♪ emily: i'm emily chang and this is the best of "bloomberg west." we will bring you all our top stories from the week. coming up, the google developer conference is all about ai and vr and we hear about the xiamoi about their new android tv set-top box. plus, facebook faces a fallout of accusations their trending topics section is biased. we would hear from one conservative voice who met with mark zuckerberg. and, he handpicked a man to lead -- he handpicked satya nadella to leave microsoft.

we will speak to john thompson and' microsoft, brexit, diversity. first, the highlights from google i/o development conference. the future of google is artificial intelligence and that was the message. the company unveiled a digital assistant, a voice-based search device, and a new vr platform called daydream. there was also another company unveiling aiaomi, tv set-top box that runs on android. we caught up with xiaomi's vice president for more. show me how it works. >> you have the android tv home, and this is what it looks like on your screen. we have all these rows of apps. you have voice search. then you have a row of personalized recommendations, recommendations from many different apps. the more you watch, the better

the recommendations will be. this supports four k video at 60 frames a second, which is relatively new in the industry. and it supports hdr content. emily: is four k going to take off? >> four k is already taking off. emily: how does the stack up to the amazon set-top box? >> in addition to the hardware specs i have not talked about, we have a great processor in here, is the approach to content. we are working in collaboration with google. android tv brings the content you want, we have google play and all of the major entertainment brands are bringing their apps, most of them are already here. you have a huge number of games and you have youtube, the official youtube app you can only get it on android tv. just a wider variety of content options that you don't get anywhere house. plus, you have a lot of the

google innovations. for instance, i can do this. what is that movie where jim carrey gets his memory erased? there it is. "eternal sunshine of the spotless mind." i can watch it right away. all the stuff google is talking about. emily: google assistant made that happen? >> essentially, that is the beginning of it in the background. emily: do you guys have an answer to google home or amazon echo? >> it is kind of the future, isn't it? we have a mature smart home strategy. it would not be a terrible guess to say we care about this stuff, but we are doing the basics launching a tv-based product. first. we will be launching smartphones in the near future. we are very excited about the home system. emily: talk to me about your international expansion strategy. these great numbers came out about the me band 42% year-over-year. you are beating apple. but most of the sales are in china. how well do you think xiaomi will translate abroad?

>> i think it translates really well because we focus on the product. what this market cares particularly about, a very sophisticated market. look at what we see, all this innovation. consumersoftware and electronics company, so our focus here in the u.s. is to select the products which we believe people in this market are going to associate with, thinking these are high-end products, things i want at home. that is the angle at which we will come. emily: are you running into any challenges when you are looking at expanding globally? if so, what are they? >> no challenges in particular, but we want to be focused. we have been in china for six years and in india for almost two years and we are doing very well. we are number three in india. that is even faster than we expected. we are just about at the point

that we are thinking about the next market. the u.s. feels like a market we are investing in because it is a large market, but it is a most important market in the world from an influence perspective. what happens in the u.s. influence the rest of the world. having a strong brand here and successful products in the u.s. will help everywhere else. emily: my interview there with hugo barra. google has been clear about its ambitions in virtual reality. first, they unveiled the cardboard, the affordable head mount that pairs with the smartphone. now the next generation an , ecosystem called daydream. our editor at large, cory johnson caught up with google and ask them to tell us more. >> daydream is a platform to enable high-quality virtual reality. it consists of phones with very high specifications to make sure they can render things smoothly and really good sensors. , and a reference design for a headset and controller so you can slip your phone into

something and have a comfortable experience and interact richly in vr and the apps, like youtube vr. something we have been working hard on. >> the components, the processing power has to be just massive? >> what is exciting in today's mobile phones actually have enough computing power in them to drive this experience that can make you think, wow, i am somewhere else. it is that high-quality. inhow powerful chips are phones today compared to supercomputers. is what you are carrying around in your pocket now. >> moore's law and compound growth is pretty special. >> that is the growth of an existing old industry. but you are trying to create a new industry. trying to create an industry around virtual reality. i wonder what you think the key drivers are of that new and yet not yet imagine things are?

>> to experience virtual reality, users need something to experience it with. and also stuff to experience. the apps and games and things they can do in vr. what we try to do is enable today's android ecosystem to build the components at once. we are making investments across all parts of that. from the hardware to devices through to the applications. ,>> give me an example. something that helps iterate that process. >> one of the things we have done is create a controller that we are working with our hardware manufacturers. to create more versions of it, so that any company making a smart phone can manufacture a controller or headset. we have done the hard work to make some thing comfortable and great with great optics. it is nice to use and could create an immersive experience. we handed the knowledge to the companies to give everyone a leg up pushing vr forward.

appsck one or two or three you think our killer apps? which is tilt brush, an app we made in google, which lets you paint in space with light and paper and fire, and any other material you can imagine. artists are using it to sculpt amazing things in virtual reality. the second thing is a version of youtube we built from the ground up for vr. it includes spatial audio so sounds appear to come where they actually are. it will let you visit concerts and events in faraway places and experience those like you are actually there, but you won't have to fly around the world. >> there is a downside. you won't get the frequent flyer miles. >> there has been some academic work suggesting it can be exhausting, vr, the immersive game stuff for example, playing

call of duty for 18 hours can be exhausting on an xbox. and in virtual reality it is too much. what do you think about that? >> vr is certainly more immersive. we are focused on bringing amazing, real-world content into vr. we are building this camera called the jump camera that lets you capture an environment in vr. we think that will open up some interesting things. taking you to stonehenge or the taj mahal around the world. there is something very special about the ability to transport you to other places. that will be some of the most compelling and widely adopted vr content. emily: cory johnson with google's vice president of virtual reality. coming up, is facebook suppressing conservative news stories? mark zuckerberg meets with top political thinkers to allay concerns. we will talk to someone with at that meeting. and later, one of the most experienced corporate leaders in

silicon valley, my interview with john thompson. ♪

emily: facebook, finding itself at the center of a media storm this week after reports surfaced of the company's trending section was biased towards liberal news. ceo mark zuckerberg called for a meeting. among those in attendance, glenn beck, the head of donald trump's campaign and former white house press secretary dana perino. we spoke to another attendee, arthur brooks, president of the american enterprise institute in washington, d c. how would you describe the overall tenor of the meeting and your takeaways? >> it was a good, constructive meeting. facebook senior leadership was there and they expressed they were worried about trust, not just with conservatives, but people all around the country, who may be worried about being underrepresented and they wanted to know what we were thinking

and they told us some of the things they were thinking about doing to fix it and we got some feedback and it was good, very interesting. emily: on that note, would you say that mark zuckerberg admitted, or indicated that there was bias at the trending topics section? >> no. there is an investigation that is ongoing. they do not think there is a conspiracy, and i am sure there is not. quite frankly, it is impossible that there is some sort of conspiracy going on on this. emily: why do you say that? >> because conspiracies are hard to pull off and not very profitable. there are 167 million facebook users in the united states and they want a platform that appeals to all people with different viewpoints. having people inside the company, or in leadership that we are trying to shut that down would be a pretty bad idea for business, that is not what they

want to do. i do not think anyone in the room thought that was what was going on. emily: ethan, crowd pack released data, 89.6% of facebook employees are liberal. 50% of them are more left leaning them bernie sanders, does that matter? >> i don't think so. i think facebook is probably an overall reflection about the demographic of the people who work there, they are very young. they are a young company. they are based in silicon valley where overwhelmingly people are left of center. maybe right on par with facebook's demographic. what is interesting about this story, emily, it is sort of -- moving us closer to the line where facebook is acknowledging they have influence over us in very subtle ways and everything i have heard the company say is they take that seriously and it sounds like they reiterated that today. that is something we will have to watch and i am curious, did facebook acknowledge that, did they say they understood that what they put on their news has influence on what people perceive?

>> yeah. they talked about trust. and trust matters to everything -- it is everything when you are a media organization. particularly one that disseminates information without editorializing. facebook has no ambition to become an editorial page. such that you don't want to identify it with one particular point of view. this brings up emily's last question, does it matter that a liberal point of view so overrepresented from a national perspective at facebook? i think it's an interesting question. i think it is a big opportunity for facebook as a matter of fact. i believe i could faithfully represent liberal points of view although i am a conservative. it would be a good idea to have more different points of view in the room, in the community. i think mark zuckerberg can use this as a major opportunity to have facebook be a forward leaning kind of company that tries to represent americans in a more unbiased way simply by getting more voices in the room.

emily: there seems to be some tension here in that. facebook is an independent business organization and the conservative party would say that the government should not ever interfere, interfere as little as possible. so, what exactly do you really want from facebook? what exactly -- >> i do not know what i particularly want from facebook. they were asking my opinion. it is not that i was going to facebook with a set of demands, i have no demands. i want free enterprise, i want a great company to be able to grow and serve americans better. that is the job of capitalism as far as i am concerned. they just wanted to know what i thought they could do to make the situation go from something that is a bit of a conflagration into an opportunity. that is why i was there. emily: what do you think they can do? >> i think this whole idea of using this as an opportunity to pivot to a community that is

more representative is a big idea. if you have a company in silicon valley, it is overwhelmingly a left-wing place, i get it. it is also a pretty nonreligious place. people who look at facebook and are relying on it with trending topics and news feeds, they are not all like that. and maybe this is a good opportunity to build a community where people in a civil and respectful and friendly way can understand each other's points of view a little better. in so doing, maybe some of these bumps in the road would be naturally avoided. emily: in terms of users on facebook, mark zuckerberg pointed out that donald trump has more likes than any other presidential candidate and also, that fox news gets more interactions on facebook than any other news outlet by far. >> yeah. until i heard these accusations, i would not thought there was any bias here. and facebook is in a position to use their technology to show that. they can algorithmically show or prove or disprove that there is

a systematic bias one way or another. i am curious, did they talk about deploying technology to improve the status quo or to rebut some of these allegations that have been made against them? >> yeah, for sure. the trending topics algorithm is a pretty new thing and it is very small compared to the news feeds. it is something that they are trying to get right. they are extremely interested in how they can improve it and are very much in listening mode. in the weeks and months, we are going to see some actual, positive changes in the way they deal in terms of engineering solutions. i think cultural solutions will have to come along and i think they are interested in those as well. emily: that was arthur brooks, president of the american enterprise institute. coming up, will break down apple's big bet on the company may be paying off.

could the days of the elevator pitch be numbered? taking pitches on snapchat. more ahead on this hour. ♪

emily: earlier this month, apple made a $1 billion investment in china's leading ridesharing company. didi chuxing. the iphone maker may not need to wait long to cash in. reports are swirling that didi is targeting a u.s. ipo in 2017. something the company denies. the timing will depend on the outcome of the battle for market share with uber. we broke down the story. what do we know, and what did didi say? >> the report is from us, 2017, we could be considering ipo in new york depending on the competitive environment. there is some wiggle room.

emily: didi denied the report? >> yes, but i think it sets up the timeframe. emily: you just spent several weeks in china. you used both services. what did you think? >> it is pretty clear that there is one service the needs to work on quality a little bit. the other one obviously, too. uber has some ways to go in terms of quality. drivers arriving on time, knowing the city. didi has an edge because they are paying higher wages. therefore they're are getting the drivers that know the city better. a lot of people tell me, and these are telltale stories in beijing, where drivers come from outside, far away. they come to the city for the first time. it is their first job. they don't know the city really. there is a lot of work to be done.

i think it is not true that they have 99% market share. emily: i did not the huge difference, but i think if we had gone farther out to the city edges, to other cities, it probably would have been more difficult. what do you make of apple's investment? >> i think it is probably a very smart move on behalf of apple to get into the chinese market. they will benefit from it. we all know that there is a government investment in didi in china. you have a situation where you have a government investor and you have apple trying to get along with the government in china as well. there common investors in the same company. thing you got this interesting baidu andere of tencent and alibaba. they were invested in the main competitors and they came

together. now you have the baidu part investing in uber. that compares to the didi part. now apple and the chinese government. a very interesting lineup. this is like politics at a very high level. emily: let's talk about this for a moment. when the president of didi was here, we asked about the relationship with the government and how open regulators are to the idea of a car sharing service across the country. take a listen to what she had to say. >> the chinese government has been more and more open to us. supply issue is the top issue. the chinese government understands we need to utilize the existing resource to put into the commute system so people can travel. emily: so here is my quest set -- my question. china's government has made it impossible for companies like facebook and twitter and google to succeed in china. could they do that same thing to uber? >> i think there is a huge economic need for this, there is anxiety in china about where the economy is headed and this is an industry creating a lot of jobs. and that is to uber's advantage.

it is not a media company, it is not about political speech, it is about transportation. so, i think uber hopes it will not get categorized as facebook and others have been. emily: as somebody who has run a private company, do you take -- think that didi should go public in 2017, or should they continue to keep raising money if they do not seem to have a problem? >> i think it depends on their international plans, whether they want to focus only on china or other markets. it also depends on, at some point, what is the financing needs and pricing they can get. they are supposedly burning both of them, uber, as well as didi over $1 billion a year. emily: even didi is burning over a billion dollars a year? >> they are both burning a lot of money. uber is probably going about $2 billion last year in losses. they are losing a lot of money. for uber, it is more than just

china. mily: eric newcomer and syriac -- cyriac roeding. coming up, my interview with microsoft chair and investor john thompson. what he thinks of brexit? and his advice for marissa mayer. ♪

♪ emily: welcome back to the "best of bloomberg west." this week, microsoft chose a side in the brexit the, saying they should stay in the european union if they want to avoid hurting trade. that makes it one of the largest companies to come out against a willreferendum when brits vote on whether to stay or go. i spoke to microsoft chairman john thompson about the decision. john: you do not want anymore geopolitical instability because we have enough instability as it is, so to the extent that there is a material change in the e.u.

consortium, that creates geopolitical instability and that is not good for the environment, be it business or what is going on for the citizens of the european union. emily: what would you like to see the company focusing on in the coming year? john: i think the focus is good. we are focused on cloud, hybrid model of the cloud, application services that we can deliver, not just in the cloud but for mobile devices. if ever i would like to see something change, it is about pace. from my days at ibm, we never seem to be moving fast enough. and i think that is the case when you are established. while you believe you are moving fast, in fact, you are not moving as fast as a startup. emily: how aggressive would you want to see the company being in monetizing the cloud, which seems to be the future? john: business as triple digit growth, and it is not common to

have something that size still growing at triple digits. but could it grow twice that rate? it is possible. given that there seems to be a titanic, tectonic shift going on in the industry, where everyone is moving to the cloud, why shouldn't we capture more of that? should we invest more of that? if we invest more, how much more would revenue growth be? that's a possibility we will always have. re: moving fast enough to take advantage of the incredible front of us?n emily: how do you see the cloud wars playing out? history, whatat you see in a category is that there are two or three lite eaders in the category.

we find ourselves in the lofty position of being of the one or two in the cloud space right now. the question is, can we sustain that position and move toward be number one in the cloud space? emily: think you can do it? john: we are going to -- emily: amazon is giving you a run for your money. john: amazon had a head start and we have a lot more work to do. can ibm, google and the other players who want to the number three, can they, too, catch up, not just with microsoft but pass microsoft? we will not sit by and rest on the past success. we have got to double down to make sure that none of them catch us and we have a good chance of catching amazon. emily: how important is cloud in the cloud strategy to the livelihood of any start up today? john: today, if your startup -- you are a startup company, it has to be cloud-based. no one is looking for a

perpetual license model anymore. i can remember mark thornburg said to me years ago, i only invest in annuity revenue streams. i was like, really? i thought that was odd. that was five or six years ago. that is what all of the vc's are doing today. if it is not recurring revenue, they are not interested because it has a predictability that once you capture that customer, the sustainability is pretty powerful. i don't think, never say never, but i don't think there will be significant investments made on print software or in hardware anymore. hardware will be necessary because all applications run on hardware, but proprietary hardware solutions, i'm not sure that is sustainable. have any u.s. technology

companies cracked the code in china? john: i think you know the answer to that. no. we are trying our living hearts out to do as much as we can to both hold to our standards and principles as a company but also find a set of things that we can make, where we can make concessions to the chinese government to give us access to millions of users there. it is balancing the standards we withan consistency we want the interest we have to have access to those users. emily: tim cook is in india this week. could india be a replacement market for china? john: no. it can certainly be a supplemental market because it is one of the few growing economies in the world, you cannot replace something with 1.6 billion people big, growing but gdpown from 11%, growth is still more than three times the u.s. you cannot replace china.

you can augment china, but you cannot replace it. you were ceo of symantec for many years. they are going through another ceo transition. what do you think about what's going on there? john: it is a huge personal disappointment. i spent 10 years there and i thought we were on a very good path. obviously, we were not. i think it is time for not just the team of the company, but the board of the company to do self reflection on, have we made the right calls? if we made the wrong calls on people, have we made the right calls on ourselves? i think it is time for a lot more self reflection, but i do not know. i'm not involved in the company. emily: we are seeing yahoo! go through another existential crisis. what would he say to marissa mayer?

john: hang in there. i had activist investors at semantic for a brief time, and one was carl icahn. fortunately for us, because of the volatility of our stock, he bought low and the stock moved and he sold out, so we never really got the public exposure that marissa has gotten. i think she started with a tough hand that was dealt to her. and she needs to play it out. do not let an activist to push you to do something you do not strategically believe in. to the extent that her board supports her, hang tough. emily: this is an issue we had talked about a lot when it comes to the technology industry, diversity and the lack thereof when it comes to women and minorities. given how many years you have spent in the industry, where have you seen the most progress and what do you think there is still the most work to be done? john: some of the more established companies have done

a better job. older companies like ibm, if you will, has done a terrific job of raising the issue and trying to do something about it. it ultimately comes down to the numbers, not the words. numbers do not necessarily support the words right now. i was quite shocked when i came to the valley in 1999 when everyone was so enamored with the fact that i was the highest-ranking african-american in the valley. i was like, what is the big deal? i now recognize it is a big deal. we need to do a better job of diversity and inclusion, and i think companies like microsoft, google are working hard at it, but they have to double down a -- or triple down to make real progress. emily: that was john thompson, microsoft chairman and investor. coming up, the company that reimagined the vacuum cleaner is after your hairdryer.

we take a look at how this everyday appliance has been reimagined. for more of our best interviews, check out the studio 1.0 podcast. subscribe on itunes and sound cloud. coming up monday, we will talk to twitter cofounder biz stone and the makers of hbo's "silicon valley" about the changing world of social media. ♪ emily: dyson, the pioneering

british company, is in the midst of a transformation and they want to remake the way we think about home appliances, first with the vacuum cleaner and now upgrading the lowly hairdryer. driving that is a lot of r&d firepower. they spent $71 million developing the supersonic. we spoke with the ceo of dyson. so this is a $400 hairdryer. by should i spend $400? >> first of all, when i turn it on, we can still talk. emily: it is fairly quiet.

>> what matters more, we have really reinvented everything about the hairdryer, so the first thing we did is develop a small digital motor, very powerful and it creates a lot of air pressure. we put that in the handle, so the weight is at the bottom so my hands do not get tired. we put intelligent heat control because most hairdryers burn hair. it drives -- dries faster into a shine. and i have three women in my house and i can tell you that they would absolutely kill me if i took this away from them. [laughter] >> you spend all this time on the technology. so what else can you do with this quiet hairdryer tech? what other products can you reinvent because i don't dry my hair that much? i'm not your target demo. >> i do not have enough. unfortunately. it is a great example of what dyson does. our engineers get frustrated

about things, and then they want to solve a problem. when we looked at hairdryers, nobody had really thought intelligently about it. if we redeveloped it, we could come to a different place. we have done the same with vacuum cleaners, battery driven now, they are very powerful, and we are doing the same with fans and air purifiers. emily: what else? >> we're in the midst of launching the most exciting slate of dyson technology. later this year we are releasing an autonomous robotic vacuum cleaner that is connected, so when you are on vacation you can tell it to clean and you will come home. emily: your vacuum can clean my you are not home? >> while you are not home. we had 2000 engineers working

with 40 universities. and there's enough frustrating things left in the world that we think maybe we could find a solution to. >> why do think it took so long for someone to redesign the hairdryer? it has been the same product for the last 40 years. >> i think that is true. because if you really want to come up with different technology, you need to take the foundational approach. i do not think others will do what we do. we developed a motor. spent $70 million in other developments, only to make a better hairdryer. that motor, by the way is the fastest spinning digital motor in the world. out of that you can create a , different appliance out of that. >> i hope you make all household appliances quieter. the noise in the house. >> that is frustrating, no? patents inalso filed

the battery area and you are working on making better batteries. what is the state of your research so far? >> we're very interested in batteries. it goes back to dyson engineering and getting frustrated about motor technology. we said, surely we can do better. today, we are relying on the best battery technology, but it limits what our products can do, so we are investing in solid-state battery technology with the aim of finding a breakthrough that can deliver significantly higher energy density than is available today. that means machines that can run much longer or much more power. emily: you think you can take on tesla? >> we are not commenting, and will not, but we get constantly teased on what engineers work on in the labs. emily: coming up, he cofounded

ng phenomenon twitch and is now investing in all things video. now taking pitches on snapchat. we will discuss. ♪

emily: the days may be numbered for the elevator pitch as entrepreneurs start polishing their snap patch -- snapchat pitch. ycombinator is inviting pitches from snapchat and the 10 best ideas will be chosen. i caught up with the partner who came up with the idea, 32-year-old justin khan, to find out more. justin: all these people had been reaching out to me for entrepreneurial advice on snapchat. they would be asking, how do i get started? they were sending me pictures and there is a massive community of young people on snapchat, so we figured we would go where they were and tackled the competition.

emily: how does it work? justin: we opened up an application process for companies to apply due to take -- and so far we received 400 applications, a lot more than we expected. emily: so vc's are increasingly using snapchat. giving start up lessons. did you watch a bunch of those and finally say, we should do this? justin: i got into it in december, after years of having snapchat and looking at it from a product perspective. not really getting it. when i startedt watching dj on there. emily: there has been a big climax of every batch where companies present their final product. investors are there to watch. . there has been criticism that demo day is picked over and the

best deals are taken. could you see this replacing demo day, or the way demo day currently works evolving? just in: snapchat will not replace demo day. we will evolve how it works. companies that do best on demoed a are not always the companies that do best in the long run. other companies were not the most popular, but ended up doing very well. we are looking at evolving the processes and trying to figure out how to make it more engaging. emily: how might you involve, evolve the practice? just in: doing something where there are more sitdown meetings so investors can directly connect with the companies and provide a way for them to do that. emily: what is your take on valuations right now?

just in: they are going down. emily: really? justin: i think so. use of these mega-rounds in q3 of last year. since then, i think the investment appetite has gone down a little bit. these vc's closed pretty big rounds, but they are waiting to see what happens with valuations. there is a slow decrease. emily: slow deflate. justin yes, nothing : catastrophic. emily: as a founder of one of the original live streaming experiments, what do you think about facebook live, periscope, snapchat, even? put snapchate together with facebook live. emily: they are all very different. justin: periscope and facebook live are more similar. justin tv, live stream, we all have these mobile apps where we let people share video.

but they did not take off. the reason was it was hard to get an audience. the interesting thing is now, paring it with twitter, facebook, it is much easier for you to get a nod in's. -- get an audience. emily: could facebook live steal live? justin: i think facebook changes its mind on what they want to prioritize on people's feeds, so it is likely that though it is popular now, it will not be in one year or two years. you see that over time. they have been doing open graph, prioritizing graph action, then spotify was big for music, sound cloud, pinterest. then they popularized video and all of a sudden facebook feeds are full of video. and then now live. it changes over time.

facebook has the power to king -make whatever applications they want. emily: what does that mean for twitter? justin: i think the engagement is better on facebook live than on periscope or twitter, but i think periscope will do better. twitter is able to create other apps like fine -- vine. they can do the same thing as facebook and heavily promote something. emily: justin tv ended up becoming quite a success. any advice for other entrepreneurs in that same predicament? justin: we pivoted it to twitch and it worked out pretty well. emily: selling to amazon for $1 billion. justin: when we sold, people were like, that's a crazy number, but all the metrics have doubled since we sold. when we sold, it was 55 million monthly viewers, and now it is 100 million, probably much higher now.

so my advice is, never sell your platform. emily: that does it for this edition of "the best of bloomberg west." we will bring you the latest throughout the week. tune in every day at 6:00 eastern, 3:00 p.m. pacific. see you then. ♪

♪ angie: good morning, vietnam. obama begins a week long asian trip in hanoi. a frank exchange of views, g7 the mostalks featured tension in years. walking the boat would hurt hong kong's economy. bloomberg has evidence that is happening. welcome to "first up". i am angie lau.