mayor consulting the government officials. the country was home 24 people involved in last month's terror attacks which killed 130 people. biden willent joe visit turkey to meet with the president and prime minister. the obama administration pressing turkey to do more to tighten its border with syria. the white house has confirmed that president obama will travel to germany to meet with president angela merkel. he will become the first sitting to attend thedent world's largest industrial trade show. comedian will cause be is charged with indecent assault. prosecutors accuse him of drugging and sexually assaulting a woman at his home. consensual.as these are the first criminal counts against bill cosby.

more than 150 news bureaus across the world. cory: i'm cory johnson and this is "bloomberg west." how do you say taxes in italian? let's take a look at which companies are best prepared for the digital future. dragaurs, droids, and racing. what smash the box office sales

record for all time. we will have the details. million tog $340 settle its italian tax bill. apple had been accused of evading taxes over five years by booking italian fayette -- sales .hrough its irish subsidiary as part of a broader eu crackdown making multinationals pay with a oh in each country where they do business. mark, explain this tax practice that apple followed. essentially where they structure some of their sales through their irish the theory, which is not an in network in operation for apple. they have been operating in

ireland since 1980 and are expanding their, but they sort tactic which is fairly common for a global apple where like they put the manager alan so they pay on ireland's corporate tax rate which is lower than italy are some of the other european countries. cory: and they got caught. mark: they got caught decades ago. this is an issue that been under pressure for not just in italy but england and many other countries. it has finally come to a head where they have made a settlement at least within italy. so they were just trying to reduce their taxes, but you could argue they also have a role in helping to structure tax code in a certain way. >> these are companies whose job it is to make money and profits. every opportunity you get to

structure something to your advantage, you're going to do it. this is 300 $50 million which maybe a lot for italy's economy. but for apple it is really not a significant use of capital at this time. also they may end up getting their money back from ireland if italy is claiming these are -- cory: it might not be $350 million after all. >> it's an issue for a lot of people. why would you bring it back just to pay taxes on it if you didn't have to? that's not the role of a corporation. it might be the right thing to do for someone who loves america and who is thinking about what is best for the american economy, but at the end of the day their job is to maximize value for shareholders. >> there have been a lot of stories about the way they

structure their tax deal to try to avoid paying taxes here in the united states where they do most of their business. >> you made a good point about what type of impact it has to apple. million dollars is not even one day's worth of iphone sales. italy in particular, this is not going to break the bank for disclosed they earlier this year to investors that other countries could step up and forced their hand in the same kind of way, and that would add up to a material impact for the company. cory: that's talk about what is going on at yahoo! in terms of what the business looks like. you are responsible for the alibaba acquisition. ofy have done a number stakes, they have a lot of nice little businesses. are there really nice assets

sitting there at yahoo! that are being ignored because of the valley -- the value of alibaba? people are claiming it is worthless, whereas you have new media companies like business insider or buzz feed who are doing phenomenally well, but collectively the revenue is less than $400 million. they are being valued collectively at over $3 million. there is clearly a mismatch between what yahoo! is worth and what investors are saying it's worth. most of that has to do with the fact that you have current investors in the company that are paying attention to the return of capital from the alibaba investment and they are not focusing on and won't be around when it comes time to think about investing in the core business. i wonder if part of the concern is that -- let me speak

english. they make money on the stuff they've got, but so much is on the desk top and not on mobile, that with the collapse of desk they areng that weathering assets. >> it's true that if you are investing money in the desk top, five or 10 years from now that is not a good investment. even though facebook says only 25% or 30% of their revenue comes from the desk top, that is still a large amount of revenue. reached is, yahoo! has an value and a brand. billion users which makes it the third or fourth largest site on the internet. there is a lot of value inherent in what they build and what can be done with it. the question is, can they make the transition successfully to mobile? it is not like they cannot make it. is there are certain point

where you can reasonably say, i have not proven i can make one of those reverse flips but because i haven't done it yet you cannot assume i will not do it in a year or so. >> i would like to see you try it. [laughter] i do think, first of all, and i've said this for but it's worth repeating. in the last nine years since i left the company, you've had six ceos, three board turnovers, and in unfavorable tax ruling. three flips to the board. it's been very difficult to focus on getting the core business executed the way i still believe it is possible and i believe they believe it is possible. i think it is fair to question whether or not is going to get done. this is a company that could

benefit from fewer distractions, maybe be a private company, and choose to make big, bold bets on the future. if you look at silicon valley, the only companies that last are the ones that constantly invest and reinvest and make multiple bets and have some of them a all. it is difficult under the circumstances to do that. you would expect bidders to emerge as that's what they are looking at doing with this company. story on how tumblr has become a symbol for yahoos struggles. >> about the same price that was paid for instagram. great instagram has been a phenomenal investment for facebook. compare that with tumblr, they've done very little with it.

they haven't even turned it into this sort of advertising business they promised when they bought it. there are so many stories like that within yahoo! and now they are getting ready to sell some physical property to try to generate some cash. everyone in silicon valley ,eems to be rooting for yahoo! i cannot say you have many --ple i meet with who say you had your obligatory nine months with yahoo!. >> we took the company from 200 andion users to 500 million from $700 million revenue to $4.5 billion. i am still a huge fan of the company. it is an iconic property that represents a lot of the good that came out of silicon valley, a lot of the original innovation

and people taking risk. two very lovable founders. plus there are 10,000 people who work there. we want people to have jobs. think that if they can get focused, get rid of the asian assets, distribute the capital and keep enough to invest in the company, it's not like the internet is over. you saw the successful transition of adobe, a turnaround of a stock that went to 95. to 19 then focusing on two significant assets and splitting them. so we know this is possible and i think we should continue to root for its success. cory: thank you as well for your time. dan will stay with us a little longer. a number of users of mobile

phones topping one billion in india. the only other across that market is china. it's also the only other country that has a billion people. more than a dozen phone operators are fighting for customers and driving down prices. it's been a tough year for media stocks. everyone starting to raise the white flag. and star wars, pushing this to as box office record massive number we have never seen before. that story next on "bloomberg west." ♪

cory: a record year at the box office thanks to record -- thanks to blockbusters. being the record set in 2013. walt disney and comcast and universal pictures were the big winners, sharing almost half of the years spoils. billionl had $2.55 according to box office mojo. real consequences of corn cutting. by bloomberg media reporter jerry smith. a terrific story today at bloomberg.com. talk to me about what we found in this year of fear of the cord being cut. >> a lot of the fear started around early august. disney had an earnings call

where ceo bob iger talked about how he's seen some subscriber and investors, got really concerned about his comments, because the thinking is that if there are problems that espn, if they are losing subscribers, what is it save about the television industry as a whole? sortrly august there was of a media stock meltdown and some of the companies recovered some of those losses. disney actually ended up at the end of the year up a little bit. it really started in august and a lot of the companies never fully recovered. cory: there's some irony with disney was the only company that was up despite that hook up -- pickup they took. >> i don't think it will be overblown. my company focuses on the

college market. 50% of all college students, we surveyed them all the time. the fact of the morning is -- the fact of the matter is they don't think they need to get tape -- cable television. the generation after that and after that are not accustomed to buying cable. when cable started, we all did it for a clear visual of being able to watch a show without fuzz on it. then it became about programming and we were demanding programming. a lot of people made a lot of money. then what ended up happening was they ended up packaging things you don't want and requiring you to pay for it in order to get the things you do want. words, timeer warner said if you want cnn you have to carry all this other stuff we've got.

if youfor the consumer, want to buy the sports bundle, you have to get cnn and 17 other things. that stuff does not work with people who don't care about the time of day or specific program ming. the internet is broken down to two categories, i'm busy, or on board. .emember what it started with we are in a situation where this generation will not be thinking they need to be paying -- paying this high a price for content. let me explain why jerry is wrong. if you want to watch a football --e, you're going to get cnn espn. you're going to want to have the things that live tv still does. >> that's why we saw looking back at media stocks, disney

ended up doing ok whereas a company like viacom was the of theerforming stock s&p media stocks. by congress not have live sports. are in anwhere we on-demand world, people want to watch what they want to watch whenever. having live sports is critical to getting the audience and the advertisers that a lot of these companies want. cory: i think you just explained why i was wrong. live sports may decide they want to sell it directly and could make more money. cory: we have seen a lot of those networks fail. >> things are changing pretty dramatically, though. the cost structure has to come down on these things. the end ofing it's cable. the issue is, if you don't have high quality content that people

are willing to pay for directly, you could be in trouble. i don't think people are going to continue to pay for things they don't want just to get the things they do want. live sports may be the exception. most old people start off as younger people, i think about 100%. >> we know what they are doing in music, education, music, and politics. it is a generation that is not changing. they have always grown up with it. they only know the iphone, netflix, hulu, and you too. that is their world. i have a 22-year-old daughter, rachel, who now has a job in new york city and is about to move into her first apartment. i'm like, you've got to get a home phone and cable. why, andke wine, --

no. i'm saying to you that this generation does not see the world away we all. we need to really be aware of that. content will always be king and high-quality content will always be paid for. cory: my eight-year-old and 10-year-old daughters don't know how to use the cable guy but they know how to find everything they want. crownedp, a new king is , the world's richest larry, and it's not the cable guy. ♪

musk is hoping to make space travel cheaper. russia's deputy prime minister said the main goal is to make space cheap. competitors are stepping on our

toes like elon musk is doing with his projects. that spacex state and his position in tesla makes him one of the richest men in the world. thebillionaires make up bloomberg billionaires index. the first annual decline since we launched the index in 2012. high-tech entrepreneurs are well represented in the index. bill gates so his net work take a $2 billion hit this year. joining me now is tom metcalfe and dan, my guest host for the hour.

text is seen as a place where great wealth is represented. does that represent the change in the index or the members of the index? >> tech stands out from all the other industries. you mentioned the index as a whole was down near $19 billion. start up by uh and can push a theguys on to the list but top tech billionaires, as you ezos, gates, and zuckerberg. there are two larry's in the list. >> i would like to be adopted by either one of them right now. cory: the people in silicon valley care about this?

dan: i care. do they care? i'm very fortunate to know many of these people and work with many of these people. the fact of the matter is these people look at well not as a scorecard but as an asset. i think larry, probably yes. you're talking about the more recent ones like mark zuckerberg and those people. i would say wealth is an asset to be used toward something they believe in. cory: thank you very much. you're watching "bloomberg west." stay with me, we have a lot more to come. ♪

cory: i'm cory johnson and this is "bloomberg west." coast.30 on the west

a look at the stories making headlines. happy new year's eve to you, angie. much. thank you so we are counting down the hours the last trading day of the year. happy new year's eve to you. we have a lot of headlines to share including a report from japan. the nikkei news says talks combining toshibas home appliance unit with that of fellow struggler sharp. high tai chi made good for the toshiba health unit and it rose the most in four months on news of the possible sale of its medical unit. china goes into the new year with a message for currencies regulators. the free lunch is over. sources say they have suspended cross-border trading and selling it later in shanghai. the yuan fell as

to a five-year low, but later recovered. resource companies it by commodities slumped this year but it remains optimistic on china. said china's growth engine will drive demand for raw materials in the long-term. he also said glencore remains focused on trading and maintaining its investment trade rating is key. glencore stock tumbled 70 percent this year. the chairman of china telecom has quit after being targeted in an official investigation. he step down on wednesday. over the weekend the government said he was being questions about severe violations of discipline. that is seen as code for corruption. eve, i'm year's picturing you in an even more glamorous outfit with a glass of champagne. plan is to do a

lot of reading for the upcoming year. i think it's all going to be about china and of course i will share some champagne with my husband. >> we will get there eventually. thank you, angie lau in hong kong. we appreciate it very much. ♪ cory: we're looking back at

highlights from the show from last year. emily chang traveled to dell world just after it announced its merger with emc. here for your viewing pleasure is our bloomberg west talking stuffer. >> i wanted to understand what they were doing and why they were doing it. when we understood that the intent is basically to drive the platform, as i call it the icebreaker strategy, and push into new territory, and then we come in with a product that is more affordable and we can sell 100 times more, that works. seeing dell are deal in biggest tech history. microsoft, on the other hand, has done a lot of smaller deals. why not a bigger deal? is it too risky?

she lives the stuff for. i don't start by thinking, michael did a deal last week, i should do a big deal tomorrow. that's not the way i think. emily: is it something you would consider, and under what circumstance? >> we have a clear vision of what we're trying to get done. i want to stay true to that. is biggest that we have organic, always. that, we will look at any opportunity that fits with wherever you want to get to. anything i asked myself each day is, i don't want to be every part of the tech industry. microsoft has the unique contribution to make. that sense of purpose and identity is what makes company

successful, not just doing everything. to me, that is what will drive whatever we do organically and in organically. loty: we've been talking a in silicon valley about the unicorn and these valuations which are going up and up and up. what do you see their? >> there are some different things going on. clearly when i.t. moves just from the realm of making companies more efficient at doing the old things, into this visual transformation, it is a game changer or new industries. they see these new companies being created. are all the valuations making sense? are they all going to work out? not.bly but there are some fabulous new companies that are being created, so i would not overlook that. say there are 150

unicorn's that are overvaluation. how many of them are real? >> both sides of this argument have their points. .here is a book that i read the author has written a fantastic book around the natural financial cycles that fund technology. it has been true from the industrial revolution to today. you have these booms and busts. during the boom, because nobody wants to be left out, there is over funding. the beauty of over funding is lots of ideas get to flourish. out of that, there will have to , butually be a correction out of 150, there will be 10 or 15, who knows, very successful companies. great about the

american entrepreneurial system and the competitiveness of this country. i think we should celebrate that. investors have to have caution, because you have to really make sure that you know there is a boom and there is a bust in these cycles. that's always going to be true in our economy. emily: and where are we now? >> if i could time that, i would not be sitting here now. the tech rolled is fired up about virtual reality, but there is a problem. few people on the hardware needed to support these systems. there are 13 million personal computers that have the graphic lessilities to run them, than 1% of all the pcs out there. one stock we are watching, gamestop. bad times are ahead, 46% of the as they tryhorted to adapt to a digital area.

the stock has slumped 38% so the short has paid off. the highlight of my day has been watching seals out the window next to my desk. seal out iniant front of our office right now. it's a cool thing to watch. i will take one for a walk later, maybe. ♪

cory: tomorrow, michael holland, one of a favorite investors, will join us at 6:00 p.m. eastern time. actually that is 6:00 a.m.

eastern time. we're looking back at the best and brightest moments on bloomberg. sitting down with some of the top names in technology including stewart butterfield. emily started by asking her where he -- where slack is focusing its efforts. tech companies like airbnb. we have older institutions like dow jones and the wall street journal. we have the department of energy research lab, the general services administration and u.s. department of state. we've been avoiding consumer. we have a pretty large account management team and we hear from customers after they've been successful.

there have been concerns that dropbox for example did not start thinking about a sales force soon enough. is that a priority for you? >> there's an empirical question about what would be the best way to grow. my favorite is advertising. it's difficult to lay off 250 salespeople. a second choice would be other paid marketing. choice would be sales. much more expensive and much harder to make a change. if you hire 1000 salespeople, that's 1000 people that are employees of your company. like i said, it's an empirical question. we have been growing historically about 20% or 30% of my. that has slowed recently to 15%.

it was reported that dropbox may be seeing the beginning of a down round, downgrading the value of the stock. why won't that happened to slack? why won't you fall into that trap? is that something to worry about? >> yes and no. that thisbe 95% sure is a valuation we can grow into. people argue that the company is worth this much money right now. can the company grow by 10 at our 20 x? what are the odds and what kind of price are we willing to pay? to a certain extent it is borrowing against future growth. so it is a concern.

not something i'm specifically concerned about right now. we have a quarter billion dollars effectively in the checking account waiting to be deployed, so we are in a great position. >> you be happy to know that the bloomberg technology group is now experimenting with slack. is there more he can do to replace e-mail and make sure it's not just part of another kind of collaboration that requires more attention? it only works where it replaces or consolidates other means of communication. it will not replace 100% of your e-mail. that's how meetings like this will get set up for ever. but it's a terrible way to communicate internally. no matter who you are in the organization, you have a tiny little slice and everything else

is ok to you. despite the fact that there might've been hundreds of millions of messages. it's only going to work if people are actually communicating. instagram keeps reporting incredible numbers. snapchat is doing well as well. facebook is dominating the market overall. how do you see this playing out? >> it's impossible for me to answer that. i think it will take a couple of decades to figure out how to best deal with this stuff. everyone has a camera with them all the time. it's been around for people like us a little longer but for people in the mainstream, some

people only got their first iphone 4 or five years ago. it's a new capability and it will take a long time to figure it out. jaredjerod lehto -- leto, everybody. what are you investing in right now? my best investment, i kid you not, is in slack. i'm a proud investor and a proud user of the product. it has made my company more efficient and has made me happy. emily: wow. know stewartu quite well because you bought flickr from him when you are

running yahoo! what is he really good at? i think he's a really impressive guy. he is sharp, he is humble. >> i think he is judicious with his capital. he is a very bright guy. also everything you said, humble, and smart and creative. he plays for the long game. what has been fascinating about flickr and slack, both those companies were originally started as companies that did something very different. it was flickr, it was a gaming company and it became photo sharing. this is a guy that can see the future and then build a team and get the necessary investment behind it. the confidence he got from the success of flickr enabled him to go on to a much bigger game here. i want to talk about

what's going on with education technology. gnc conference that focused on education technology. i was amazed at how many startups there were. you acquired a bunch of companies this year. see going on you in that industry. >> just think five years from now. this is what we do. do you think there will be more people trying to learn, or fewer? will there be more people are less people learning online? do you think the proliferation of mobility will break down the importance of geographical locality? i think what you are seeing is the early stages of people better,e can do this

less expensive, and deliberate over the internet. we are only now able to get people like kleiner perkins who are willing to fund tech companies. becoming more consumer-based companies, going directly to the student, the parent, the learner, and the internet lets you do that. get we do is help students into the right colleges, by getting colleges to help recruit them. we do that with the data and matching. we help you pick your classes and get you the required learning material for less. then we can match you for homework help or live, online, on-demand tutoring. then the logical internships and then ultimately, to careers. this is the kind of thing we think that a student who is more to onerected, as opposed

who is being directed by institution, will benefit rum. cory: you have grown this from a textbook renting business and building are a lot of other ideas to build a much bigger business. awonder if we will see handful of monster companies, techf this ad tech -- ed focus. >> i think you will see some breakout companies, and our goal is to be one of them. we have access to 75% of all high school students who intend to go to college in the united states. we have 4 million paying customers and over 40% of them are paying for digital service. print0% don't even use textbooks. the momentum is moving in our direction. we are likely to be one of the breakout companies. you either need to own the content or on the distribution.

it is not unlike netflix, they own some of both. most popularly the homework help product. we see more and more of this in writing and math and tutoring and many more subjects. we are just launching our first interactive test prep. we are still thinking about the princeton review. these students don't know what the princeton and rick -- the princeton review is. text, wet's video or are building those things. others are building those things by having the biggest brand and the biggest reach, we want to distribute them. the future is enormous in the tech space but it's literally just getting started. stay with us for a little

bit. we appreciate your time with us. coming up, ending on a down note. ♪

cory: startups don't always go so well in the early days. one of the pioneering rides announcing it will suspend ridesharing. what would have been probably the biggest day of all, new year's eve. i was a taxi driver once upon a time, which you may not know, and new years he was the day in new york when we made the most money. onsee these guys shut down the biggest day.

like a long time coming. sidecar was an early player but only raised $39 million and uber had more than $10 million. money,s of the amount of sidecar was far behind and had not been able to keep up. dan: the internet is all about scale. if you're not number one or number two, you're not likely to survive. you cannot do these things unless you can scale. cory: particularly marketplace businesses. alibabait to ebay or you need more buyers to get more sailors and you need more sellers to get more buyers. lyft andre's room for uber but maybe not for three. >> it's a winner take all

monopoly business. two ifere be a number number three is now gone? and what does it mean to uber when their competing against the dominant international player? >> there's one company that i think will win globally in almost every country, and that's airbnb. marketplace where they can bring people from around the world. your thank you so much for time today. always good to see you. thank you for watching "bloomberg west." it's a big show tomorrow, you do not want to miss it. we will see you then. ♪

♪ >> that is the 31st of december. i have an update of top stories. couldate fund it restructure toshiba. toshibas unitsve in your structuring -- in your instruction. --shiba rows of the most rose the most in four months. china goes into the new year with a message for currency speculators, sources