"bloombergme to advantage prime time." you a we are bringing special hour a bloomberg programming credit we will be dividing into a wide-ranging conversation. we will talk about exchanges in trading with ed knight of the nasdaq. then we will look to the current media scape, and we will round it out with technology and companies you should be invested in. we will talk to an all-star analyst. ed knight is the executive vice president and general counsel of nasdaq. good to see you here.

what are the big issues you thought you would be dealing with when you took this job? issues are the integrity of the market. right now the sun does not set on the nasdaq because we operate in markets around the world trade when i came it was one market. at waysy where looking to protect investors. that is job number one. dark for a couple of hours, go back to 2013. what about the reliability of exchanges. is it tougher with more technology involved, with a lot of volatility and uncertainty in this market? market is more fragmented than ever before. fragmentation creates issues with technology. deliver a high level of reliability at nasdaq. backupk we have the systems to deliver what the

investor needs on a daily basis. carol: that does not mean things will not trip up from time to time. ed: no. as one professor at m.i.t. said,ied to the scc and all software has flaws in it. we have to be in a position to deal with that seamlessly so the public does not get hurt in any way and that is something we focus on every day. one of the reasons for that arms race to make it better and better isn't just the rising volumes, but the changes that happened in the markets. i wonder as it relates to , what can anues pressure does that exert onto the nasdaq in terms of technology and legal structure? ed: we have to be connected with everyone and we do a very good job at that and managing it. rules require best execution for investors.

the market is wired to do that in a seamless way. i think it's amazing how often and well it does work, the few issues we do have. when the financial crisis hit, the cash equity markets never stopped operating. cory: we had those moments with trading sprung up to deal with the fact of the crisis back in the 1980's and so on, where people would not pick up the phones. ed: if people could see the effort put in by the whole industry to make it work, there's no doubt it could make better. the markets are like a living organism, constantly changing and evolving. carol: is it tough for the

regulatory environment, for regulators to keep up with and interesting trading ways among the professionals? ed: it's hard for investors to stay current on technology. let me give you one example. devotedover 900 servers to trading nasdaq securities on nasdaq. 100 of those 900 are just devoted to surveillance of the market and the regulation of the market and that is just our market. ofre's a tremendous amount information generated, a lot of complexity. that complexity is resolved often through hard wiring of technology. the fragmentation of the market raises the possibility that some link will break. the scc has to stay current with that. carol: it is just going to get

more and more complicated? ed: i think the scc is looking at it. in our those venues properly regulated? -- and are those venues properly regulated? a lot of market participants are asking themselves the question, do we want to be in this business? can we accept the legal and technological risk associated with the running a trading venue? realizee, people will that the exchanges -- and i believe nasdaq -- it adds the most value, this is what we do the best. this is what we can do most efficiently, we invented the electronic trading of securities we continued to evolve that model, we sell it to another 70 stock exchanges

around the world. this is our sweet spot and i think over time, more and more of that will be realized. suddenly a lot of attention after michael lewis's great book helped explain it. bother the things that people about high-frequency trading, the notion that high-frequency traders are getting information from the exchanges, essentially able to get ahead of other traders, to plumb the depths of the markets through technology or information given to them through the exchanges. do you think the pressure has ended to get you guys to change some of your rules? ed: we are obligated by statute to provide access on equal and fair basis. every policy and practice we have has to be submitted to the scc for approval. cc can't keep up on

technology. it's hard for regulators to keep up on new technology. when we provide that technology we cannot install it until the scc considers. thereose smart people out are commenting. we go so far in our data center is to make sure that your server in the back of the room is not this advantage by the server in the front of the room. we have courts that equalize everything. we think it is done on a fair and equal basis. recently challenges that were an outgrowth of that against all the stock exchanges were thrown out, two of them. and the federal court in new york. the other thing, speed has always been a part of these markets. going to say, speed

today is different than what it was. cory: the speed of the race track is not what it was. ed: the rothschild had faster horses and they had an advantage. the sec is there. a year 400 rule filings that we cannot put into place until they approve it. it is done through notice and comment. i was perhaps painting it with too wide a brush. abusesion that these happen in the dark pools of frequency trading seems to me you are charging people with gambling, except the exchanges are running the casino. i wonder if we might need to slow down trading. that has to be led by the exchanges. ed: imagine you did put a speed bump in. it is still a race to the speed bump.

this form ofuce competition, in my view. you can regulate it, which we do. high-frequency traders are broker-dealers. there examined by us. we spent a lot of money on buying a company called smarts that provides technology to us and to another 100 stock exchanges around the world and 50 governments just to surveillance markets. we have collected fines against them. they are policed and we watch them very carefully. special't get any breaks on our market but speed is a factor and they provide liquidity. that is something that we have to constantly watch and make sure they are a positive part of the market. at some point if they are not for the rules need to be tightened, the sec is there. i can tell you they are looking very hard at it and we are working with them on that. all that you feel

speed and efficiency makes a transparent and fair market for individual investors? ed: i have no doubt about it here and we are on the job. the sec is on the job. sandra -- they are on the job. the railroad on track and they are racing to pick it up and that is their business model. a lot of people would get hit by the train. some of them are successful at it, some of them art. when the markets are not as volatile, high-frequency traders do not make as much money. many of them when they markets were not as volatile as they are now get out of the business. they are putting capital at risk. if they happen inside edge, if they are trading unfairly, if they are manipulating the market, we have tools to find them, and we have. the massive volatility we

andfour weeks ago now, there was an inability to even get quotes on certain s&p 500 names which led to this air pocket in the markets where there were no quotes in the exchanges so you cannot get an accurate price on the futures, all of a sudden the bottom just dropped out or you talk about providing liquidity but that liquidity was not there this morning because of mis-function in the markets. ed: uncertainty creates volatility in the markets. a pocket ofs misinformation or lack of information it is hard to force people to create liquidity. that being said, nasdaq open right on time on all the stocks listed with us and provided opening prices and liquidity. if they dropped too much the limit up, limit down system got the flash crash, you did not have those

circumstances because we have new rules in place that prevent stocks from dropping to dramatically and imposes a pause, and reopen in that stocks. that system worked well on that day. at the new york stock exchange they did not open. the limit up, limit down system was not fully in play and i created more uncertainty. -- that created more uncertainty. we just wrapped up the third quarter, it was a tough line. how did the third quarter do for you guys? what did it look like into the fourth quarter considering market volatility we've had? year, 2015d to last is not as strong. 9e had our best in 2014 with 18 new listings on nasdaq. 74% of ipos this year -- ipo's this year have been on the nasdaq. the volatility in the market now does tend to cause people to wait that we had three ipo's

today on the nasdaq. carol: were they already in the works? they make the decision is whether they want to go or not. comparing against a historically high year, 2015 is not been as strong in terms of ipo's but it's been a good year compared to the previous years. forward a yeare look from now, would you expect listings to be higher or lower? ed: we are vouching for these companies. investors we hope put confidence in nasdaq's name. they think they can get a good trade. we are looking at these companies before they list in deciding whether they meet our standards. even if they meet the numerical standards we have the authority not to list them. carol: how many do you reject? ed: quite a few. carol: how many is a few? 25%? ed: a lot of that is in the

record. when people are denied they have to disclose that. they know from looking at our standards whether or not they will meet them because many of subjected.t our subjective standard we can if we not list a company feel like they could harm investors, we use occasionally. but is not that frequently, fortunately. to have accurate disclosures and they are subject to sec examination about those. we're going to get accurate disclosures, but when we have a suspicion that all is not right, we won't list them. cory: you expect listing standards to get tougher, or you think you might loosen them? ed: you need to look at the broader market. public and private market here. it's difficult being a public company today. there are not only our rules, the rules of proxy advisory firms that advise large

institutional shareholders, and a lot of companies are postponing going public or not going public at all. they do not want to be subject to that sort of scrutiny. degrees, subject to a short-term focus at some investors. there's been a lot of money out there. private market is robust and her's capital there and they will continue to take advantage of that. we have the nasdaq private market in san francisco, which helps companies that are private maintain their shareholder registry. seeingindeed but we are in san francisco, so many private companies were people work there for a while that want to find a way to cash out. you guys see it -- ed: the congress and president of the united states created

this market in many respects with the jobs act and made it a much more vibrant market and gave entrepreneurs more choices. they could stay private longer to develop their products. they did not have to go public with 200 shareholders when they exceeded that. we saw that, we felt we could bring our technology and regulatory standards to that market investors and help create more liquidity. cory: on some level lowe's companies are choosing not to go public on the nasdaq, some of them, and some of those big listings you might have gotten in the past and might get revenue from, you are not going to see. this is a way for you to grow when the other business is not growing. ed: we want to work with these companies and get to know them. we like to think part of our dna is the same entrepreneurial spirit you see in austin in boston. this is a way for us to get to know and serve these companies at an early stage. they may choose to go public,

they may not. any direction they go, we think we can help. carol: i'm curious about the technologies you guys are watching very closely, whether it is bitcoin -- what is it that will impact trading in the future? ed: we have announced -- we believe that block chain technology is well-suited to some of the challenges facing the securities markets. the dispersed ledger nature of that market is ideally suited to keeping the records that you have to keep when you own securities. strong encryption and other --tections for individuals developing products to keep records. the nasdaq private market will be rolling out -- carol: by the end of the year? ed: we are looking at other applications of that. in 1971 when people felt trading electronically was not the best

or action to go, we were pioneers. we proved that it works. we want to continue to be pioneers. cory: thank you very much. ed: thank you for having me. cory: general counsel at the nasdaq. carol: let's take a look at how u.s. markets closed for the first day of the fourth quarter. south korea seeing a steep drop in after -- afternoon trading. of 1%.losing up 2/10 the dow finished lower, just under 1/10 of 1%. very cautiousmany before tomorrow plus jobs report which is expected to show the u.s. economy added 200,000 jobs for the month of september. that will be the focal point on friday. us, jim robinson, managing partner at rre ventures.

i want to talk to you about a story that broke today with they are saying t-mobile applications -- some 15 million people who applied to t-mobile and those applications went through experience -- experian got hacked and their data compromised. in your role as an investor when you're looking at issues like security, do these individual attacks help you decide where to put your venture dollar investments? jim: they can. in general there are two or three counts the tax that we watch and people start companies around. i have so many stories. it's hard to figure out what the new one means and what bucket to put it in. we live in a world where we have what i call a fraud prevention cottage industry.

we're always try to figure out where the last hole was, plug the hole, and they find a way around that so we have to build new product to do that. a lot of the product you see is threatened to traction -- detection products. it looks for anomalies and it will report those. it comes up at some point not just to a machine environment but a human being. is of the things i believe that this is unscalable. we need a new and a dime in how we think about security. cory: the moat is not as good as it was in the middle ages. jim: you need a moat and about 100 miles of score strength outside the moat. carol: how do you scale that quickly? how do we do this, and quickly?

we are seeing all these holes pop up all the time. jim: if you think about the root -- there are ae couple of things that are typically true. one, it's generally not that encrypted. if you can get the data, can you do anything with it? there's another thing, we have centralized stores of infor mation. you hacked that one database and you get the data -- if i have the keys and i can get in, i have the data. the other is a centralized structure where your personal financial information actually isn't resident in any one place. it may be spread out in many places around the country, the globe. it has to be recombined to do a transaction.

the pieces are everywhere. are you already seeing companies that are going to kind of fulfillment we need in terms of security? are looking at companies and investing in some that do that piece of it. the issue is you are wrestling with the very nature of institutions primarily who are used in knowing where all their data is, it's all behind the wall, we keep it over here. that becomes the vector for attack. decentralized apology is complicated if you are that enterprise. you don't want to manage that. it's got to be a software's and service. then it's outside the firewall, so who has liability? there are a lot of pieces of this puzzle we have to solve, including legal. cory: it seems like there are

correlations -- these are defense stories. every time you solve for one problem, the hackers are finding a way around that and then you doe to keep doing that great you imagine -- 15, 10 years ago there was symantec and mcafee doing a lot of this straight no longer are they one or two companies managing all things infrastructure and cyber security wise. do you imagine we are bringing it back to that, or will there always be different kinds of patchwork solutions? are goingything, we the other way, seeing increasing fragmentation. there are product and service companies trying to do it all. a lot of their service revenue -- a lot of the defense companies do this behind the scenes too. it's not just the brand names you know as a computer.

it's a bit of a game of waccamaw -- whack-a-mole. every time some of the comes up with a novel way to crack the safe, you will be developing an awful lot of software. you will always be patching yesterday's break-in. get of these things don't -- they often don't get discovered in real-time. cory: it work with so many different kinds of companies. you cancel your companies, when you get hacked, you have to tell everyone about it because that is best corporate practices. so many companies follow the worst practice, which is don't tell everyone we have been hacked. other companies have been getting hacked. the one piece of information you have could help solve the problem for everyone, that is the best practice. jim: it's not quite that simple.

there is discovery and then there is the we have to confirm that, how big is big. what if it was over here as well? there's an assessment period that has to happen. delay, theu time less good information you have from a crowd source model that can roll up into one tapestry and help to prevent it somewhere else. carol: will there be a day that we really have to secure information or will be hackers always be one step ahead? jim: it's a great point. we had better come to that day. in the not-too-distant future all of our medical files, all our personal information, -- that'sinformation all going to be out there. we had better come up with some combination of things, no one thing will do it.

i think a combination of decentralized storage to where you literally have to are wrecked a very complex puzzle every time you want to put something back -- authentication mechanism based in part on a biometric use. it can't just be that, it has to have some other vector providing additional security. if it is your money in the future, it may be multiple parties. au can spend it but you have partner, this is not so trusted central authority but a decentralized authority. it all happens in real-time. [indiscernible] carol: but how far away are we from this? are here andf it pieces of it are coming. but it's not there yet. when people talk to you about things like the block chain, bitcoin, a lot of the time that is just a public ledger.

int is great about it -- many ways it is a slow database in and of itself -- it's not just that it's public. is how information gets written to it in the first place. details are there and you can have a bunch of site databases that hold a lot of that data. it still has to be constructed somewhere. carol: our viewers and listeners are thinking, what are the companies you are seeing that will be involved in creating the system for us going forward? different's a lot of ones. within the block chain technology world there are many. it is different companies specifically trying to build product. carol: ok. that, some ofhan those and others are looking at health care solutions for data reference. that has its own series of problems with it and you have a different hacker the may be looking for references like that.

it comes down to where is your data stored in who has access, and how easy is it to get. if i can get into your database, no matter how many dollars you paid whatever from to protect, if i can get past that moat, i've got all of your data. shape wee is the basic have to change. you can't score the touchdown by hitting in one place. cory: the places where the conversations are happening, it's now happening in the board room. after the sony hack which came out of left field and ultimately, the president of sony had to leave the firm subsequent to that and some of the things revealed did not help if they were not the direct cause -- anything that touches hollywood, it will result in a lease to movies and a couple of miniseries -- at least two movies and a couple of miniseries.

interesting on the ashley piece of it, you have an example of two things happening. you have a compromise of the data. tool.ve it as used as a cory: forcing the ceo out, revealing personal e-mails of a sordid nature. jim: yes. both of them. you're going to see more of that, data as a weapon. cory: you mentioned content. carol: you had a pretty good week. jim: we did. we are thrilled with the deal with axel springer. it is a big number. here is what i will say. something like a year ago, business insider -- carol: how long have you been invested in business insider? jim: 10, 20. it surpassed the "the wall

street journal" in people going to the site. the sites are larger and have a lot more activity and a lot more people are consuming content from them than i think the average person thinks. we have these brands in our minds that we grew up with and we think about and they are still there in many cases. perspective,ach the game has completely changed. and how they get shared has completely changed. i would argue with the millennials growing up today and how they consume news, how they consume entertainment is different. we think of things like cbs as a brand. it is, but is it? i don't know. will it be in tomorrow's world a brand for the millennial who is used to having a selection, a menu they can draw down from and they don't really care who the interim gatekeeper is even if they develop the content? carol: that's interesting. you think about content

monetization and everything online and are we really getting accurate measurements for advertisers. do we have a clear picture on that? jim: no. thatve a lot of bots generate a lot a fake business and real costs. there's also a lot of real business. true.hings are we will continue to get better over time with understanding what those intense mean. if they are automated, is there any value, are they zero value to the system? we don't even have to discuss dollars going into online. overime you buy anything $100 you probably start that with a google search. how we think about buying things today all starts -- most of it online. even the small purchases coming to your house through amazon -- cory: what do you think it is

about business insider that is working so well? jim: they have a terrific team. henry and julie and the rest of the group are terrific. i've known henry 20 years. absolutely at the right place in his career when he started this, he knew a lot, there was a terrific story for him, he is super passionate about it, he has a lot of people he has brought in through the years that are integral to the operation, and -- every business you want to have a good team. what is it about this approach to media that works? jim: it is a great new model. you get lots of content from different places.

let a people contribute, it comes from different places, it participation and how much is shared. he has done a great job of building out both the reporter's side and the virtual reporter's side, the inbound, the guests that appear, and it's in one place. you don't have to watch this or look at a paper over there. who other than the journal -- there's a few others. where else are you going to go today? when's the last time you logged into fortune? when did you go there? cory: that gets back to the brand issue of what our brands. i would argue what you're saying is business insider has become a brand. jim: it has. it's not predicated on your going to their site to shop for stuff you might want.

what percentage of page views come from the front page of business insider? jim: great question. i don't know the answer to it. i could make it up and no one would know. carol: we appreciate the honesty. media properties do you think are doing it right beyond business insider? jim: there is a whole list of new and some traditional. i think john, he cut his teeth in sort of what is deemed new-media. bloomberg has done a lot of interesting things. everybody is trying to figure it out. the hard part is how do you move away from the legacy model of got very high fixed costs, great people, but they are expensive

as health -- hell -- cory: at rates online are not making up for the cost of the kind of product we see offline, or the ap, bloomberg aside, and i wonder if we will have a robust media world in a world where ad rates are so much lower but costs are not. jim: it's an interesting question and i don't think any of us know. at the moment for the last 10 years, the next 10 years, so thatad money pouring in that will mask a lot of the issues you are ultimately asking about. at some point in the future they will be -- as those rates come down, which they will over time, and they will be much more sign when that happens, what will you be left with? a lot of the answer will be and

what do you do with the data about your readership? cory: did a generation might be a third revenue source for you -- data generation might be a third revenue source for you. i'm not even talking about data that would be psychographic. for example, the ashley madison data. carol: you can do very targeted advertising. we talked about this on bloomberg radio, you can do a targeted profile. that's got to be valuable going forward. if you go out and buy a blender, guaranteed you will start seeing blender ads. thisis where we are with collaboration. carol: i got the blender. i'm good. jim: we think we are pretty advanced that we are still back towing at blenders when you just

bought one. at what point do we start to understand or start to be able to put in algorithms to where we are actually selling you the things you want now that you have bought the blender? it's not as easy as it sounds over a big population. buzzfeed headlines have become infamous for click bait. thatere a point at which will exhaust the ability to attract viewers that someday a viewer will not see nine things you have to know before you use the bathroom again to get a because the users will decide, they have tricked me to may times with stupid series, or conversely, since the "new york post" and tabloids have been around for 100 years, it will always work? signal versus noise, i can

handle that many data points. cory: so you are waiting for three things you did not know about taylor swift. jim: we're going to make selections -- from the 1970's and 1980's when a lot of these tv shows, "entertainment tonight" and all of that -- that gets the headline, that gets us in. a lot of it can seem like bait, particularly the laundry list of things below. you are going to self curate. there will be artificial intelligence that curate's for you. that's a hard thing to do. one of the hardest things to do in news is figure out what people want to read about. you can't say, i'm interested in business or mining or whatever. and then be satisfied with your fee, because he won't get the stuff you like to read that you did not know you wanted to read until you saw the headline. carol: favorite area you find to

invest in right now. i'm spending a lot of time on digital currencies and block chains. from last year i've been pretty much full-time on that sort of thing. that has huge ramifications for many industries over a long period of time. is not an overnight thing. it is going to creep up on us and before long we will look back. we will famously said, say, we overestimated how fast this would happen and we certainly underestimated how extensively. cory: when people get it, they are all in. thank you. fascinating stuff from jim. carol: this get back to a look .t the market recap it was the first day of trading in the fourth quarter. many of us happy to put that third quarter behind us. as for the winners in today's session, williams rallying.

edwards live science, a gain of nearly 5% as well. let's talk about the losers. mattel was down. have technology closing out the day, down over 4%. that follows yesterday's gain of 7.2%. some of the big winners and losers on this thursday. cory: research analyst at piper jaffray joining us right now. always good to see you.

carol: cory hates those lines. guest: i'm impressed. we do that just to try to get some flavor. the idea is you get a little bit of demand.in terms this year we saw the lines were significantly lower. there were some factors into that but it will not be the same mega-growth cycle as we saw a year ago, that's for sure. carol: the covenant came out and sold 13 million. -- company came out and sold 13 million. gene: it's a good number. it shows overall iphones are growing modestly, probably up 5%.

as you see this play out over the next year it will be this slow, gradual upgrade cycle. cory: a big part of that is the initial release in china. do you think the feature set will be driving things? i was not impressed with the feature set. a friend of mine was showing the picture taken on the phone with the new thing that lets the picture move in the background. it looks really cool. until you see it, you don't get it. of thoses will be one cycles where people once they actually see and experience it, they will upgrade to the other big factor is they are lowering the price of the iphone 6. pointou drop that price down in emerging markets, that has a meaningful impact in terms of how many people can buy it. 6+ has nice new features, but i think this pricing is a feature that will help them gain shares. carol: what about them financing phones?

gene: they are trying to compress the time in between when you upgrade. carol: a smart move? gene: it is. if you assume 20% of people in the u.s. take apple up on that plan, that will raise overall apple revenue by about 3%. a lot of numbers there. the big take is this, as we thinksbout ways or apple about ways they can grow their business, speeding up the pace they can upgrade is probably the biggest factor. they are throwing their hat into the game. probably the carriers are not as happy about that. that will be a good trend to watch. it looks like 20% of people are taking apple up on that. apple sells the phone. i'm forgetting the bank that finances it.

they don't hold on the phones, they seldom. the -- sell them. cory: that's clever. it's a way to use their balance sheet without having to put the cash to work. it is sitting in the background. gene: exactly. one other piece to this is that some of the carriers over the past year have been offering similar types of plants. -- plans. the problem is consumers get frustrated and they don't trust a lot of carriers. carol: later this afternoon we got a headline. gene: it is interesting to see how this will play out. it seems like monopolistic behavior. from apple's perspective, amazon is not a big channel.

from the legal standpoint about, can they get away with this? what is amazon thinking? cory: making it harder to buy competitive products. gene: that's a good point. ultimately people i the products they want. -- buy the products they want. carol: let's talk about the future of the living room. where are we going? gene: the smart tv has not taken off. the future will be more of a home hub. it's going to have everything from gaming applications -- imagine your nintendo wii being able to do different apps, shopping for example. ability to search, discover, and get content when you want it to write these pieces have already been solved and apple solved part of it more recently.

the big piece everyone is waiting for for the living room to really take off will be when really compelling content packages are around. that isn't around today. there is compelling one-off applications. requires the typical consumer if they want the four major broadcasters and they want their whole package together, some level of sophistication to put it together. cable cutting is not mainstream. it is for more or less millennials. one piece that will get it to be mainstream is when there is a package that puts all that together, that is what apple has been working on. we keep hearing about negotiations. is somehink there distrust of apple because of what happened in the music industry, that the other content creators think i don't want to go into business with these guys? gene: absolutely. that really set the tone.

the other piece that did not happen in music is there was not the cable companies and that involved. some pretty profound checks they are writing for the content owners. of it hasthat piece been very difficult for apple. ultimately it will get solved and i think that is when you probably feel comfortable giving your parents a box they can manage themselves. beol: who will ultimately the big players in creating the future of the living room? will be one. google will be one. vizio. those will be the three bigger ones. and and there are companies like roku, probably the biggest market share of boxes behind the tv. carol: we talked earlier in the week about everything going on. [indiscernible] those are probably -- the other kind of big one is google

as i mentioned. i think the combination of those three will be the ones that will drive it. cory: a very dramatically different approach towards personal information between google and apple. polar opposites. , it's a strong personal value of his, believes in anonymity of user information. google, it's a very strong personal value of larry and segrgei the personal information is the key to their empire. gene: like you said, dramatically different approaches, trying to go after the same problem. it is surprising google has been able to do as much as they have in some ways given the fact that consumers are getting more and more concerned. earlier in the show you talked about security aspects. there's obviously a lot of benefits when building a business to having some of that data. it cannot be a more different approach in terms of how they're trying to address it read -- it. carol: who is right? gene: cory: ultimately the

consumer is right and that probably is apples approach is a better approach. carol: you see it in europe where there are a lot of pushbacks in terms of privacy concerns. cory: it seems like more vigor than we see in the u.s. gene: slightly off-topic, but it is something that will really play more on investors' minds over the next six months. there has been some changes around there. hasn't been a lot of news but it is something we are keeping a close eye on. cory: carol and i are usually rocking the job own. -- jawbone. talk to us about the apple watch business. maybe even bigger picture where you see the growth there if any. gene: it's early. right now the applications are good, but not the same. cory: is it another ipad or

another apple tv? gene: it will ultimately be another ipad. this is another platform. -- this isn general kind of the segue into it -- where the watch becomes gangbusters, when it can stand on its own. right now it needs to be paired with a phone. once they figure the battery out -- it will be a few years down the road -- at that point -- people want different screen sizes for different times of the day and that is the approach. is holding is what it back, the connection to the phone. the quality of the apps will start to improve. when you think of this really going vertical he will probably take the watch as a standalone. carol: do you use it actively? gene: i use it every day and the

times i don't charge it i fall asleep and forget. there are certain things i'm really passionate about. it is sort of an accessory to the iphone. as a certain percentage of users will use the bluetooth wireless headset, a certain percentage of users will have the ultimate iphone accessory, the watch. what you think the attach rate is? recent quarter was run 10% or 12%. i'm sorry, it's about 6%. there is an attach rate side to it. at the end of the day, you have to look at this as a consumer technology play. once it doesn't have to deal with the pairing part, that is when it goes mainstream.

cory: you look at the number of fitbits sold. fitbit dominates. -- has a very the big play in the first quarter the devices were out there. garmin, another interesting company that sells a lot of these things. there's clearly a big market for wearables. gene: there is. on a scale of 1 to 10, what do you think of your jawbones? cory: all speak for carol --i'll speak for carol. we are both irritated by it all the time and we where it every day. carol: they get breaking down. that was frustrating. this is the one segment they are really going after, which is monitoring your fitness , the gamification of that.

target giving it to a lot of their employees for health and wellness. that is a segment in itself. carol: that has to be a huge segment great we had a guest on this week talking about, you are a new employee, you get your id. cory: this wellness program where they go to corporations and sell 30,000 at a moment. carol: do you see that as the norm someday, you become a new employee? gene: when you have on there isn't going to cut it a few years from now. -- what you have on there isn't going to cut it a few years from now. cory: who is the real gene munster? i got a note published by someone calelled munster. time to call out doug clinton. he's the wizard of oz. your note is about the car

and what a car might mean for apple. do you think they will make the car? back -- the a step tv has been a painful topic for me so i'm reluctant to say they will come out with a car. i think they will come out with a car. wall street journal talked about this 2019. it is something big enough to move the needle for apple. carol: are they going to be working with the major automakers or do it from top to bottom? they buy top-of-the-line components and they work with the glassmaker. they hire someone else to put it all together. work with third

parties to manufacture them. at the end of the day the design will be apple. carol: what does it mean for a general motors or a ford? gene: they are in trouble. industry automotive will get turned up and down. i'm not an expert on them. in a last year because of what apple is doing i'm learning more about it. it feels like it is a painfully backwards and old type of structure that can be made more efficient with electric. carol: we teased it on radio today. there's a company you mentioned to me. google is investing in it we probably should know about it. wee: if there's one thing remember from today's show, it is magically. a private company, they are hyper secretive. cory: based in orlando and fort lauderdale. orlando.n i was begging friends of friends who would know people there.

we are showing some of their stuff on tv. it is augmented reality like you've never seen. carol: how does it work? gene: that is augmented reality. this is us guessing here, they will have some sort of a display that allows you to see virtual objects in your full field of vision. see in the video there, it will allow things to be superimposed. for example, you are walking down the street and you see someone. remind me what their name is. you are in a different country and someone is speaking in a different language and you are getting the translation and subtitles. there are some exciting things. kind of mind blowing. that is what virtual reality is. cory: the check that google wrote was the big check. gene: probably 10 times bigger than the check they usually wr ite.

methodologyw the that look where the smart money is going and you look at what google and facebook and apple and look how intense mark zuckerberg is wanting to be associated with this virtual and augmented reality theme -- he spoke at their connect conference. to be all over this and i think that is one subtle example of what the smart people are thinking about. carol: they just bought 97 patents including a virtual reality contact lens. gene: recharges with a blink of your eye. cory: you won't forget that charger. carol: we really appreciated. thanks for joining us this evening, our special edition of "bloomberg advantage primetime" on bloomberg radio, bloomberg tv, also bloomberg.com. thank you to our guests this hour. to tune into all

of our bloomberg platforms tomorrow morning for the jobs report. we

see, u.s. stocks rallied from midsession declines with investors cautious ahead of the latest job to -- jobs data. u.s. auto sales reach their fastest and more than 10 years. they say they have an -- identified more executives identified in the bookkeeping scandal. up", i'm angiest lau.