emily: dick costolo says he won't get in the way. what that means for the search for twitter's next leader. ♪ emily: i am emily chang. welcome to a special edition of "bloomberg west." we are live in san francisco. investors bet on yahoo!. ceo marissa mayer says her plan to spin off the company's ali baba stake is going according to plan. we will hear from the most innovative entrepreneurs at the bloomberg technology conference.

that is all next. we begin with outgoing twitter ceo dick costolo. he spoke to us earlier today just days after his announcement that he is out of the top job at twitter. the stock fell to its lowest point after a fresh analyst downgrade. investors are awaiting any sign of a change in strategy, though costolo didn't indicate that would be the case. he spoke to bloomberg businessweek about what it takes to be a good ceo. >> great ceos are a balance of resilience, gritty and resilient, but self-aware. you have to have that combination. jack is obviously the inventor of the product and co-founder of

the company, but just as importantly, he has this fluency about the way he thinks about the product and the way he thinks about its potential that almost is remarkable. >> the doubt, the skepticism, is this a real search? whether jack is being queued up as the next ceo because he wants it, the founder and knows the product, or whether he wants to go out and cast a wide net. >> the board is doing a legitimate search. there is a specific search committee. >> will you return to stand up comedy? >> i don't think it would be a smart move for me to return to stand up comedy. [laughter] look, i get heckled for free

now. why go travel to des moines and go to the laugh track to get heckled by people there? emily: at least he still has a sense of humor. twitter ceo dick costolo there. for more on his comments, kevin scott. i will start with you. dick did not get specific about what kind of ceo he wants, but he did give some clues. what was your takeaway? >> he is a top interview particularly right now. a couple of things jumped out at me. the way he sings the praises of jack dorsey. he says nobody understands the product better. everyone else brings conceptual baggage to what twitter is. clearly, he loves jack. they have a strong relationship. i asked him to talk about

anthony noto and dick adams. the story he told about adam staying up all night shows how much faith he has in dick adams. -- faith dic ha -- dick had in adam. emily: there is a lot of talk that they are not going to do a full search. kevin: i think they are in a strong position. dick said the company has the blessing of being loved by so many people. they have a great team. emily: it has also been bombarded by analysts and investors who are not happy. kevin: i think they have a very big business already. they just need to focus on the basics, on what is making that

business run. with the new leader, they will need someone who can inspire what is already a really talented team and start delivering on the potential of the company. emily: he insisted he has no idea what he will do next. brad: it may be true in the short term. the guy has been under fire for five straight years. he definitely need some time off. i bet we see him start another company. emily: he is a serial entrepreneur. we will of course be watching. dick costolo said he will be on the board at twitter. i do want to talk about yahoo! another interview with marissa mayer, a conversation on the innovation and future at yahoo!. she started explaining whether the nfl partnership made it a media company.

>> the nfl opportunity was at one point our achille's heel. it now becomes a real opportunity and strength. when the nfl goes digital, we may never be the biggest technology company, but we are the biggest technology company that gets media. we are the biggest media company that gets tech. >> the other piece is about the spinoff of alibaba and yahoo! small business yahoo! said that transaction is going to proceed. what gives you confidence in the light of the fact that the irs has been closely looking at transactions of that nature? >> we are proceeding with the basis of understanding on the changes that have been communicated today. they don't apply to previously

received requests for rulings. our ruling -- we filed for it well in advance. the other thing that gave us some confidence is that it doesn't seem these proposed changes are contemplating changing the applicable law, and so more about the processes around these type of transactions. less about the applicable law. we have also been reassured that this wasn't something that was specific to yahoo! or in response to a particular transaction. many of these transactions are happening at any given time. i can't presume to speak for the irs, but given our understanding about fact patterns, we feel that we should proceed with the proposed transaction is planned. >> how is yahoo! thinking about transactions these days? how about acquiring large

companies for the talent they bring in the door? >> we have a three-pronged strategy on acquisitions. the talent acquisitions are about hiring teams. today we do slightly fewer, but if we saw a great team, we would still do a talent acquisition of that type. now it's on building blocks and larger strategic acquisitions. building blocks are alligned with search, indications, and digital. emily: brad, let's talk about acquisitions and alibaba. she confirms the spinoff was going according to plan, despite the changes. how significant is that? brad: it's hugely significant. a big part of that market cap is investors expectations around the alibaba spinoff.

marissa said today that they are grandfathered in. we will see what the irs says. for now, it's good news. emily: we continue to ask this question. is yahoo! a media company or technology company? kevin, how satisfied were you with her answer that we can be both, and being both is a strength? kevin: i think it can be a strength. one of the things in the valley is a typical engineering mindset that doesn't really understand a typical media mindset, and that's one of yahoo's strengths. they have a lot of history there. the direction she is pushing the company in is good. emily: it sounds to me that yahoo! is still on the hunt. would you agree? brad: i don't think she has the

runway she had when she joined the company. if they do acquisitions, they will be small ones. she is certainly spending on content now. that nfl deal was not awarded to yahoo! by the nfl. they paid for it. emily: marissa said something about yahoo! being a scary place when talking about acquisitions. a lot of people said, i don't want to come work for yahoo!. what do you think the perception is of selling to yahoo! is at this stage? kevin: certainly she has improved things. she understands the three things you have to get right for acquisitions to proceed. products synergy so the thing you're buying augment the thing you're trying to accomplish in your company. you have to make sure that the vision aligns with what you want

them to do inside your big enterprise. you have to get them enough space to operate so you don't crush them with bureaucracy and buy them a little bit of freedom. i think she knows all this stuff. they bought a lot of companies. it's hard work. i think it makes a lot of sense for them to digest what they have swallowed rather than trying to pile on more big acquisitions. emily: we will have to see if these acquisitions stand the test of time. kevin, you'll be going onstage later today. thank you very much. brad, i believe your wanted back there. thank you so much for joining us. coming up, one of the worlds natural super materials is spider silk. we will take a look at the scientists who have grown the silk in a lab.

special coverage continues next. ♪

>> the company wouldn't want me to code professionally. i'm pretty rusty. i do like to code for fun.

i have a couple of things that i like to do at home, scripts i like to write. emily: i love that anecdote. yahoo! ceo marissa mayer earlier today from the bloomberg technology conference going on behind me in san francisco. speaking of another company, spider silk is one of nature's most durable materials, five times stronger than steel and more elastic than rubber bands. scientists have been trying to make synthetic spider silk for a long time, but nobody has been able to crack the code until now. a team working in the bay area have found a way to make lab grown silk. they have raised $32 million to scale it up. we went to see how they do it. ♪ >> the idea came up as an outcome of graduate school. we were working on a project to understand how how spider silk

worked and realized there was an chance for commercial application. >> you cannot farm spiders. spiders are territorial. people have been trying to pursue this area of research for decades. we have come up with a template to make proteins to form fibers. each one has properties for the function it is supposed to perform. spider silk is the silk that holds up the web. >> there are four parts that go into making the fiber, research and development, where we design a protein and make it in the lab. we grow it in fermentation where we make a lot of proteins. we recover that from fermentation and spin fibers from it.

it opens up a nearly infinite space for the kinds of materials you can make. emily: such a fascinating story. joining me is dan whitmire. also, tom giles, managing editor for bloomberg. it's amazing what you guys are working on. spider silk has incredible properties. can you replicate that? >> yes. this is the challenge of technology has been trying to solve. many have tried. a lot of things have changed. we can do what we would never have dreamed of a decade ago. emily: where are you when it comes to getting clothing on the commercial market? >> we are in the process of product development, scale up,

and launch. >> tell us about what the funding allows you to do. >> in the early days, it was scientific challenges. the little pieces that had to be filled in to build the technology platform. this is big. it has potential. now it is about how you make enough materials so every consumer can have a product made of this material. emily: what clothing do you imagine will be made by the silk? >> everything, making it more comfortable. you name it, we can work on it from active wear apparel to what you wear in the office or with your friends. >> do you envision non-apparel uses as well? >> everything from fishing lines to medical sutures to medical implants.

as a startup, we need to pick one thing and do it really well. we have chosen consumer apparel first. emily: why should i choose active wear over lululemon? >> you always want higher quality, more durability, easier to care for. we can do all of it. emily: what else is happening in the world of textile and fabric innovation? >> for a long time, it was based on petroleum-based polymers. they have been around for a long time. we think this is something new that can really be a game changer. emily: you guys recently moved from san francisco to emeryville? >> is that a function of the bubble, the boom, we are seeing in san francisco real estate? is it more practical? >> it's both. san francisco is a hard place to

secure office space. we also have a laboratory and small-scale research. there was none available in the city. we found something ready to go and moved to emeryville. emily: i'm still waiting for my spider silk jumpsuit, i don't know about you. thank you for joining us. coming up, we will speak with the ceo and founder of stitch fix. you don't want to miss this. ♪

emily: welcome back. i am emily chang in san francisco. it is time for the daily byte. 10 million. that is the number of cyber attacks the opm faces every month. opm disclosed that hackers have stolen at least four million records from federal employees. today, hackers are not just looking for government or corporate data. cardinals may have broken into front office computers of the houston astros. both the mlb and astros say they are cooperating with the inquiry. back to the conference. we've been talking all day about how code is changing and disrupting every industry, not the least of which is fashion. joining me now is katrina lake the ceo and co-founder of stitch

fix, the interesting way to discover new things to wear. start off by explaining how it works. >> as a client, you sign up and we will have a stylist put together five things for you to try on. it's like having a boutique send your favorite items to a fitting room, delivered to your home. you can find out what you don't want and keep what you want. emily: i had two out of five things that i was going to keep. >> you can explore what works for you. two things seem like a good number where you will be

satisfied and excited about what you are keeping. emily: one thing that surprised me is that you have 2000 employees now. i wonder how you scaled it. making sure that you are attending to the personal desires of every single customer is a difficult job. how are you doing that? >> that personalization is what is unique about stitch fix. the way were able to achieve that is combining the best of both worlds of art and science. which is why we are here at a technology conference. we have dozens of engineers and others working with us to build tools so our stylist can use algorithms to send you the best picks, stocking the right styles, so we use the best of silicon valley combined with retail to deliver this personalized experience that is scalable. emily: one of the things that i enjoyed was these style cards, with different ways to style each item. it was not just a shirt in a box. pinterest, you ask people to send you style boards.

how optimistic are you about buy buttons? we've yet to see the progress. >> i think the buy button the way people are finding inspiration, less and less in the pages of magazines or stores, but they're having it on pinterest and instagram. emily: people will buy with the buy button. >> i think so. thank you for being here katrina. thank you for joining us. that is it from the bloomberg technology conference in san francisco. we have a great program for the rest of the day. the main actor on the hit show "silicon valley," who, spoiler alert, may be out of a job. that is coming up next. ♪

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