>> bank of japan keeping policy unchanged after a second recession in three years. the economy is recovering moderately. we have the first trade services and seven months. they are sorry again. about a mudslide disaster in brazil. after committing to rebuild after two dams collapsed. they're reviewing the safety at all of its mines.

apec leaders have called for greater international cooperation in the fight against terrorism. growth.siness and the debate about climate change was discussed in manila. andmore on what is going on how to china and hong kong closed out the morning session -- there had lunch in the moment. this is the picture from singapore, turkey and mumbai. the index is up by 1%. i'm back in half an hour. time now for bloomberg west. emily: i'm emily chang and you

are watching "bloomberg west." a sunny forecast from a cloud computing giant. salesforce.com after the company raised. talk about a solid resume. i sit down with a interview with reid hoffman. now, to the lead. two big initial public offerings this week -- square and mash expected to price their ideas any minute now. what are we expecting? let's start with match. match group is the parent company behind okcupid and tinder. then, of course, there is square. it has been a rocky year for the ipo market.

do these companies have what it takes to turn it around? joining me now in new york is the reporter who has been beating the drum. alex, i want to start with you. some dispute about the square valuation. it is apple to oranges, you cannot compare public to private. >> the most telling thing, their marketed range, they are looking at $11 to $13 a share. that shows you there is some type of discrepancy. the whole conversation of

diluted share value, maybe that is for another show. bottom line, that private valuation is not what they are looking at. it has cast a shadow over these companies and over investors who might be looking to get into the next big private round. emily: i do want to ask for your thoughts on match. we have not talked about it as much. tinder is their most popular business. alex: it is the really well known one, but it is not the moneymaker. you own two-thirds or more of this online dating market, it is a fragmented market. what is next? tinder was the obvious answer to what is next two years ago? it has permeated the industry. they bought plenty of fish recently.

it seems to be the best growth playbook for them right now. emily: match and square will start trading tomorrow morning. i want to ask you, what is the number one thing you will be looking for tomorrow? gil: we want to see what the reaction of investors is. there is a poll from investors, so excited by the growth, the celebrity ceo, they should be interested in the stock. most people that follow square our payment analysts. we are all fairly skeptical of squares business. is it worthwhile growing fast? will it be profitable enough to be in the range that was set?

emily: i talked to an analyst yesterday who was very positive on square. this is not a tech company. this is a payments company. it is a strong solid business if you look at it as a payments company. gil: i dispute that a little bit. they are losing money on their transactions every quarter. what all of their comparables are quite profitable. they are growing very fast because they are in a business that others do not want to be into. that is why square is losing money, they are serving the smallest merchants and giving them a very attractive price. that is why they own that niche.

emily: interesting. alex, we were talking about the ipo market in general. how much do you think the environment will be playing a factor? alex: the environment is definitely an overhang. this premium for this high-growth company, we have not seen that come through. it is a bit of the overhang. that might be why we see a bit of a conservative price. if the business is solid and investors want in, it does not really matter so much the market conditions as long as we are not in a freefall. it is good enough to go out right now. that is why they are crossing their fingers. emily: we are waiting for that price.

thank you very much for helping us cover square on the road to this ipo. another stock we are watching is salesforce. the cloud computing pioneer reporting a 24% jump in fiscal third-quarter sales. it earned $.21 a share on revenues of $1.7 million. wall street had been looking for $.19 a share. salesforce is raising its guidance for the year. analysts had expected sales of 7.9. coming up, an interview with reid hoffman. i asked him which of the biggest social networks would survive. ♪

emily: this week, i had the chance to sit down with linkedin cofounder reid hoffman for a wide-ranging conversation on everything from the future of social networking to the rise of artificial intelligence to the endgame for uber in china. hoffman is a noted venture capitalist investing in airbnb and facebook. i asked him the not so simple question, are we in a tech bubble? reid: the key thing, it tends to be a private market bubble. it does not have as much public market impact. it is not something that when you hearken back to 2000, 2001, you worry about quite as much.

emily: we are not in a bubble in the public market. reid: quasi-bubble. emily: mark andreessen saying we are in a long-term bust and tech is undervalued. why is there such a diversity of opinion? reid: how much do you believe that new things will be invented that are not invented yet? you can build companies from an idea to something globally relevant in three years, four years, five years. uber, airbnb, dropbox. they can move very fast to global relevance. they can be important to a impact all industries. technology will be part of the solution and not part of the problem.

on the other hand, ok, a lot of investors are betting on this broadly and you get valuations where you look at a specific valuation and go, why is that valued that way? people are not distinguishing sharply between which companies benefit in which companies do not. that is the key issue where it breaks between the bulls and bears. emily: is it really subjective that we are in a bubble? reid: no one ever disputes bubbles in retrospect. clearly, that was artificially inflated and had a re-correction. the question comes down to, it looks like some of these valuations are high.

when you can pinpoint specific companies, which i will not do because it is impolite, that one seems a little crazy. private valuations are much higher than that when companies go public. you get those kinds of things where look, clearly some elements of a private bubble. however, i think we are going to see more of these companies that go from zero to a billion numbers in less than a decade that actually have global impact. emily: are you seeing down rounds? reid: not privately yet. emily: but we are seeing them publicly? is the ipo the new down round? reid: if private market valuations continue, we will see

more of those. the inflection point you see is a protection. those investors have said ok, we invested at the current price x years ago. when you choose the companies going up, you win on those. it is not clear to me we have any actual real lay-ups because you have the financial needs. we need to regroup how we are attacking the problem. part of what a layout does is to communicate the message to the entire team to say, we are really shifting from this to this and we are playing a new game and we are in troubled waters. i have seen those. i have not seen, we will not the able to make payroll in two years, so we have to lay off.

emily: what do you make of that journey? reid: what happens is, and this is the reason why i think there is this quasi-bubble in private, public markets have a lot of interdependent feedback. they can stabilize the price. private tends to be the player that puts the biggest check forward. it is very easy to get an inflated valuation. the upward trajectory of the market. that does not affect things like the internet bubble, the pension fund because it is a very focused small position. not a general public market position.

we will see more of them because people are trying to figure out what are the next airbnb's? that really matters to them economically. sometimes, you guess wrong. emily: you are on the board of airbnb. do you worry about them living up to that? reid: in the airbnb case, i do not worry about it. essentially, i think there is a lot of headroom for what airbnb can bring the most to guests around the world. over the long-term, the investors will make significant money. in that specific one, i am not that worried.

i believe so much headroom where airbnb can go. emily: what about dropbox? reid: a killer team, great technology. how does their enterprise play out? they have some other plans i cannot talk about. if those play out, it will be great. if those do not play out, it will still be great. is it the next platform for the internet or not? we will see. emily: dropbox keeps getting brought up as an example of a unicorn that might be dying, or certainly not living up to initial valuation. reid: i guarantee you that dropbox is not dying. the question is about expectation.

their fundamentals are really strong. they have a broad subscription business. will dropbox be a platform for a whole a lot of different applications? if so, they will live up to the high expectations. if not, maybe will be, it is only a multibillion dollar company. emily: our special coverage continues, hoffman dishes on one of his biggest missed opportunities as an investor -- snapchat. that conversation is next. ♪

emily: continuing my conversation with reid hoffman. we saw fidelity write down its

stake by 25%. i asked him to revisit a regret. reid: most of those stories came from public market investors, most notably fidelity. it is different than how private companies operate. if you index against a public market, you would end up with times where you would say, you would take a great company x and say we marked it down this quarter because there is a variation of public market. that is not how the private market thinks about things. it is not the timeframe on which we should evaluate these companies. emily: do you find it alarming? reid: i do not pay attention to it. emily: what about snapchat in general? you are the guy who created the professional social network. where is all of this going?

reid: we have a macro evolution to networks, mobile, people are spending a lot of time with it. those macro trends continue to be an upward direction. one of the things particularly great about snapchat, and i am not on the board or investor, they demonstrate an ability to create new products. here is a new social product that everybody pays attention to and starts building their own versions. that is very good evidence for a strong future. emily: do you see social networking as a much more disparate thing? will there be a few dominant players? instagram and whatsapp and facebook and linkedin, it is

just too much. it cannot possibly be sustainable because i will make a choice. reid: there are a lot of people in the world. if everybody makes the exact same choices, i agree with you. some people say, look, teens say the disappearing content matters to me. it helps me create privacy. other people -- i do not snapchat, i presume that you do not snapchat. you can easily get to more than three to five companies because everyone's list is different in different cases. emily: what does worry you right now? reid: the primary thing i pay

attention to is, we have seen a lot of great companies being created, what are the companies being created now? we have not seen an interesting mobile breakout company in the last couple of years. is that because we are not finding them? as a venture capitalist, we are looking intensely. whether it is more car companies in addition to tesla. the intersection with biology, other kinds of things that will have macro impacts. those are the two things. i am an entrepreneur and i am an optimist.

emily: interesting that you say that there has not been a mobile breakout company. that would concern me. reid: there are just cycles sometimes. maybe the right invention has not happened. maybe mobile distributions are difficult to figure out. unlike the web, the mobile ecosystems tend to be more closed platforms. they are driven by a narrow aperture in the app stores. that -- maybe someone will figure out how to make that happen. emily: my interview with reid hoffman continues. we will be talking about his views, on his call that a herd

of unicorns can exist. ♪

i just had a horrible nightmare. my company's entire network went down, and i was home in bed, unaware. but that would never happen. comcast business monitors my company's network 24 hours a day and calls and e-mails me if something, like this scary storm, takes it offline. so i can rest easy.

what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. update forhave an the top stories. the bank of japan keeping policy unchanged despite economists saying it is going back into a recession. the bank says it is a record and the easing is having the desired effect on the economy is recovering moderately. exports falling to asia, but demands are strong for the united states. the belgian prime minister addressed parliament on the attack on paris and iteris link within his country. peoplepolice killed two and arrested eight more after a gunbattle in st. denis. prosecutors say information

found their suggest another plan was being -- attack was being planned. square raising $243 million which have the shares below the market range. a similar story for tinder and okcupid. match is at the lowest end of the range. the two companies making their debut in new york later today. for a look at what is going on out of wall street on this part of the world -- >> it looks like we will see things in the u.s. u.s. futures looking pretty positive. it is a couple hours ahead from the european open. overall come asia-pacific is looking pretty good now with the exception of shanghai pretty much flat. losses this morning but hang seng about 1%.

the best day so far in one week. it is up 1%. the stoxx leaving the regional market. the minors doing a little better today. 29% up pretty much with this offer. 880 australian dollars. asian currencies overall have been gaining. the malaysian currency is leading the currency. snapping out three days of loss. we are counting down to the reopened in hong kong and china at the top of the hour. ♪ emily: this is "bloomberg west." we continue with my conversation

with reid hoffman. as a venture capitalist, he is challenged with identifying truly innovative ideas. i asked him if he was seeing any sort of lull in the flow of innovation. reid: i do not think innovation is slowing down. is it on the vector we anticipated? emily: what does that mean. reid: if it will be specialized artificial intelligence for medical applications. the innovation will go off the charts. you should not be looking at all of this mobile stuff. you should be looking over here at how the increase in data take old machine learning techniques and open up new ranges of applications. i am very interested in marketplaces, networks.

i am always looking there. it is a scenario i know very well. i've been spending a lot of it more time on artificial intelligence, biology, other things. emily: we will get back to artificial intelligence. i want to close the loop on this private versus public conversation. if we are in a quasi-private market bubble, do you see it affecting the facebooks of the world? reid: i tend to be focused on series a and series b. linkedin is a public company. what are the new initiatives? what are the things we are building at a five-year to seven year time frame?

emily: you wrote that post, a herd of unicorns can exist. say there are 150 unicorns right now, how many of those survive? reid: survive and thrive? i would guess given -- because of the quasi-private bubble, i would guess a third to half have a good outcome. emily: if you look at the list of unicorns, a large percentage have valuations at a billion dollars or near a billion dollars? reid: who is going to win the bid to lead the next round? just like all psychology of

numbers, if person a -- there is a natural tendency. one of the good things about the private market, you are trying to deal with much longer time frames. that kind of thing comes out in the wash over time. emily: what is an entrepreneur to do? should they always go for person b? reid: it is most easy, most natural, most human to use the number to benchmark how they are doing. select the partners who build the company you will build five to seven years from now. if the two people are equivalent, take the higher valuation. you should really think about, when you take an investor, you

are taking a serious partner, committed to making your company into something real and much bigger than it currently is and that is what matters. the current valuation does not matter at all. emily: sam altman called it unicorn fraud, this financial engineering that may or might not be happening. would you go so far as to say unicorn fraud? reid: given the number of companies, he may have better visibility into that than i do. at greylock, we do not go for that at all. we never offer term sheets like that. emily: your competition is. reid: and that is fine.

if an entrepreneur does not want to partner to build a great high integrity massively good company and five to seven years, we are the wrong partners. emily: are you concerned about late stage investors? reid: we are cautious about them. where we see the fraud is in those later stage private companies. we have gotten very careful about when we dohose investments. emily: having lived through the last bubble and seeing the diversity of opinions, how do you think we will look back on this moment in silicon valley history? reid: i think we will look back on it as, wow, you just come through a decade where interesting network oriented companies are built, everything from facebook and linkedin and twitter to airbnb, uber, and dropbox.

all of those became significant companies. kind of a little indecisive at the moment. nothing really where the valley is charging in a particular direction. if you are looking at joining the company, consider joining a company like that. right now, it is pretty indecisive. emily: what are you investing in? what are you not investing in? reid: my last two investments are stealth. the kinds of things we have done, communications, some things on mobile market places, couple of those.

i think -- i think that matters less in a long-term. if you bet right, it all comes out in the valuation. you still still get a good return on the company. my investing is less directly tied to that. emily: my interview with reid hoffman. what do uber and airbnb have in common? the need to go global as fast as possible. we will pick up that idea, next. ♪

emily: a live picture of the nighttime manhattan skyline. "bloomberg" west is live in the east today. we continue our conversation with reid hoffman. one of his biggest focuses is teaching stanford students the art of blitz scaling. reid: most silicon valley people, when you ask them the secret of silicon valley, they will give you a start upstory. the startup story is necessary, but inefficient. when you look at all the unicorns, a huge number of them come from silicon valley, a region whose population is 4 million people. why is that?

the answer lies in the fact that there is an embedded knowledge, playbook, talent base, collaboration game for how do you build global companies very fast. speed is both necessary for the expansion market and competition. silicon valley has built that playbook about how those go to market, financing, technology construction. what we are doing for the stanford class, bringing in a bunch of people who have done that and interviewing them in disparate set of areas. here is what i know and here's what people i talked to know. emily: startups should focus on going global early on. how does that square with this idea that you are supposed to focus on the product and get the

product right? reid: there is a whole set of products where you are naturally global. when we launched linkedin, we put 13 countries in the drop-down. we started adding countries from the very first day. it was a personal geography lesson. a whole stack of products which are naturally global. the second part is, small tweaks or small things that allow you to go global sooner. whatsapp was not dominant in the u.s., but was very dominant globally. the last one, you think about, global matters in terms of

critical mass. some companies say look, we know huge amount of work and capital to go global fast, but that is important to do. other companies are just domestic right now, a different product market. emily: interesting that uber is a company doing it well. uber and airbnb have different strategies. what do you make of the difference? reid: airbnb has a global network effect that is useful. people travel between countries. if you have a whole bunch of residencies in europe or in the u.s. or singapore, people who travel there, that is a global network affect. they naturally expand globally.

they do not have to do as much specific hard-core work as uber does. emily: interesting. i was wondering when you use the word natural, how much of airbnb is the beast just feeding itself? how does it capitalize on its own momentum? reid: it is the way the world should be. look, a bunch of things where having a unique experience, a social experience, staying in generic hotels is not the only travel experience. it provides economic liquidity for hosts. it creates a more cultural and connected experience for the travelers.

all of that is the way the world should be. all kinds of questions about making sure zoning is done right. that is the way the world should be. i do not -- part of -- the establishment of the community, right? establishment of belonging that is the mission statement of airbnb and that compounds naturally because it compounds through human social connection. emily: why does uber have to work harder? reid: the uber network is much more naturally local. that means it is easy to say it could be a halo of london. in order to establish there, they have to put intensive effort into growing in each specific city.

that is what uber developed, launching city teams. emily: you have been spending a lot of time in china. linkedin has been relatively successful in china. you have linked the same investors to airbnb. why those investors? reid: china is a very large, unique market. you need to address the needs of the local market specifically. you need help with understanding, are you on target or not, you need help recruiting talent, you need help figuring out, what is the competitive landscape?

as a vc myself, we did a fairly thorough study of who would be the right venture partners. we hired a president that is an entrepreneur. we run it like a startup. emily: final thoughts with hoffman, next. his advice for jack dorsey. ♪

emily: tomorrow, do not miss the blackstone group vice chair. 5:00 a.m. eastern. and later, fashion powerhouse tory burch. we continue with my conversation with reid hoffman. as we wrapped up the interview, i asked him for some parting thoughts on the challenge ahead for jack dorsey as he leads both twitter and square. reid: jack is very strong. he has had a depth of experience with both companies. he has a strong bench of executives. it is super hard, two public jobs is super hard. i do not envy the task ahead of him. emily: do you foresee him being

able to do it over the long term? reid: for his own sake, i hope you find a successor at one or the other. he is the product founder, and that is helpful. i understand -- i have not talked to him about it -- i understand what drove him to that. emily: how optimistic are you about the future of the business? reid: i am not an investor and i do not really know. emily: i would like to end with ai. the ethics of ai. what is on your mind? everyone is scared of robots taking our jobs. reid: a lot of the workforce in various forms of transportation.

i am less worried about the whole near-term ai, what is happening -- i think there are some very big steps between here and there which make it hard to evaluate. specific times of technology development within artificial intelligence could play a lot into medicine. i think that is visible. people say, is this a huge disruption? maybe it means better medical care for a lot more people. it is a question of how it reconfigures. it is worthy of a lot of attention.

what are the ways that given all of this technological change, we can continue to help invest in people? usually, the key answer is things we have not invented yet. as long as you are creating jobs, too, as a citizen, that is what i keep thinking about. emily: my interview with linkedin cofounder reid hoffman. you can catch the whole conversation online at bloomberg.com. tomorrow, we will be all over the square and match ipo's. still waiting for the pricing. tonight, steve jurvetson joins me for "studio 1.0." that is 9:00 eastern. ♪

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