>> pinterest unlocks. what it means for sites like google and the amazon. ♪ emily: i am emily chang welcome to a special edition of "bloomberg west." i am coming to you live from las vegas. hewlett-packard is hosting its annual discover conference. later in the program, all the -- i will be joined by hp ceco meg whitman. you can catch that interview tomorrow. also, coming up it outlining

its ipo plans. and, why aren't there more tech unicorns? all that ahead on "bloomberg west." first, to the lead -- pinterest moves towards e-commerce. later this month, pinners will be able to purchase "viable pins" directly through the website. shopify, nordstrom and macy's are among the retailers making among 2 million products immediately available through pinterest. you will be able to pay with apple pay for your credit card. pinterest is working with stripe and braintree as payment partners. sarah covers pinterest and was at their headquarters today. pinterest users like myself have wanted to see the company get into this. investors have wanted to see this. is this going to make me happy? will i need to leave pinterest to find an item if i want to buy it?

sarah: they want to make this seamlessly integrated into the app as possible. so you will have tiny blue , price tags at the bottom of the pins you see normally on the site. it will still be underneath the picture, it will still look just like pinterest. whether that changes the experience of the site, and makes it more about inspiration instead of purchasing, we have yet to see. it is true that consumers have been asking for this for a while. mark: sarah, hang on, because i

want to bring in one of pinterest's viable pins partners. also with us, a longtime former google executive. i will start with you -- what is the nature of your partnership with pinterest? you said if they are the number two referrer of traffic. i wonder what number one is. >> we are excited to be working with the pinterest team. we will be able to deliver to customers what they always wanted, not just the aspirational cataloging of things that are interesting to them, the opportunity to buy those products. all shopify merchants now have the opportunity to take this unique, discoverable goods and the brand-new products that they have met and to bring them directly to the pinterest ecosystem. products that you are not specifically looking for, but that you admire and really inspire you. that is what pinterest is making possible today. emily: who is the number one referrer to shopify today? mark: in the past, facebook has been the number one driver of traffic. pinterest has been growing quite rapidly. in data we released last week, we showed they are the second-highest referrer.

but they actually represented the highest average order value referred to shopify stores. emily: interesting. now, we actually talked with ken about this pivot towards e-commerce. take a listen to what he had to say. >> i think social networks are primarily about sharing things that you did in the past or in the moment, like your friends and family. that is not what pinterest is. pinterest is for you to plan your future. what do you want to cook for dinner tonight? what do you want to buy at the mall this weekend? where do you want to travel this summer? it is about your future, not really about sharing things with your family necessarily. emily: ben, i will bring you in on this. shopify release date of that intent to buy on pinterest is huge, but still a fairly small company. 70 million users, 75%. how will this supercharged growth -- will it?

ben: it could well do. if people know they can curate and purchase all in the same place, they should get more users rather than less. we work with lots of advertisers. typically they say until a site has at least 50 million users in the u.s., they are not interesting in advertising in a new place. pinterest is being different more like a search engine than a social network. therefore the potential revenue per user is probably higher than with many other social networks. people are curating things rather than planning to buy things. emily: sarah, should google and amazon be worried? sarah: definitely. if you look at what pinterest

has achieved, they are able to say that this certain person is interested in buying this certain thing, we can show it to them and they can click on it and buy it directly through the site. in the past, some pinners have gone to amazon and google to find that item. now they can do it directly through pinterest. emily: and as we talked about, google is working on a buy button. facebook as well, twitter as well. ben, where do you see pinterest in the future with the giants were the traffic really is though intent to buy may not be that strong yet?

ben: people are taking to twitter to find out what their favorite people are doing. as opposed to buying something. pinterest makes a lot more sense. clearly for google it would make sense too. in some essence, they are catching up with amazon but in a more socially friendly way. advertisers will not say "i'm not going to do facebook or pinterest." they will give both a try. if i have to find what is the higher monetizing button, it would probably be pinterest in terms of user. facebook has a lot of traffic, so they could try that too. emily: viable pins rolling out later this month. thank you all. we have new details on fitbit's plan to go public. the maker of the wearable fitness tracker is seeking $478 million in an ipo offering shares at $14-$16 apiece. meaning that fitbit could reach a valuation of more than $3 billion. sales shot up to $45 million last year, while turning a $745 million -- $745 million

last year while turning a profit of $100 million. but it is not an easy sell to investors. one third of people who wear these kinds of gadgets typically ditch them after six months. i have a few of them in my desk drawer. there are competitors of apple to garmin. then there is the drama with java. they are accused of plundering secrets from its rival, which could turn into a an expensive court battle. but wearables is an exploding business expected to triple in the next three years. fitbit will be on the new york stock strange as fit. the u.s. senate's passing a bill that reforms how the nsa accesses u.s. telephone records. the bill also reauthorized expired surveillance rules. we talked about this yesterday. the house has already passed the bill. president obama is expected to sign it into law. coming up, closing the gap between the internet revolution and the clasroom. i will be joined by the ceo of veteran ed-tech company, blackboard. and, before we had to break, check out this video of a teeny

tiny drone. this black hornet weighs 18 grams, and tested by the u.s. special forces. it can fly up to 25 minutes and can be used for covert missions. we will be right back. ♪

♪ emily: have you ever wondered what school would be like if it was invented today? an ex-googler created a startup to answer that question. he has big names behind his company. and last month, it announced $100 million in funding. but what is next in education and ed-tech specifically? joining me is ceo of blackboard, which has developed an online dashboard for students and teachers to share knowledge. jay, you have been in this education technology business for a long time. i am curious, we see a lot of venture capital flowing into ed tech, but you don't see those unicorn valuations very often. why is it so difficult to scale in education technology business? jay: first, thanks for having me on the show.

there is a lot of money flowing into education technology. the system is changing before our very eyes. if you think about the real change agent, it is the student. the consumer of education is the student, and for far too long it has not been focused on the personality of the student. the system is changing around the student. the student has changed from traditional learner, which is four year attendee of institutions to more inflexible -- more flexible institutions. they want social media to help form their education. a lot of ed tech companies have a hard time penetrating that. the system is changing as we speak. this is very revolutionary right now. emily: it can expand your horizons, it also limits them

and limit human interaction. ben, you have three kids educated partially in the united kingdom and the u.s. you have observed some interesting differences will stop ben: they have been to some good schools but also some really bad ones. why can't they learn from the best teacher in the world? it does not matter if you are living in delhi, or somewhere else. your teacher is no good or does not turn up, you can learn from the best people. the role of the teacher needs to be much more around helping kids reflect on what they have learned rather than teaching them stuff. the content out there is amazing. i am absolutely on board. they should be totally transformed. emily: jay, what are one of the most innovative things you are seeing? schools trying to reinvent school from the very beginning. what do you think about some of the ideas how they come up with? what does it look like? jay: there are a lot of really cool things happening. i think ben is 100% right. the paradigm shift that has happened with technology is allowing these cool things to happen. i was coming over here from new york last month. i got an uber car, and the driver has a laptop up on his

arm rest. he had my software on it. i asked what he is doing with it. he is a university of new york student, and virtually going to school. he does not go to class, he is getting his phd in between fares. that is the nontraditional student. 85% of nontraditional students are that. with blackboard, we are trying to change our entire portfolio of technologies around that student. whether it is virtual classrooms inside the learning management tool, whether it is a consistent user interface, and whether it is consolidating the data under the student's behavior, allowing them and their teachers to analyze so that intervention can happen before problems occur. emily: blackboard ceo, and ben legg, thank you so much for joining us. obviously a space we will continue to watch that is rapidly evolving.

in today's hack of the day, we are focused on the irs. remember the last month, the agency said that identity thieves accessed tax returns of millions of people? -- of more than 100,000 people? taxpayers? well, today we learned about 13,000 fake returns have been used with that information adding up to an estimated loss of $39 million for the government. it came from a testimony by the irs inspector general to the senate finance committee today. he warned that the agency's push to expand into online services makes it more likely that the irs will be hit by hackers and other fraudsters again. and apparently, this was just a drop in the bucket. george says the irs lost more than $5 billion to refund costs in 2013. -- refund fraud in 2013. coming up, hp dream machine. we take a look at hp supercomputer as the company compares for its historic split. plus, facebook wants its programs to think like a human brain.

details of its latest ai investments, next. ♪

emily: it is time for the daily byte, one number that tells a whole lot. and today it is 6, the number of researchers hired for facebook's artificial intelligence lab in paris. there, facebook is focusing on deep learning software to focus on images the way a human brain does. it is the first one in addition to one in new york city. each lab will employ nearly 40-50 people. in a blog post today, they say the paris lab will take on the

strong ai research community. google's cardboard project came from two employees formerly in paris. now to hewlett-packard's big moon shot, the machine, a supercomputer built to deal with the demands of big data. how boldis hp's vision for the machine, and how well are in the work on it after the split? we are joined from las vegas after the discover conference. there is so much fascination around this machine. but i am curious if you can tell us -- if you succeed, what is possible? i understand it is basically a data center that can fit in the size of a refrigerator, and is completely low-power.

martin: emily, thanks for having me. i really appreciate it. you made a comment when he started that it is about a supercomputer. really, the machine is an architecture that thinks about the supercomputer all the way down into small devices and phones. it covers the whole gamut. i will get to the question about when we separate. we made a huge amount of progress in the past year on the machine. let me give you an example of the things that the machine will be able to do that might resonate with a lot of people watching. i'm a business traveler and i fly a lot. one of the things that sometimes happens is you land at an airport in the pilot says, good news, we got here a half-hour early, bad news, we have no gate. and you look outside the window, and you see all of

these empty dates, and you say how can this happen? just turn and park the plane why is it so hard? for airlines, that is a very hard thing to solve dealing with weather events and scheduling changes. what this machine allows us to do is take this takes the entire network -- the ground crew, the pilot, the flight attendant, for every airport in the world -- and have them on the machine in memory at the same time so that we can solve these problems. when we see these news events of a big weather storm, etc. now the airlines have the mechanism to route around that. that is one example of what the machine will allow us to do going forward. emily: give us an update on the timing and the roadmap for this. i understand a fundamental component of the machine, which is a super, low-power chip which will vastly increase the data storage, you said that will be available next year. you said you are working on timing for a test vehicle. where are you in that process? martin: as i said, we made

tremendous progress on all layers of the machine. our goal is to have a prototype of the machine running around mid next year, if all goes well. if i announced the machine, i said this is a research project, we will have ups and downs. the target is for the final part of the decade, that has not changed. but we are working on having that demonstration vehicle with memory happening around you middle of next year, if all goes well. emily: interesting. moon shots are moon shots, and they are so because they can fail. what happens if this fails? how much does hp have riding on this? martin: that is a fantastic question. the beauty of the machine is that it is a collection of technologies. we have technologies around the processing engine, technologies around what we call the fabric where we use light instead of copper in order to communicate.

we have the memory technology that you talked about. there are more of them. the -- and each one of these technologies are valuable in its own right. we are just using the machine as a vehicle to bring them all together. even if, as you said, the moon shot doesn't occur, each one of these technologies can have a dramatic effect on how we do computing using a conventional architecture today. we are not doing an all or nothing approach, we have so many steps in between. that is why making progress on every one of those steps is important. emily: you have been at hp for 30 years.

which means you have seen so many leadership changes and the reinventions of this company. how would you describe the energy level at hp and your own confidence that what meg whitman is doing, splitting the company, is the right thing and will turn the company around? martin: great point. i have lived through every non-founder ceo this company has had. it has been a tremendous ride. part of the strength of hp has been its ability to reinvent itself from the minicomputer era, the pc era, the list goes on. we are reinventing ourselves whether it is the cloud air act, the big data it are a. -- whether it is the cloud era, the big data era whatever. the energy is through the roof. everybody is very excited on both sides of the separation because of what it enables. it allows the ceo for hp ink to really focus on the pc and

printer market and drive that forward. it allows meg whitman to drive the enterprise side, that is where all of the chief technologies are. the energy level is as high as i have seen in my career. emily: quickly, we have about 30 seconds left. where do you see hp e, an hp enterprise in 10 years? martin: where do i seek hewlett-packard enterprise in 10 years? i see us as reinventing the foundation of the computing architecture and being part of every data center that drives all of the applications for consumers. we are the innovator that drives every new technology difference in the industry. i think that is going to continue. and in 10 years, i am looking forward for the machine to be able to change the industry in solving problems we can't even think about solving today. emily: martin fink, hp cto and labs director. thanks so much for sharing your vision. great to have you with us. that does it for this special edition of "bloomberg west." more las vegas tomorrow. we will bring you my conversation with hp ceo meg whitman and see you again 1:30 p.m. pacific tomorrow. meg whitman with us tomorrow. ♪

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