>> larry page and a surrogate brennan started out wanting to out --surrogatergei started and came google glass, virtual reality, curing debt and now a radical we organization that is one nod to wall street and another to the future. on this special edition of bloomberg west we go in depth on the bet to change the world many times over. emily: i am emily chang and this is a special bloomberg west to delivering alphabet. coming up, what is possible?

look at new financial options. see alphabet make big-ticket acquisitions. how much is running on moon shots. is extending human life even possible? first let me tell you about alphabet. -- alphabetcompany is all that we once thought of as google it separated into units. there is fiber, the cable internet provider, calico the bio firm trying to cheat death. andures the investment firm alphabet, home of the moon shots. the core moneymaking business still lives as google. some are calling it classic google. and it is include search and ads and youtube. by pichai.eing led

chai launched chrome who took over android operations and recently almost all of consumer android products. joining me to discuss how we can accomplish big things is brad stone, and ben leg. what is possible? what can they do now that they could not do before? >> arguably nothing. >> ever since larry was appointed ceo of couple of years ago, he has shown a little bit face for the grittier responsibilities of being chief executive, talking to shareholders, being on the quarterly conference call, talking to regulators and testifying before congress that is why gradually we has handoff -- we have seen him hand off more responsibility to send our pitch i -- sundar pichai. what this allows him to do, and

that sergei has already been doing, is to look at the next twist in technology and let him handle all the stuff he hasn't wanted to deal with. emily: it is not an easy job he is taking on. om: i do feel that classic goodwill is under attack for the -- classic google is under attack for the first time in a very systematic way from all corners. i do not think people seem to quite understand how deep the attack is from facebook, from apple, from other internet services. google is a company that does not do anything very well. it is a fact. emily: google is a company that doesn't do anything really well? >> search, they won the business and they won the categories. look at search results and look at search performance. look at how we as human beings use google search, we have nothing exciting to say anything about it. we do not love it the way that we used to when this company started.

emily: as someone -- how do you respond to that statement, that google does not do a single thing well? >> i think there are elements of truth to that. but if vertical by vertical, other companies are picking up interesting bits of search. hotel search might be booking.com, flight search might be kayak. product search could be amazon. there is a risk that google gets chipped away at by lots of specialists that do a better job than them. they have been to a lot of things quite well and there are many people that may be not as hungry as they might've been. the company was maisie -- maybe too big and bureaucratic. emily: there is the why. but what about why now? what does this have to do with regulation and what is going on in europe and the antitrust battles they are and needing to be more nimble and make it in a place like china?

brad: in business week, larry and sergei want nothing to do with the antitrust battles. eric schmidt has been running that game plan. it hasn't been successful, no no fault of eric. but the political climate in europe is terrible. sundar is known as the peacemaker. it came in with android when android was fighting under a lot of divisions and has integrated it. i think he will soon try to navigate google through what is a serious situation in europe. emily: the new cfo, does she have anything to do with this? how much of this is pressure from wall street? om: i think they acknowledged it in an fcc letter. they had to defend themselves and google executives did not really care about wall street for the longest time.

they had to file a letter and there they defended themselves against what these companies were saying, why they were not focusing. i think investors were asking where the focus was. i think investors were wrong for making them focus on the near term. a lot of companies suffer because they are forced to focus on the near term i wall street, which has a very industrial era understanding of business. emily: and now they are saying, we will not accept the new google. thank you both so much for joining us today. another developing story we have to mention, china is surprising global investors by devaluing its currency the most in two decades. the yuan cut could be welcome to apple suppliers, foxconn and pegatron. a devalue might boost gross margins for both companies even in the face of slowing iphone sales in china.

up next, could alphabet go on a buying spree? plus, should amazon or facebook take a page out of alphabet playbook? are they already? ♪

emily: welcome back to our "bloomberg west" special on alphabet, google's new parent company. how will larry and sergei run a company? >> it is conceivable google could make large acquisitions if they decide to. and not only directly related to what google does today, but why not an entire new areas? not only moonshot investments but -- there is nothing stopping google with this option they've created by combining operations focused businesses if they wanted to. emily: for more, i am joined by pivotal research group senior research analyst bryan weiser in portland. ick.brad stone and om mal alphabet now has $70 billion on its balance sheet to spend.

how would they spend it? you've had some suggestions. om: i would say there was talk about google and tesla in the past. there was a book about it. he pointed out that there was some talk of google buying tesla and it may actually make a lot of sense for google to actually take a substantial position in tesla, not entirely by outright, outrighttirely buy it , but let's say the google owns 20% of that company. it removes pressure on wall street, on the company to deliver short-term results. i think the transition we are going through and technology needs some long-term thinking. tesla is not something that can be judged on a three-month increment. from that standpoint, that would make a lot of sense.

emily: is "t" for tesla or for twitter? i spoke to someone a few months about this very thing. he suggested twitter would be a good fit for google. they have not done social well at all, we can agree. but as don't know twitter's stock has declined it becomes more possible that they could buy them. emily: brian, you cover twitter. what do you think? how would you like to see google spend this money? brian: the question is what is the optimal capital allocation. it is safe to say that if you were to look at it solely on the basis, you would separate it from those businesses that are directly ancillary. maybe like google play, from the rest of it. while you might admire what they are trying to do, but allowing -- from a capital efficiency perspective, -- allowing

investors to identify their capital in synergistic businesses -- that is not what google is. that is what they are not going to do. they want investors to invest knowing they are investing in a larry and sergei company. emily: you were about to talk about spotify. om: i think if you read larry's note, and i'm just going off that, right toward the end he talks extensively of vetting entrepreneurs and founders with a long-term view. he is as clear as day telling the world what he wants to do with the money they have. the kind of investments they want to make. spotify will need daniel x. -- daniel leg. leit will not happen without him. emily: i wonder if there is a situation where daniel can come in and be ceo, or jack dorsey for example.

om: i think this will be a large technology company figuring out how to expand opportunities for it. i've said time and time again, google is still a one trick on -- pony. they are trying to find the next horses. they cannot buy talent like facebook bought oculus and retain it. that is the problem. in this case they can buy talent , let them be and let them go. emily: brad, if you are mark zuckerberg or jeff bezos, what are you thinking right now? brad: maybe they are excited about this. larry is elevating himself above the core business, bringing potentially other companies into the alphabet umbrella, and arguably taking their eye off the ball that is the profit business, the search engine.

we have not spoken about sundar, an a couple executive but no match for jeff bezos or zuckerberg. maybe this is an opportunity where larry really starts to look at other things and disassociates himself and we look back and say, here is where google started to lose itself. emily: brian, do you have a comment? brian: there are several. on the fact that google is a one trick pony, they will probably do $10 billion this year. with google display network. if you look at the successful entities related to double-click, it is massive. mobile?hat about haven't they conceded a huge portion of territory there to facebook? brian: on purely mobile plays, was onerchase of ad mob of the most successful acquisitions in that space. it's not about a mobile

advertiser to a mobile device per se. google along with facebook are the two hegemonic players in advertising. om: i will respond to that. google and facebook, if you want to measure them on any metric, it has to be on the attention graph. the attention of the average consumer is increasingly on facebook. today it seems great and dandy, but looking forward, if more people are spending more time in facebook, or in the so-called communication apps, then you start to see that people are starting to shift their time on twitter to different platforms. it takes away from their core business of advertising. i say one trick pony. they do advertising and there is no match up for them just yet. on mobile, facebook is ahead of them.

they will continue to increase the lead because they have more personal data on that. emily: you pointed out that u.s. adults still spent 20 minutes a day on facebook. brian, you're sticking with me. thank you for joining us today on this echelon edition of bloomberg west -- special addition of bloomberg west. still ahead, moonshot on the newly formed alphabet. ♪

emily: it is time for the daily bite, one number who tells a lot. today's numbers 57%, that is the decline analysts expect to see in alibaba's quarterly revenue. they will announce numbers overnight tonight. yesterday, they announced a $4 billion buy in a chinese

commerce group. suning commerce group. yesterday they announced 692 billion dollars in time retail. tomorrow, be sure to check out my interview with alibaba's ceo dano john right here on -- daniel jong. now back to our special show about alphabet, the holding company for google. while search may keep the lights on moonshot is the heart and soul of this company giving birth to some of her more famous projects like google car and grass. -- glass. i spoke to the founder and asked him about calico. >> it is another audacious move by google. i have to say this is what i admire google for. there is very little research

done compared to curing cancer. it is a perfectly good proposition. let's give it a try. if google succeeds in finding a dying, ir old age would say that is fantastic for the world. emily: joining me to discuss, ryan betancourt, and back with me is all malik, brian wiser, and brad stone. sebastian said he thinks we will see the impact of the research in our lifetime. is it really possible to extend life to 200 years? ryan: without a doubt. when you look at extension of life, cynthia, one of the new hires at calico, actually showed she was able to double the life span of worms with one gene mutation. emily: how are they doing this? calico is the most opaque version of google. no one knows what is going on. brad: we are all rooting for them. ryan: we are all rooting for

them. they're not necessarily outside the biotech space, but incredibly famous within it. -- famous outside the biotech space, but incredibly famous within it. cynthia is one. people know him from apple, but he was the ceo of genentech. google in the past have said that they are looking at the long view. we think we can start to see quantification and success within the short term. brad: it seems trivial to a -- to be talking about corporate structures when we are talking about a company trying to extend human life. but what do you think the benefits are of calico, or even running it out as its own entity? ryan: it is allowing it to focus. one of the big issues in this life sciences space is allowing it to follow certain past that a -- certain path that a search

engine would not follow. another thing is biotech is , expensive, especially when you are talking about therapeutics. let's say, they identify couple of genes that may actually extend lifespan, delay the onset of alzheimer's, parkinson's disease. those are drugs that would have to get developed and we are talking about multiple billions of dollars. brad: you'd would have to raise money on the public markets. ryan: on the public markets or do structures that search engines wouldn't do like joint partnerships with pharmaceutical companies. emily: do you wonder how they do all this? om: i don't, actually. i don't think we can quantify what google is doing with the moon shots in financial terms. if you think about it, look at bell labs that invented the transistor and look at the impact on the entire society. is there a way to quantify ? i think the at&t of the past is already gone. when you take the long view, you cannot worry about what the

earnings will be a year from now. adove google for turning dollars into something useful for humanity. emily: we also have google ventures. bill meredith is running the financial arm of the company. life science investments. take a listen. bill: we start with a theme and with 36% of our capital last year into life science companies. the goal is to help people not suffer from diseases or die from congestive heart failure, cancer or the things that affect lifespan. emily: can you give me a better idea of how they are extending life? ryan: how is looking at disease itself. what is aging? it is gradually the onset of diseases that eventually kill us. alzheimer's, cancer, cardiovascular disease. once we have cured these, we should start to prolong.

it is about 120 years currently for the normal human lifespan. if we look at other areas where google is involved, organogenesis, failing organs where they can be replaced. emily: you have been inside google x. what about the other moon shots? how successful have they been? brad: it is a mixed record. google glass was probably the one that got the most attention and it wasn't very successful. that moved over to the nest unit. ,he internet connected balloons they are trialing that, but there are other options to spread internet options in other parts of the world most of they are dealing with high wind at high altitude, so we will see whether that is practical. everything else is kind of miscellaneous. certainly promising. to the extent that it frees up more capital for google x, that is a good thing. we all want these things.

emily: in the next earnings report, we will see more transparency. they don't know just how transparent it will be stopped -- it will be. what do you think it will look like an alphabet, google aside? om: five year from now, not too different. i think it is a company very much like berkshire hathaway. not, perhaps, the same makeup, but looking at big swings on the future of humanity or technology, not everything will work out. but they will have more companies under there. i definitely believe there is suddenly a revitalization of interest in google and what it can do in our ecosystem. emily: om malik, brad stone, ryan bethencour, and brian wieser, thank you all so much. that does it for "bloomberg west." ♪ >> imagine wiping away the

appearance of crepey skin. on your arms. >> on your legs. >> and even your neck. >> what would your reaction be? >> can i look now? >> yes. >> are you serious? oh, my goodness. announcer 1: and now, a paid presentation for crepe erase. announcer 2: a breakthrough targeted body treatment, brought to you by guthy renker.