mark: i'm mark crumpton. let's begin with a check of your first word news. the los angeles police chief says the shooting of two men at ucla was a murder suicide. authorities say there is no continuing threat and the campus is safe. the shooting occurred at a small office in the engineering building. the chief says a gun was found along with what might be a suicide note. islamic extremists stormed a hotel in somalia today, killing at least six people. police say two members of parliament are among the dead. the group al-shabaab claimed responsibility. officials say the attack on a popular hotel continues at this hour. several militants are still inside the building.

a french company says it's search ship has detected signals from one of the black box recorders from the egyptair flight but did not indicate how it was able to make the determination. french authorities say it is impossible to know whether it's from the data or voice recorder. in paris, boat cruisers are canceled and emergency workers are evacuating houseboats after river overflowed its banks in paris and floods hit towns across france. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. from bloomberg's newsroom in new york, i'm mark crumpton. "bloomberg west" is next.

cory: i'm cory johnson in for emily chang. $3.5 billion injection into the saudi sovereign wealth fund -- the biggest injection ever. but this -- does this change the ride hailing company for real. and we will take you through mary meeker's predictions for internet trends 2016. mark zuckerberg holds a live q&a from space. aliens, no. we will tell you how to nasa achieved stratospheric success in social media. but first to our lead. uber has turned to the middle east for its biggest investment ever, the company announcing a $3.5 billion raise as part of their most recent funding round, keeping the valuation at $62.5 billion. the saudi wealth fund managing

director will take a seat on the board as part of the deal. eric newcomer joins us with more. this is shocking. are these guys on a permanent fund-raising scheme here? they just keep raising money and keep raising money. eric it certainly feels like : that. $9.5 balance sheet is now billion in cash, on hand. they are flush with money from the private markets. there raising from everyone under the sun from google to tbg and now we have these huge sovereign wealth funds. everybody you can imagine is investing in uber, it seems. a million curious aspects to this. valuation, while high, it stays at that even though it is a subsequent round. whose equity is it selling at -- at thatcory:

point? error: they were going to raise and then said i guess we can get $2.1 billion a bunch more money and keep the same valuation, so i think you are right to pay attention to that. i do not think it is a bad sign, but it certainly shows they are reaching a ceiling when it comes to what people will pay to invest in uber right now. +++

bad sign for that company. eric it is an expensive : valuation. for any company. certainly not profitable, trying to be profitable in the united states but competing aggressively with lyft. cory: and the fact that it comes from saudi arabia suggests some ambitions. thank you for the huge story, we are glad to have you on. voxx shares tanking after hours on the back of an earnings report with sales of 30% year over year. loss per share if you believe , the adjusted numbers, the problem is billing. up to 9% from a year ago this , baffled analysts who expected growth of over 20%. that says more about the analysts of than it does voxx. sales force has agreed to buy demand where. shares closed down slightly on the news of the acquisition. they're expected to increase by $120 billion. a ubs analysts joins us right now to break it down. brent, i will start with you. that notion of -- it seems like three-on-two 300 million should million dollars be added to the top line as the projected run rate.

brent: we think this is the next big cloud. you get that e-mail about that tie.sports a jacket or the did i show you the lining, it is orange for the giants? brent: they can show that to you and you can transact. move,nk this is the smart the largest deal ever. on the basis of what they paid, they have paid higher multiples but it's not cheap. clearly, there's some risk here. strategically, it fits in. but we think thatstrategically, it fits in. they don't have any overlapping functionality today. and many of their top customers using the platform today are ar customers.

cory: may be the notion this is be $170 million is sandbagging it because if the company is on a $300 million run rate, all of those people selling this thing presumably off the bat, they should get more than $300 million. >> exactly. with the demand acquisition, one thing you can look forward to is salesforce being able to bundle this solution along with the sales cloud marketing cloud and , services cloud. there's a lot of leverage they can get because they have the best salesforce in the cloud and it is going to be much more than $300 million, in terms of expanding the cloud. interesting to me also, i took a whole day off yesterday and i missed a deal. there is seven over the last few

weeks. this suggests maybe there was not a known competitive bidding situation. i guess we will find out if the documents they just thought if are filed. we don't take it someone else will. brent: we believe there are -- from the perspective of software m&a, it has picked up. the ipo window is somewhat shut. we've only seen one or two deals this year so far, and it wasn't met with a bang. you are seeing the talent of the tech cycle. typically, later in the cycle you see a cleanup phase and now , they are chasing opportunities and consolidation makes sense. the larger guys are chasing platforms. you have seen oracle and toward retailgned

and commerce. so we think that's going to continue. we said at the beginning of the year and our playbook we expect , m&a to ramp materially and the multiples have an stepping up. i think everyone was surprised they were bought or five times sales. cory: if you look at the m&a numbers, it's going out seven or eight times sales. $2.8 billion for a money-losing business doing $300 million in revenues -- those are unforgiving numbers even though there are a lot of deals happening here. mandeep: i think what you are seeing is once these smaller cloud companies are disrupted, they are moving out of the explosive growth phase and they are not profitable. they are at a point where the best strategy is to exit out or they have to be profitable, which is unlikely.

there is some level of desperation in terms of exit, and that is what you are seeing. and they were probably the early ones. has set theandwear bar high, you can expect a higher multiple going forward. cory: it is breathtaking to see. always good to see you, thanks a lot. softbank has plans to sell $7.9 billion of its stake in alibaba. that may be the beginning of a bigger shakeup. the softbank president is examining several possible sales to strengthen the balance sheet. super cell -- move could value the game maker $5 billion. there are reports the planned alibaba shares sale could by -- buy yahoo! japan.

coming up, the highly anticipated trend report, the playbook silicon valley runs off. facebook will go to the ends of the earth and beyond to promote live video. mark zuckerberg's broadcast from the international space station later this hour. ♪ cory: russia has arrested 50

suspected members of a hacker ring. they have stolen for just $45 million from banks of the last year. the country's biggest ever crackdown on financial hackers according to the interior ministry.

again used malware to infect computers to launch 18 targeted attacks. this comes at a time when banks are falling victim to cyber attacks. $81 million was stolen from bangladesh. now to the anticipated fly deck in silicon valley. she unveiled her latest internet trends, chock full of sobering insights. she co-authored the first internet report in 1995 when she was an analyst at morgan stanley, speaking at conferences. there are more important things to look at and the big takeaways. i love this slide deck, and i have from the very start. she's to come to our industry standard conference and now she's sharing it of a different crowd. some of the things they are talking about are very shocking,

not the least of which are slow grow rates on the internet. guest: one of the reasons she points to and one reason to love this report so much is she gets up out of the every day and goes back 20, 30, 40, 50 years and points to the fact that china has been on this massive building boom. it has been $21 trillion of capital growth in the past that years, more than we have done the previous 30. there's been a massive run-up in china and it's starting to taper off, and as a result, the numbers are coming down. cory: she basically says developed markets are developed. guest: except for india. there is still room for growth. it is the one country that did see some positive uptake in internet usage and new users and smart phone users. now it is the second-largest market just behind china, passing the united states.

a big part of that is mobile consumption, and what is happening in mobile. most of these users will never see a desktop. particularly users who have yet to be added. but without china, the growth rate would be flat. sorry, without india it would be flat. john: one thing to keep in mind with india is that indians love their cheap phones. if you look at the average smartphone price in india, it is down around $120. it is $280 in china. in terms of the revenue opportunity for big vendors like apple and samsung china was a , much richer market. you were referring about the slowdown in china -- let's put it into context. five-and-a-half plus years ago, in 2010, that was a market

growing well over 110%. i'm sorry, in 2015, the unit growth in china was about 1.5%. we have seen a rapid flow down there, due to saturation. all eyes have shifted to india where the unit growth opportunity is high, but the revenue opportunity is going to be lower because we are talking about the popularity of those lower-priced phones. cory: in china when that market had yet to take off, apple was a huge success in china. john: i think that's fair. one thing we are looking for in india they don't really have a , lot of 4g networks there, so as those 4g networks we love so much, as they begin to get belt out nationwide, they will need 4g phones to leverage the power of those networks and that means paying for a higher-priced zone.

-- phone. speaking of phones, i got i today.y sir it is voice recognition stuff, she spent some time talking about that. lizette: that was a rl highlight that voice recognition , is getting better and better as accuracy improves and latency decreases, then people's excitement and willingness to use it accelerates as well. cory: she talked about how many people use voice recognition. lizette: it is up pretty significantly. you see that as the components improve and the software voice recognition gets better, you see more people using them in the home and in the car and not just because it is fun, which 20% of

the people interviewed said that, but because it's more convenient and accurate and safer when you are driving. cory: my kids use it to hear riddles but i'm shouting out my shopping list and going through my empty refrigerator. thank you very much. great stuff. coming up, we will be back with the latest developments in the first major summit since the big summit in paris. we're going to find out how they are using technology to do it. ♪ cory: to a story we have been

following -- microsoft sold nearly 1500 patents to xiaomi.

they aim to expand into overseas market. namely, europe and the u.s., which had eluded them. they cover wireless indications and multimedia technology. a little over six months ago, delegations were working toward a historic climate agreement and -- in paris. now countries will put their money where their mouth is. nearly 20 countries in san francisco, they rollout cleantech to make the best use to scale. this is a tech story, i believe. there's old tech and coal and nuclear. guest: it's a tech story a nuclear story, it's a mix of all those things. cory: part of it is presenting

on a platter saying this is here , ready to use. you do not have to wait. ethan: one of the overall messages was about the cost of this today. certainly not everywhere, all the time but in a number of places. that's one of the messages we are trying to perpetuate across multiple governments. particularly in lesser developed countries. there is the view that you do coal you do renewables once you now and you do renewables once you get to be richer. cory: i do a day learning -- a daily radio show and there is this notion that because radio is older, it is bigger. you don't have to start with one it does not always work like thatyou don't have to start with one technology and go to the , next one. radioeople listen to every week than watch i think television, a little known fact. i think this notion of starting with new technology really changes the game.

ethan: i think there is definitely something to that. i think the newer technologies we are seeing have the potential to be revolutionary not just in terms of cleaner energy but , changing the way we receive the energy. if you have a system on your roof as we do in this building, you have a certain degree of self-sufficiency. you are producing your own energy, and it puts you in the driver's seat. cory: what are the newest technologies important to achieving these goals? evening solar is old but it is : new. you see a lot of excitement around them. the thing that always seems to work is economy of scale. we have seen it in solar and driven cost down in a large way. we're starting to see it in lithium-ion batteries. economies of scale, i'm a big believer. it is worth investing in new technologies, because we want to

take a long-term bets. cory: is this a story primarily ? for developed nations or third -- nations?s even: ethan it has to be a story for : both of we are going to think about climate change. the growth is coming from lesser developed countries. in a number of cases, the least developed cases pay the most for electricity and that's good news for renewables because that means renewables can be more cost competitive. cory: i'm thinking of putting rooftop panels on homes in tanzania. it is a trip what they are doing there, in hundreds of african homes that are no longer burning kerosene. ethan: beyond that, this tradition of solar lanterns. you can do that instead of earning a candle or burning something else in your house. that is all starting to happen. we've tracked about 100 million of these systems that will get distributed in the next year or

two. pico, as in super small. extra small. cory: i am all for it. go big or go home or go extra small. tune in tomorrow for more coverage of that clean energy. on thursday, we will talk to u.s. energy secretary. coming up next, with will video the more important than mobile? we will ask facebook why the company is betting on it. if you like bloomberg news, check us out on the radio. you can hear it on the bloomberg radio app and on station 119. "bloomberg west" continues next. ♪ >> the stop stories this hour,

the yen strengthens further in the last hour after boj board member calls the inflation target for the medium to long-term goal. the rate policy, saying it had a tightening, rather than easing effect. low, just a day after the prime minister the later tax increase until 2019. opec ministers prepare to meet indiana with speculation that saudi arabia is planning a deal within the cartel.

delegates say a production target scrapped from december may be on the table. but no formal proposal has been made. they are expected to show a decline. afterank has dipped alibaba revealed it is buying back its own stock. there is a plan to shore up its finances, and offer $400 million in shares to the alibaba partnership. and more to partnership in singapore. powered by over 2400 journalists in 150 bureaus around the world, latestet the greatest -- from the markets right now from david. david: we are watching stocks, let me start with the casinos here. a net gain on wednesday. 10%, we were

looking at about 8%. a little more than estimates here. -- 24 straight months we have seen declines there. let's look at carmakers over in japan. you are looking at two factors here, stronger yen compared to when trade started, and u.s. auto sales falling 6% in may. here we are, reopening for the session. we did see momentum, downward momentum pick up. a lot of that will depend on where the yen goes. 109 four -- for mr. sato. the yen was already outperforming, let me just end. can we flip the boards?

this is how asia looks. pulling downormers the overall index. southeast asia doing a little better. out, it ispan perhaps a broader, more accurate read about what is going on in asia this thursday. cory: quarter after quarter, facebook success has monetized mobile, creating billions in free cash flow. today, 79% of the company's revenue. everson sat down to ask if mobile would have an impact on traditional companies. carolyn: companies that have been around for a long time have to either acquire a disruptor to inject that into their system, have a venture fund that in it

or invest in a parallel organization or rewire their culture, which is the hardest thing to do. >> facebook has an open about its own struggle as the mobile dynamic shifted. how are you using that to do what you are saying there? convincing companies of the profound cultural change they need to undergo. carolyn we live this disruption : ourselves. when we went public we had no , mobile revenue and our mobile app was built on html five and it wasn't particularly good. so mark held a company all hands and declared we not only needed to be mobile first, but mobile best. that drove mobile change quickly. the team showed him a desktop mockup and he ended the meeting. until people came back in with mobile first, there was no

meetings with mark to do product reviews. and that sent a message quickly and we reach rained our engineers within weeks, and now, over 80% of our revenue is based on mobile. we went through this transition. mobile is not the only one we have gone through. we've seen visual communications take off which is why we acquired instagram. which now has 400 million people use it, 400,000 businesses aren't instagram. we acquired whatsapp and pulled messenger out and now have a -- one billion people on whatsapp because of the inflow of what we were seeing people communicating on business. we are constantly seeing consumer behavior evolving, and facebook today looks entirely different from facebook 2012. >> i have seen you say that as much as mobile has been a profound disruptor, live video could be even more of a disruptor going forward. tell us what you are looking at in terms of content and where you see video going. carolyn: we believe video can be

even more disruptive than mobile. on instagram we have had a 40% , increase in video consumption over the last six months. consumers love the format of telling stories through sight, sound and motion. onere exploring everything , product we launched his growing quickly, allowing businesses to communicate their story in everything from three seconds too much longer format. kleenex did a wonderful piece that allowed people to have emotional moments in their news feed, and perhaps they would need a kleenex for those moments. it was seen by and watched for over two minutes. typically, mobile is a different consuming factor and consumers will watch shorter forms with sound off. brands and marketers need to fundamentally rethink how they go to market with mobile video. cory: the facebook bp of global

marketing on bloomberg . alex specializes in platform and app development, and is the author of a new book, there it is. alex joins us right now. there is this thing in silicon valley. it is not enough to have a business or a nap, you have to have a platform. when you look at companies like , it is not just a car , how do youication explain it in your book? alex software alone is a : commodity. it is not enough to have a great mobile app. it's about having the underlying business model. what we have identified is that there is this business model

that is the biggest disruption or in the economic landscape of the 20th century. about,line was talking mobile is a disruptor, and there are many other things popping up. the thing underlying this disruption is the platforms. we talk about consumers these days but it is looking at producers and how do you harness this connection between independent third parties that are producing value like , driving a car for uber or posting a video to youtube or facebook and the platforms that , are accelerating that. apps are important but they are just one piece of the overall transaction. cory: it's interesting because not everything can be a platform. an app that solves a problem is an awesome thing to have. alex: it is about harnessing the broader ecosystem. it is about enabling someone producing value, for that value

to be consumed. you see companies like it youtube and uber, which just raised $3.5 million. alibaba facebook and whatsapp , are their own platforms. google, apple -- all the biggest tech companies today experience this business model. they have apps and websites and they are investing in vr and other types of hardware, but the underlying model they have is this platform business model. cory: you called this book "modern monopolies. when it showed up on my desk i --ught this knucklehead please explain to me why i'm a knucklehead and why i'm wrong. alex: i won't hold it against you. as more and more people read the book, they will understand our point of view on this.

of historical connotations monopolies standard oil, you own , the supply chain. you own all the assets you are enabling consumers to buy and consume from your business. platforms don't own their own supply chain. they have a network of independent producers. in the book we try to explain , how this business model is fundamentally different from linear business models and a lot of the old negative connotations associated with monopolies are not applicable anymore. carolyn was talking about gm getting into mobile or investing in other platform companies. we have seen platforms like lyft recently receive , investments. they are receiving investments from these linear entities and overtime, people will start to understand about this new business model is here, and

operates in a fundamentally different manner. cory: let me stop you there. a long time, you could not have cordless phones because ma bell controlled the technology with its monopoly. that's one of thousands of examples of things that could not happen because of that monopoly. doesn't the same notion of stifling innovation happen with monopolies whether it is facebook controlling social media or google controlling the e-commerce experience or increasingly amazon. it keeps innovation from happening. alex: it is a traditional argument that historically monopolies are bad because they stifle innovation over the long-term. the element that you see as you study these platforms and see their life spans and trajectories, for them to reach this modern monopoly status, it takes many years to get to that point. let's say 10, 15 years. cory: to your example of uber,

uber has come into existence since we have been doing this show and it's not even six years old. alex: uber raised another $3.5 billion today, but the people that benefit our drivers and customers. because the way they are going to work to shut out lyft, they losing one billion dollars a year in china because they are subsidizing value. everyone has to overcome the chicken and egg problem. they need more customers to get drivers, and vice versa. for the years they are in platform war mode, consumers and users, the users ultimately win. once they reach that monopoly status, then what you start to see is that, as caroline was talking about, there is another evolution of technology. there's mobile now but there will be vr in the future and these monopolies don't maintain that status for decades.

google search on the decline now. if they have not figured out android, they would be an much more precarious situation and they are today. cory: far more thoughtful stuff in this book. check it out. coming up, we sit down with the founders of a new venture capital firm that has no plans to chase down the new venture capital unicorn. ♪ cory: new venture capital firms

are a rare sight, new firms trying to rise above. but a new venture capital firm is trying to bump the narrative and raise $120 million, going small and not targeting the usual unicorns. the founders are joining me now. glad to have both of you here.

talk to me, let me start with you. what are you trying to do? guest: $120 million. $60 million per partner. we are at a very early stage. $120 million, we can stay the course. it is unlikely we will start with series b. cory: knowing that you have follow on to come. guest: the basic idea is we do between two and four companies per partner per year. if you look at that, it comes down to about $6 million per average. that allows us to do about 18 companies as a fund. it not a high velocity, but we go deep. cory: how long are you going to be in these investments? guest: historically, 60 plus investments, our average holding time has been 3.7 years. cory: you guys started doing

your own investments and just thought let's make it a business? guest: i worked at two firms, sequoia capital with excellent mentors there. but because we are at the point of origin at the early stage of company creation, we plan for a four to eight year time horizon. our goal is to be long-term partners for these companies. cory: do you feel you have industry expertise in certain areas? guest: it's one of the cornerstones of our practice. we've been founders of companies in the past. we have worked in startups for all of our adult lives. i was one of the cofounders of and he has founded software companies. guest: i founded a company and chip design and a company that was acquired by cadence.

the third company, magma, went public in 2001. after 9/11, there were four ipo's here and i was the founder in two of them. cory: there's a pretty unique focus in semi conductor design. guest: typically what has ended up happening is, since i've done 1998, 30 venture startups. all 30 are companies like groupon and in different areas of software. cory: geographically, you are in the bay area. why? guest: it's our home. it's one of the great crucibles of innovation and there is a density of talented and motivated people who want to make a difference. we are quite fortunate.

cory: founders still come here because of the infrastructure? guest: without question. i am constantly aware on the radio and on the show, every city is coming to us and they say we are the silicon valley of the northeast or the silicon valley of the middle east. guest: we have both invested in israel and india and there are pockets of places where they do innovation but nothing comes close to the valley and some of the newer areas like analytics. we are far ahead of the rest of the world. cory: thank you very much. coming up, houston, put mark zuckerberg on the line. facebook's first ever live stream with the international space station. how nasa has an out of this world social media strategy. ♪ cory: this edition of out of

this world, facebook hosts its first live event from space. ground control with mark zuckerberg. the astronauts to injured 49 miles above the earth. the questions were like what do you do for fun and what language do you speak to each other came from facebook users here on earth. >> it is the real experience of launching in a soyuz rocket and seeing the first orbit of planet earth, seeing the moonrise and sunrise. you cannot put into words how beautiful the planet is from up here. cory: nasa has had amazing efforts and successes in social media, and any company could take a lesson. you guys have done some powerful stuff in social media that has worked. what have you done and why have

you done it? guest: i think we are just sharing what's going on out there. we have these incredible images -- these incredible images incredible stories to tell about how we are exploring and looking at other planets and what going on in the universe and what is going on here on earth. being able to share that with the public is an incredible story to tell and we are able to connect in a way using social media that is successful. cory: the numbers are through the roof with your instagram stuff and facebook stuff, but does it reflect nasa's mission from large to small, from single events to hundreds of events to discover what is going on in the universe? guest: right now, social media is giving a voice to the many missions overshadowed by some of our larger programs. we are in this renaissance where

everyone can share the stories with their followers and people can be embedded into the science team investigating with the hubble telescope or the people building our next great telescope out there. cory: i think about when i was a kid and the apollo missions and watching that stuff on tv this , is the way media is consumed. reallylike nasa has captivated the imagination. your twitter account has more followers than beyonce or leonardo dicaprio. guest: we are studying stars of a different kind here. cory: come on, really? guest: when i was a kid, we have that wonderment -- what you want to be when you grow up? an astronaut. quite a few folks have that answer as a kid. being able to spark that in people who are adults and

inspiring the next generation of kids to want to go and explore and be a part of this, that is what social media connects with on a very visceral level. that we have this stunning, visually compelling imagery and why would we not want to connect out there any crowds have responded accordingly. cory: i would imagine there are lessons at every social media manager could take from your approach. do you think there is one that can be boiled down and be applied to every business out there? guest: definitely. not every business has a rocket ship or astronauts, but you do have fans out there forming a community around your product. if you don't tap into that, they are going to talk about you regardless. if we are able to connect in a way that lets the community come together and realize they are not alone, that really enables that conversation to happen and for everyone to be a part of it.

it might be a product or something going on, being able to bring people together is how you can use social media for maximum effect. cory: instagram, the final frontier. i can see it now. thank you very much we , appreciate it. time to find out who is having the best day ever. peter thiel. his lawsuit will not cost him his spot on the facebook board. sheryl sandberg said what he did on his own, not as a facebook member. we did not know about it. that does it for this episode of "bloomberg west." ♪

there is talk of a deal as oil ministers meet in the end. it will be discussed although iran says there is nothing in it for them. oil strengthening towards $50 a barrel. more pressure on japan as the bank of japan critics say 2% inflation target will be reached anytime soon. t