>> returning as a ceo after the resignation of ellen pao. ♪ emily: i am emily chang, and this is "bloomberg west." and losing a pioneer, looking at the legacy of the nintendo head. and cyber security, leading at investment.

i will be joined by the company's ceo. and a founder and ceo is here to unveil the newest company from innovation, and all of that is ahead. and first to our lead, a debate is simmering at reddit as pao announced her resignation after 200,000 people called for her to step down. she said she is stepping down because they asked to have greater user growth than she thought she could deliver, and the cofounder steve huffman, is taking the reins. he already says he plans to improve the company relationship with reddit users and to define their content policy. huffman says he is not going to

stop some of her policies. what does this mean for the future of reddit? we are joined from seattle, a man credited with making the idea of an internet meme mainstream, and with me is a paypal cofounder as a special guest toes, also the chairman of yelp. so thank you very much. i am so curious what your take is. max: it is like a silicon valley soap opera playing out. it is kind of sad and we should be focused on the users. and it will be a really tough job. an incredibly vocal, active user base, and a company that has to depend on that user days for all of the way it gets its traffic.

these people need to believe the management team has their best interest in mind, and when they do not, they get angry. so, i wonder but the history of reddit is replete with these complicated upheavals. emily: sam, a boardmember, said in his post that it was sickening to see some of the rings that -- some of the things that redditers has said about pao. it will never be a truly great community. do you think that reddit should be the place for this sort of ugly underbelly of the internet? >> anytime you scale a business you're going to see amazing content as well as terrible people acting terribly, but what is important is to look at the gender dynamically she is a

female ceo, having gone through a gender lawsuit, and the vitriol regarding her gender is what caused a lot of people to say this is absolutely terrible, and resisting the calls from the community even more so. emily: so do you think that steve has a better chance just because he is a man? ben: i see that steve has a better chance not because he is a mantra because he was a cofounder. one of the things that ellen lacked was not having the ability to say i am one of you. i am authentically one of you from the beginning. that is something the cofounders can actually do. it will give cofounders a lot more leeway, even though they may not be the best choice. emily: max, you are naughty. they are claiming freedom of speech, but you see anti-women,

anti-somatic racist comments on reddit. is that kind of stuff ok if they want to become a strong business? not just a community, but a business? max: i do not think it is ok period. hate speech is not acceptable. emily: so how does reddit handle that? max: saying this is what is ok and this is what is not is necessary. frankly, i do not think reddit wants them to stick around if they become a big him but he that is a source of information, news opinions, maybe controversial opinions, but in the name of stability. people need a person to tell the committee, hey, here is how it is going to be from now on as a founder. emily: i went to hear from both of you, and, ben, i will start with you. ben: the traffic has gone to

mobile. not just the updating of the technology, but consumption has really changed. facebook pinterest twitter. now they can actually fill very different roles, and reddit's core value is that it can grow into an anonymous community and the same tactic that allows people to flower their creativity and expression is the same one that actually also harbors some of these darker sides. emily: quickly, max, can reddit be a strong business? max: it is the anonymous role of the public, which sometimes turns ugly, and there is interesting traffic. emily: all right, max with me for the half-hour, and ben,

thank you for joining us, and we will see what kind of move steve makes. and apple dominating the smart phone market, and i mean dominating. the iphone to a colossal 92% of the industry operating income in the last market despite making up only 20% of the overall smart row market, and if you are done checking the market, samsung's 15% puts the market past 100%. that is because the remaining makers, lenovo and others, they either broke even or took losses. next tuesday, people will be looking for the growth. up next, hot news from the world of cyber security. ground strike poses a major fund rally. both companies, after the break. and the legacy of the nintendo ceo satoru iwata and who may

be the next leader, and we will leave you with a picture of the pixar creation. peekaboo robot. they plan to continue to develop the robot to give it more human emotions. ♪

emily: now, to a major loss at nintendo. the company's president and ceo has died of cancer at age 55. satoru iwata he began in the 80's, becoming president, launching the famous wii console

as well as the ds and the game cube, and he was much more than a figurehead. he was respected by colleagues and beloved by fans, and there were has tags, thank you, iwata. max levchin is still with me. but i will start with you. how big of a loss is this for nintendo and for the gaming industry? >> this is a huge loss for nintendo and for the gaming industry. if you look at the executives who have run the gaming companies or microsoft or sony, a lot of times, we have the gaming development and he was somebody who was through and through a gamer and not necessarily just a multimedia guy, so he is heartfelt by everybody, and it is no surprise that it is all over twitter and worldwide today.

emily: we heard from another nintendo guinea executive who told us it will be years before the impact on nintendo and the full gaming industry will be fully appreciated. for most of us fortunate to work with them is his mentorship and especially his friendship. max, you actually spent a lot of time in the gaming space. what do you think about this loss? max: it was a tragedy, frankly. the man was in his prime, and he could have made another tremendous set of contributions. when i was studying his work, he reinvented the rules anytime he did not like the battle. he went up against playstation and the xbox 360 by creating this tiny low powered console and redefining what it meant to play games at home. he introduced the games that the nintendo wii was so famous for mostly because he realized he could not be to the other guys

and his inventiveness was just amazing. this is sad to hear. emily: so, p.j., where does intend to go from here? in terms of important products right now, and who is next to lead this company? p.j.: adding that is a great question. a lot of the legacy is not only did he find the secret sauce for the wii and create something that was a great legacy of hardware, but he also helped transition the company into the digital age and set them up for new revenue streams that they had never seen before, and the partnership with theda and on the mobile front is huge. and now the toy business, which you are going to see plenty of this holiday season everywhere in retail here in the u.s. and then you have the next likely, logical expansion, which would be what do you do with the ip with tv and movies, so all of

these things that are coming have been set up with iwata and his leadership and these are things we are going to say. and you mentioned reggie. reggie is a great gentleman who is running north america quite successfully. i am not sure if they bring some of the over from the u.s., or do they stay locally, and stay with somebody in the japanese corporate culture background? i think it will be likely from japan. emily: interesting. i do know that reggie has his own kind of fan base and the gaming world. ok, p.j. mcnealy, thank you for joining us. now, if you needed any further evidence that security is red hot right now crowd strike has just raised $100 million in a funding round led by google capital. i am joined by two at the center.

and max is still with us, and george, i will start with you. $100 million. you guys are seeing 700% growth by some metrics. how can you keep that kind of growth up? george: well, we are lucky to have a partner in google capital, and we have seen tremendous growth. we have got some world-class customers, and as you know, you cannot pick up a newspaper without seeing this and this is driving an overall environment, and when you couple that with the fact that the existing legacy technologies are just not capable of dealing with this advanced threat, it really isn't opportunity for crowd -- it really is an opportunity for crowdstrike. emily: late stage investment, technology not to compete with google.

>> from a google perspective, security is something that they take very seriously, foremost in our mind. and google does not disclose the in-house relationships, but, certainly, crowdstrike is very well known to google and to the environment, more broadly. max: a long-term maker of the products especially during the paypal years, one of the truisms is people would like to pay for it after the attack has successfully occurred on their network. how are you finding your sales process, your ability to convince people that this is something they finally be to pay attention to? and i ensure that the newspaper coverage helps. how are things changing on that side? emily: george, you take that. george: if you look at where security has been, it really is a board level discussion, and i

think that is one of the big drivers and changes that we have seen. the board is very concerned with their brand. their exposure and the cost of a data breach, and that is being driven top down into these companies, cell ago, we would really have to evangelize security, and now it is very topical, and board members are asking some tough questions in making sure their companies are focused on security. that has really been a big boost for us and the security industry, in general. emily: now, gene looking at surveymonkey and glass door how are you involving the strategy at google capital? what is the strategy? there was an early investment in uber and then there was self driving cars and ride sharing, and now they are sort of competing with each other. >> that is what google wants to see.

and the strategy to do that is to try to find sectors where google can bring expertise in the form of our people to really support companies to grow rapidly, and so in general, crowdstrike would be a good example of a kind of company we like to invest in that has a focus not so much in doing what google is doing per se, but fellow travelers in the technology space, and we are able to support this relative to the financial investment. emily: and our valuations good from your perspective? >> it is not terribly controversial to see -- say that valuations are relatively frothy. there are a number of companies we are excited to be with, so it is an interesting time. emily: so is crowdstrike the latest unicorn? what valuation are we talking about? gene has deferred to you

george. george: we are not specifically given -- giving out specific numbers, but i would say unicorn is a good way to describe it. emily: ok, what about your plans to go public? george: really what we are focused on his customer acquisition geographic expansion, building out our falcon platform and working with the security market where other technologies are falling down. emily: ok. approaching unicorn status. i will take that, george and from google capital, thank you both. still to come, max's creation of hit after hit. we will check out his latest creation, after the break. ♪

emily: it is time now for the daily byte, 2.1 billion dollars and that is the value of short sale positions tied to just $5 billion worth of games stocks, and that is 15 times the average for the s&p 500. a lot of investors think downloadable games will kill b game store culture, but here is the surprising part. gamestop is up, with some saying they have further to run. one possible reason is their trade-in program for used games. at another story that we are watching, comcast is the latest cable giant to unveil a package for cord cutters, called stream going for $15 a month, including

hbo. the offering, the largest pay-tv provider to take on web providers like hulu and netflix. and back to our special guest -- guest host, max levchin launching today, asymnmetrica, and when i saw this, i thought it was exactly what i need, but it a sickly makes it easier to read. max: yes, it improves reading comprehension. it introduces special spacing between words and letters on any webpage, creates these word bundles. emily: we actually have the way it looks here, the original, and then the way it looks. explain to me what is going on. max: after 40 years of research it shows that text, when clauses

are separated slightly better visually than when they are just typeset in a standard way, and comprehension can go up up to 40%, so you can be up to a 40% better reader, which i certainly can use. emily: and it works with any link? max: yes, it is a browser plug-in. i did not forget about trying crazy projects. this is one of those things. one of the guys, ken brownfield worked with me on thomas every product i started, so i am super excited. it is amazing. it is something that you add to your browser. it is a plug-in, and automatically changes the layout of every text page that you encounter on the web and makes it ever so slightly more readable. emily: very cool. you also have more news. you are getting into student loans, especially for those who

want to go to coding or --why take on this issue of student debt? max: it is super straightforward. we are building this company on the idea that the world needs honest financial products and services. banks have lost their credibility with the new generation of millenials, and they are looking for something better. to me, the best use credit for a person is to borrow money to invest in themselves, take themselves a more employable a higher earning, able person, so lending to students. the best for my money, or at least in my opinion, the kind of education today is if you can go and get yourself a 10-week program it takes you from a geography major, who is probably not very high verbal -- horrible, to a graphic designer

or something which typically quadruples your earnings capacity. it is a great way to participate in the economy. and the one thing stopping people from taking these classes is financial aid, and that is where we come in. emily: student debt is a problem. max: it certainly is. that is our specialty. we are a bunch of young and old. assessing risk. the old idea that we use for our point of sale products at the merchant checkouts and other kinds of data. we are still testing lots of new models, to see about repayment and we are confident we can take on the risk. emily: well, good to know. max levchin a former paypal cofounder, thank you so much for joining us. it is always great to have you. and that does it for this edition of "bloomberg west." we will see you tomorrow.

that does it for today from san francisco. ♪

mark: mark halperin. josh: josh green. with respect -- "witha all due respect" to scott walker he just might have trouble standing out in this big field. >> walker. >> walker. josh: on the show tonight -- first the pride of wisconsin scott walker. he is here in waukesha. the announcement event will start behind me pretty quickly. what does walker need to do in this kicko