new fees were they see fit. holding out this prospect that maybe they won't invest as much is clearly a very competitive industry. we heard the google might be getting into the business of creating its own wireless networks. at&t is not going to slow down but they will do everything in their power, verizon as well, to force the fcc to change tactics on these net neutrality rules. >> this could have a big impact on capital spending plans for 5g and they did before 5g.

-- maybe before 5g. >> we will see. if a slowdown, they risk ending laughed. sprint came out for the new rules. it's unclear whether they can really afford to hold back with a new investments. >> brad stone, thank you. interesting things going on in barcelona. other interesting things on the bloomberg top headlines. in moscow, thousands of mourners and dignitaries paid their respects for the slain russian opposition leader. gary kasparov spoke of possible motives behind his murder. >> when you investigate the crime you should look for motive and capability. he was the most critical -- vocal critic of putin's regime of. most importantly, he was about to release a new report about the presence of russian troops in eastern ukraine. >> reporters are calling for new protests against president

vladimir putin. best buy is boosting its dividend payment to grapple with a slowdown in sales. they will offer a special dividend $.51, increases quarterly, payout at $.23. best buy is starting a second phase of cost-cutting hoping to/ $200 million in operating expenses or three years. and live from beijing, it's saturday night. the chinese version of the long-running comedy show is in the works for the chinese version. lorne michael is teaming up with a chinese video streaming service that already streams the u.s. version of the show in china. "bottom line," coming up at the top of the hour. mark joins us from new york. >> the debate continues in washington about prime minister netanyahu's speech. he says it was not meant to be

offensive, nearly a warning on the merits of a nuclear iran. nancy pelosi do the remarks as in her words, the insults of the intelligence of the united states. what is the state of u.s. is really -- is really -- israeli affairs? back to you in san francisco. >> mark, thank you. "bloomberg west." ♪

>> and cory johnson, this is "bloomberg west." fab.com went from hot to not, a cautionary tale for a lot of companies. the online retailer known for eccentric items. they got a $1 billion valuation

a year ago today it was put up for $15 million. sarah covers fab she is fab herself. from $1 billion to $50 million that's the wrong direction. >> bloomberg wrote the story, that there was trouble brewing. there were already executives leaving, already revenue projections missed. already investors who weren't quite sure where things were going. and yet the company was able to raise around $345 million or more to fuel its vision. >> they have blown through that if they are getting purchased for $15 million. >> the saga is not over. the $15 million they were purchased for gets reinvested into a new project that the ceo of fab had.

he started this out as fabulous a gay social network, and it launched is fab in 2011. now it's being launched again. >> it's a relaunch with new ownership. it never had $1 billion, it was valued at that. >> fab is sold off. >> where did they blow this money? how they figured out how to start a business without blowing money? >> it's unclear. fab went through a lot of money expanding internationally getting warehouses to move to inventory model, building up those warehouses. it's difficult to figure out what things people would want to buy, what andy warhol cubes that were decorative the cost $349 how many of those should you put in your warehouse? >> inventory management is rough.

these guys were doing $200 million when they did their last round. who were the genius investors who put money into it and then evaluation? >> everyone from andreessen to 10 sent? >> they took a flyer on this thing in a late stage a lost of all. >> who knows? jason goldberg says he is using that money to try and make some thing happen. >> a cautionary tale, and it's not going to be the last one. sara, thank you. -- sarah thank you. you can watch us streaming on your tablet, phone bloomberg.com, apple tv, and amazon fire tv. we will see with more "bloomberg west," tomorrow. ♪

>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." the intersection of business and economics with a mainstream perspective. to our viewers in the united states, and from those of you joining us around the world, welcome. we have full coverage of the stocks in stories making headlines on this tuesday. julie hyman looks at the ceo comings and goings in retail. alix steel examines exxon's expansion into russia. and peter cook will have the details of israeli prime