emily: markets in china slide to historic lows, but a chinese these the fund has $5 million to invest in global tech companies. ♪ i am emily chang, and this is "bloomberg west." coming up, why square decided to go public now. bucking the trend of tech unicorns staying private. plus, the largest technology companies pledging to cut their carbon footprints in a big way. and leaving the 1099 economy.

turning independent contractors into full-time employees. we have the ceo ahead on "bloomberg west." earnings have just come out. this is a chinese search engine giant out with second-order results, and i want to get julie hyman, our senior market correspondent. taking a look at the headlines. obviously there is a big focus on margins and a picnic to mobile. what are you seeing? julie: first of all, the headline margin for adjusting earnings -- adjusted earnings is seven cents short of what analysts had been anticipating. revenue rose about 38%, coming in right in line with what had been anticipating, and it looks like the company is coming out with a forecast for third-quarter sales but that is below what analysts were anticipating. seeing an initial decline. you mentioned what is going on with mobile. the company says its mobile search monthly active users 629 , million for the month of june itself, an increase of 24%

year-over-year. monthly active users up 48%, so i am still looking at the exact margins that you are talking about, but those are some of the numbers. also in terms of active online marketing come to raise -- customers, it says 590,000. we are looking at low for numbers in the investment of a group coupon site, similar to groupon in the united states. traffic acquisition costs, 12.7% of total revenues. that is unchanged from the same period a year earlier, so i am going to continue to look through these numbers, emily but thus far it looks like we saw that big miss in earnings per share as well as the forecast for third-quarter sales. shares not doing well in reaction to the numbers.

emily: thank you, we will check back with you as more headlines continue to cross in. i want to bring in a general partner at softbank capital who , focuses on mobile, and with us from stanford, jeff richards, a managing partner. let me start with you, jeff, because baidu has not seen as much of a selloff as some other chinese tech companies have, because consumer demand in china is strong. but what are you seeing as a big significant macro trends that baidu has to deal with with giants like alibaba and tencent? jeff: the biggest one was what you and your team highlighted earlier, which is the shift to mobile, which has very different dynamics and monetization around search works. that has been going on atbaidu for a while. and the second thing that baidu is doing is moving services, soap on-demand services, letting consumers buy things by search or a -- so on demand services, letting consumers buy things by search. and we saw their investment in

uber, and they are executing quite well in china, so those probably the two big shifts with baidu. emily: meantime, alibaba and 10 sent are backing the competitor. baidu is also looking to i know ps mapping business. --buy nokia's mapping business. what do you see as sort of the big picture challenges? >> as you know, we are mark -- not markets, we are eventually venture capitalists. we invest in the early stages of a company's life. that being said, we think less than half of china of us is population is on the internet. it is a massive opportunity, and quarter to quarter, there were

expectations, but on a long-term basis, i think they have a tremendous opportunity ahead of them. emily: in terms of margins, operating profit down to and a half percent from a year ago. we'll continue to look at those headlines. but i want to talk about another story we are watching in china and that is gsr ventures launching a $5 billion fund to buy gold -- global tech internet and biotech companies. this is not the first time considering cross-border deals, like philips lighting, $2.8 billion. today's announcement comes as chinese markets are hit by the steepest decline in eight years. the shanghai composite tumbling eight and a half percent at the close. why is this investment giant looking to tech the on chinese borders? jeff, i want to start with you again on this. what do you make, what is the significance of gsr hitting $5

billion to invest in global tech? jeffl: i can't comment on their specific strategies, but i will say it is interesting that beast -- despite the volatility in china, it is still arguably be most attractive long-term opportunity in the world by far. what you see is an influx of capital, a lot of interest in the world investing in china raising new funds for that opportunity. and the second thing as part of the headline here is, there have been a speed of companies in china -- a spate of companies that are making offers to go private. many times, those are led by the ceo, in conjunction with a large investor in china. so while i cannot strategy, this trend is probably playing a part in the thinking of that new capital-formation activity at gsr. emily: i want to bring in sean.

of china market research. you have such a good gauge from within china on what the intentions of big investments like this are. what does it mean for vc's here in the united states? >> it's great to be here. i think the first thing, chinese entrepreneurs and investors are quite bullish, so it is the $5 billion, and getting a lot of technology to either bring it back to china or be able to create an opening for chinese companies to move into the market for little bit more. so i just wanted to pop in. one of the other guest said that uber is doing well in china. i actually disagree. there are only doing well because they are spending more money on paying off the drivers and commissions than what the actual cost of the ride is. uber is going to face some difficulties, but overall, i agree, the tech scene is good in china and it will continue going forward with these week $5 billion funds. emily: interesting. you are seeing companies like

uber, and with this gsr capital, we are also seeing companies like baidu and alibaba. trying to go global. josh, what do you make of the broader strategy, and more competition for u.s. investors? josh: a lot has been recently read about now being the time to raise capital. potentially the best time ever in the history of startups. i think the same thing can be said for investors in startups. i think that is part of what you are seeing. i do not know the particulars of gsr, and i also cannot speak to their strategy, but it is a phenomenal time to raise capital. as a venture investor. the flipside of that is that it is maybe the worst time to be an investor. it is more competitive than ever before. prices are very high. so that is the rub. emily: thank you, and joining us

from china, hence, that shot thank you all for joining us. collaborating on climate issues, 13 u.s. blue-chip companies apple, google, microsoft among them investing billions to reduce their own carbon foot print. this is before the climate change summit in paris, and apple and google alleged to increase renewable energy investment, while aluminum giant alcoa will eliminate half of greenhouse gas emissions within 10 years compared to 2005 levels. general motors, coca-cola, all taking part. coming up, jack dorsey's square is filing to go public. but that is not the norm for tech startups. so why now? we take a look at the tech helping deaf children to hear. ♪

emily: we know now that jack dorsey's square is planning to go public after we broke the news of its confidential ipo filing on friday, but why? in a market where companies are seeking private finances, why are they bucking the trend? joining me is leslie picker, and

as special guest. curious about your reaction to the filing. it seems sooner than some people were expect. what do you make of the filing to go public now? ? i think there are three reasons why companies want to go public. one is that they can actually raised capital in much more attractive terms. the second is they have public currency to potentially make acquisitions. today, what is happening on square is it used to be known as eerily a payments company, it is moving towards other areas about software, things around payroll , and things about being operating systems for small businesses. this gives them the currency to accelerate growth. the third area is from a branding perspective. when we talk about branding square is a very well-known brand in the united states. presence in canada and small presence in japan. as they continue to think about progression a brand is a

company to have. what better way than to have a public listing on the new york stock exchange? that gives confidence gets to a brand. a brand is incredibly important for went to had in financial services. brand is something that is built over a long time. i think going public gives users the opportunity to do that. emily: brand is important. but it is curious, leslie, a lot of the talk after we broke the news is that the timing seemed odd? he is the interim ceo of twitter. the obvious candidate to be ceo. why now, when there is this complication? leslie: jack dorsey aside, you are seeing those companies who are going public, are the ones who have not been able to get private financing, or have not needed it. there is one tech company in particular, 18 months before its

ipo was turned down for that private financing, because investors are concerned about their competitive environment. so square could be an example of one of those companies. not entirely sure if it is even gone out to private market. but as you mentioned, it is interesting with the timing given that jack has returned to twitter. it seems like based on conversations with sources, he is committed to remain at square. that puts additional pressure on what he's going to do about twitter. emily: far fewer tech companies are going public this year as compared to last year. i wonder it you worked with jack dorsey. does it change if he is not ceo of square? how well is square doing? what you make of some of the things leslie just brought up? >> i think the company is doing fine. they have an incredibly strong management team. they have the head of business, incredibly strong.

the head of engineering is strong. one of the things people fail to understand is it is one of the few women lead executive teams in the valley, and that is a great story. outside of jack, it is an incredibly strong team and one that continues to execute, and they will continue to execute, i have no doubt. emily: thank you. of general catalyst here in leslie picker, our bloomberg news reported. ok, we are all watching see how this one unfolds and who ends up leading twitter as well as square. it is time now for our latest "bloomberg west" series, a closer look at the technology driving forward the frontiers of medical science. today we meet a little girl learning how to here, thanks to a brainstem implant that the fda has just approved. take a look. ♪

emily: it took five and a half years before she heard her first sound. hearing aids, ear implants, and finally an experimental brain surgery. but now with 21 tiny electrodes by passing her ear and auditory nerves ava is starting to recognize sounds and even make a few herself. for hospitals in the u.s. had eight approval to perform auditory brainstem implants on children under the age of 12. the operation is tricky. >> we make a small opening, back behind the ear, and there is a little area where the spinal fluid goes from inside the spinal cord outside. it is a natural opening. fortuitously, the nucleus lies along one side of that. we place a paddle with 21 contacts adjacent to that

cochlear nucleus. emily: that the operating room, a team of doctors have to make sure the tiny paddle is placed in exactly the right spot. >> the area we are putting the implant is is very neurologically congested. a lot of nerves in close proximity. you don't want to stimulate a nerve that should not be stimulated. emily: they are manufactured by cochlear. nyu doctors estimate the first year of treatment could cost about $150,000. the goal? to activate as many as possible. >> the first time she actually heard our voices, she turned and looked at my husband and was in total shock. and then when we got home, and she heard the dog bark, she stepped back and looked at the dog. it was the greatest response. emily: right now, this is a last resort technology, something to try after most traditional

options have failed. until now the devices have been used for adults with lost the ability to hereafter they had brain tumors removed. it is still in the trial phase for children. it is not clear how effective it will be in the long run. >> you cannot say, does this sound like high or low pitch, especially not a child. emily: but for the patients and their families, even a little progress is a lot to cheer about. such a great story there, and you can watch the rest of the bioengineering series every day on "bloomberg west" this week. you do not want to miss it. lots of fascinating stuff going on. still ahead, the fate of the freelance economy, and why one startup is turning its contractors into employees. ♪

emily: now we turn to our daily byte, 950 million, the number of android phones that may be at risk for a major text message had. they discovered a major hole in the system that would allow hackers to take control via a simple text message. since 80% of smartphones run on android, it is one of the worst flaws ever uncovered. google has sent out patches to fix the trouble and set manufacturing partners will continue to push out fixes over the coming week. now, to a sea change in the freelance economy. shyp, the online shipping company, making a name for itself as a low-cost alternative to fedex and making waves. it is converting its couriers from independent contractors to w-2 employees, a move that makes them one of the few on-demand companies to boost a work horse

-- workforce made up entirely of employees. and turning contractors to employees, and will more on-demand companies join shyp in doing this? joining me, the ceo. great to have you. i am a big shyp customer, so i am familiar with your service, but what you guys do is charge a five dollar fee to send a courier to your house and they will pack it up. including postage, send it off. give us the big idea. how many couriers do you have how many people are signing up how much money are you making? kevin: we are in four states. we are getting ready to launch chicago. it is interesting for us. this is something we have done from day one. we have had this w-2 classification inside of our warehouse. the service works, it's an app.

you take a picture. we send a courier and then we take it to the warehouse. we have had this classification . this is a transition for the couriers. the people coming to your home and taking it to the warehouse. emily: shipments are up 600%. growth is also up. what was the lightbulb moments when you said, we need to make these contractors employees? kevin: this has been something that has been with me since we started the company. and made the choice to go -- go with contractors because we thought it was just taking an item from a to b, and we turned that it was more, some buddy showing up at your door and taking something worth thousands of dollars -- somebody showing up at your door and taking something worth thousands of dollars. so we felt like the death of service would be much better suited to make the transition. emily: you say workers need to

be trained. should not uber and lyft want their workers trained too? kevin: i think so. but i think with them, not as much. you are taking a person from a to b. in our industry, couriers have been contractors for decades. for us, we thought that we needed so much more, with training, making the switch was better. emily: so why take on it at the cost of your peers think they can avoid? kevin: i think we will be able to make it up in operational efficiencies. that we are able to gain. for us, being contractors, we really cannot take it what item we pick up. the actual courier will get pinged, and it is up to them to accept or reject it, and we have to be able to cover the entire city, so a few objections really

-- rejection throws the entire system out of whack. so an employee based model will be better. emily: do you think it is something uber and lyft should do? kevin: i think it is a reasonable thing that a company has to decide on. emily: take a listen to what he had to say. >> i did not invest in shyp because i think it is something that uber can and will do. i think travis has lots of ambition, but his ability to execute on that is completely unlimited. emily: is he wrong? kevin: i think so. emily: is uber going to do what you do? kevin: i don't think so. what we do is difficult. and there are other things to worry about. the city is very difficult. emily: thanks so much. great to have you on the show,

and that is it today from san francisco. ♪

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