establishment of a contender who would have added experience to the ticket. appearsowa senator also to be dropping out of contention. politico reports the conservative star says she will still help trump, just from the senate. meantime, hillary clinton is expanding her college cost plans, proposing to eliminate public in-state tuition for students whose families make less than $125,000 a year. she also wants a three-month moratorium on federal student loan payments. those proposals may be an attempt to appeal to bernie sanders supporters. and president obama says u.s. withdrawal from afghanistan will slow down. unitednt obama: the states will maintain approximately 8400 troops in afghanistan until next year through the end of my administration. ramy: the president says

security in afghanistan remains precarious and the taliban is still a threat. " is next. west cory: i'm cory johnson, and this is "bloomberg west." arens of tech and media back in sun valley. we will see which deals could result. plus, another blow for apple. the technology giant suffering another lost in its biggest overseas market. we will find out what happened in china and who is taking a bite out of apple sales. and a deep dive in tech investing in china.

two all-star chinese tech investors join us for an in-depth conversation. first to our lead. forget winter, mergers are coming, or so said barry diller, who believes the consolidation is coming and also fears it will cause creativity to suffer. the executives among many attending the conference in sun .alley, idaho you have been killing it. i have been to this conference a couple of times. it is sort of amazing, the giant heads of business and media tech business who gather there. watched as folks came in yesterday and it is a broad swath of people, so you do have

executives from tech, entertainment, and media. they tend to mingle very organically. you do see folks talking, going to get coffee, and we on the outside are left wondering what they have in talking about, but a few of them are sharing what they have been thinking about, at least in broad terms. cory: we have pictures of everyone from michael eisner to .ack dorsey when these people gather, there is a lot of buzz in the air about a handful of deals that have been done. the business of providing content has never been hotter, but there's these looming giant epic moves here, not least of which what is going on with the redstone family. really fascinating. we were all waiting for sherry redstone to arrive last night.

we have not seen philippe dumond at all and nobody has confirmed for us that he is here in sun valley. sherry redstone, interestingly, has taken on a really outsized role here, again, just walking the grounds, i have seen her several times today, sometimes alone, going to get coffee. more often than not, with other people. we have seen her with bob eiger -- bob iger last night. les moonves gave her a ride on the way to dinner. we have not sinfully tomorrow -- we have not seen pheillipe dumont.

really, the viacom drama has been the biggest one here. these are powerful businesspeople in deed. you talked about the demeaning nature. i want to ask you about it a little bit. i do not know if it is demeaning, but reporters are separated from the people who actually do business. i don't think we should ever pretend that we are them and they are us, but there is a on wheredistance but reporters may gather but may not participate. david: yeah, you have seen the footage. there are places where we are allowed to film and shoot pictures, but that is very restricted. we are only allowed to approach without microphones and cameras on and it is a very runny dynamic. our colleague who covers him in a suggested it is like going to cover an nba game from outside the arena having no idea what is going on inside.

there were executives who wanted to come over and give us a sense of what they hoped to talk about . obviously, there are big macro issues weighing on all these industries. the recent brexit decision. when you hear about the program -- we do not have a look at the program even -- that is a lot of what they are talking about. the prime minister of canada was here this morning. we're expecting the president of argentina to be here as well. while they are all talking about their particular lines of work to each other, we are also hearing from global leaders as well. you will have the experience of sitting outside the bar while everyone else is drinking, hoping someone stumbles out. exactly. we of course do not have access to the bar. i know where it is, but that is about it. opportunity earlier

today to talk with sebastian and he was with , and weder of udacity talked about a recent story that a tesla model s killed its driver when the assisted driving feature was on, and i asked about that, given that he has put so much time and energy into automatic vehicles and also that he is a tesla driver as well. >> i am a tesla driver and i use the autopilot feature all the time. for me, it is a way to relieve stress in bumper-to-bumper traffic, but i do not take my eyes off the road, so i would surmise the chances of me running into a truck at high speed are probably small. going forward, it is, of course, extremely tragic that a person lost their life, and for me, i am personally saddened that an

autopilot feature was involved. numbersafety absolutely one. google's track record speaks for itself. we have actually been safer than human drivers. david: you have tesla looking at semiautonomous driving. google looking at fully autonomous. why was that direction the one you wanted to take? >> it's very ambitious, but it was our goal. to asset sales, having a person in the loop is tricky. we needed to be able to get to the point where you could push a button at some point, so we ofhed a metric interventions. to 300,000, 400,000, 500,000 miles. >> this is going to be a big year for ai.

when you look at a competitor to vr, which is the more mainstream? >> i think all are very exciting. i love vr in the classroom to in theds the ability to classroom go somewhere and see something as opposed to flip the pages of a book. super make our brains brains. it can remember everything, recognize anybody, list every experience you ever missed. it will turn us into better human beings in the tasks we do. for me, ai is a productivity enhancing thing we do to make humans more efficient, in the same way farming equipment made farmers more efficient. david: there is so much conversation about content, commoditization of content, who will be producing it. i imagine that extends to the

education space as well. >> i find it fascinating how content has evolved. when i was a child, very few people were allowed to do content but now we live in an age where everybody can, which means we have an enormous amount of content, so sorting to find quality content is important and the race to the bottom. we make content available free of charge so everyone can consume at their leisure. what we charge for is only certification and services. if you want feedback on your project, come to us. you all yourgive tuition back if you cannot find a job afterward. but i think the future of content will be interesting because you have to have a race to the bottom and it will get cheaper and cheaper at some point. >> the company is still a private company. do you think about taking a public?

>> i'm really happy that we are private. it takes away the stress from my brain. but i would like to achieve is basically grow the company a little bit more, maybe learn something new. like last month, we launched android and had a huge spike and then led to a flat period. cory: really appreciate it, david. founder was there, of course, but want to get to some headlines just crossing now. attorney general lynch saying hillary clinton will not face any charges as it relates to the e-mail investigation following the recommendation of fbi director james cory: -- james comey. all right, well, later this

hour, the world's largest vc market is still him is three to many global investors. want to pull back the curtain on the conversation on investing in china. stay with us. also, we will talk about the future of monetizing digital and mobile content. it matters because verizon is bidding on yahoo! we want to hear what he has to say next. this is bloomberg. ♪

valley,live shot of sun idaho, a place that is nicer than where almost all of us are

right now. beautiful sun valley, idaho. yahoo! put itself up for sale, starting an elaborate process that may be coming to an end. today is the deadline for the third round of bidding, which in theory could be leading to the decision of who could be buying parts of yahoo!. of course, thierry is one thing. practice is another, but one potential suitor, verizon. aol ceo tim armstrong is a big player in that deal. armstrong: basically, one thing that is nice to see is we have been heavy investors and content even when it was not popular, and content is the great differentiator and helps evil not have their businesses get commoditized. if you look at what happened in france and am guessing what will happen this week here, you will see a lot of silicon valley players investing in content, and it will really in that being

the future differentiator for all these platforms. i think we are at the early stages of the content era when it comes to mobile and online, and i'm excited about it. i think it is the right place for the industry to be and for us to be. shiftsave these seismic certainly in television to internet-based consumption of tv, material. you focus on monetizing that? how do you think it's going to go? armstrong: you will see people and when you look at things like virtual reality and augmented reality, we just bought a company working with the huffington post and the rest of our brands and when you see how that content can get brought to life, consumers are going to love it and also advertisers are going to love it.

there's $80 billion or $90 billion. they will switch from video, tv, two more online things and mobile platform over time, so you are at the early stage of another seismic shift besides the internet that is going to happen around video and it will be even better for consumers and advertisers over time. might be more expensive for advertisers, but better outcomes for everybody. david: i know you have been looking at ways to get around that, to gain a bigger foothold. what are they? facebook: google and are juggernauts at this point. they have done an excellent job executing. it's great to have competitors like that. it helps our game overall. on an been really focused open platform. part of the reason we did the verizon deal was to make sure we had differentiated data. we have 40,000 publisher

relationships to bring to the table. our standpoint is copying google and facebook with my get you anywhere because they are strong in their positions. and weition has to shift want to be the best company in the world that building brands. they are very good at social and search, but our business is about holding brands through media, through content, through advertising, and that is our core skill set. you are going to see us partner with some of the largest companies in the world and it is an exciting time because the shift happening in tv is starting to fuel the entire media business overall and their headsicking up. it is a very exciting time. i would again make an analogy to the beginning of the internet. our competitive advantage is the fact that we are in content and technology. cory: tim armstrong, the ceo of

aol. app for, the photo sending and deleting photos in conversations, says it will allow users to retain those in memories. alibaba is showing the world their new connected car. will it be able to take on tesla? gm, ford,ows, apple, honda? ♪

the european union has

approved its first rules on cyber security, or sing businesses to strengthen defenses and companies like google and amazon to report a tax. officials say cyber security incidents cost eu $300 billion every year. cbs plans to spin off its radio month.n this cbs is looking at options for the business. bloomberg estimates it could be worth as much as $3 billion. add revenue is falling even as listenership is expanding. cbs wrote on the value of all of its licenses last year. is joining the battle to control the automobile dashboard , unveiling what it calls the

first internet connected car. we took it for a ride to see if it will prove to be a major disruptor. >> alibaba says what they have done with this car is effectively put a computer on wheels. in fact, they will see it is going to be as disruptive as the first iphone. you have the app and you just click the unlock button. there we go. go for a ride. ok. the car knows we will be passing offered up theas option of ordering our coffee before we set off, so am going to say yes and order one of those. the car uses alibaba's operating

system, and they say it is always connected so you can use voice controls, book a parking space. it uses 4g, and they say this is basically using the car as a platform for the internet. as we set off, we ask the car to order us some coffee. we pull up and the coffee is already ready for us. .nd the car paid for us the voice control options are pretty extensive. you can turn up the air conditioning or the heating and also open the sunroof. there we go. open sunroof on a beautiful day. we have been on the road for a

couple of minutes and used the voice control to open the sunroof, turn on the air-conditioning, but we have come to the end of our journey, so we are going to book a partner -- book a parking space. alibaba says this is a fully connected car. what they mean is there is internet in here, but also it connects this car to other cars around it and when the infrastructure is in place to the towns and cities it is driving through, so it is really another internet-enabled device. tom: that was bloomberg's mckinley. coming up, we stay with tech in china. conversation on investing in china. that's next. and if you like bloomberg, check us out on the radio in boston, new york, d c, san francisco, and anywhere on the bloomberg , and app, bloomberg.com

serious x in station 119 -- xm stationius 119. ♪

ramy: you are watching "bloomberg west." let's begin with a tech of the first word news. loretta lynch says hillary clinton's e-mail investigation is being closed without criminal charges.

she announced the justice department decision today, one day after james comey recommended against prosecution. arey house republicans summoning him to capitol hill and he will testify tomorrow before the house oversight committee. the country's involvement in the us-led invasion in iraq is called a failure -- the report says that u.k. chose to take place in the invasion before other options had been exhausted. it criticizes intelligent services and the military. is declaring a three-day cease-fire for the entire country, coinciding with the final days of ramadan. ctv says the truce expires on friday. the justice department is asking a federal judge to stop the implementation of north carolina's bathroom law. lawmakers in the state made minor tweaks last week but kept the requirement that people use the bathroom of the gender on their birth certificate. global news, 24 hours a day. powered by our more than 2600 journalists, in more than 120 countries.

i am ramy inocencio. it is just after 6:30 p.m. here in new york. the allen has a look at markets in asia. good morning to you. paul: good morning. the new trading day is 30 minutes old in new zealand. stocks are looking pretty good. we are expecting gains here on the afx as well. although we are mixed on the nikkei. japanese bonds will be in focus today. the yield on the 20 are dropped below zero for the first time. still pouring into the haven assets of government bonds despite the negative yields. career will be keeping an eye on samsung electronics. expecting to see operating .ncome rise 7% to $6.4 billion sales are expected to rise 5%.

this is happening in an environment where mobile phone sales appear to be plateauing. so we are watching for any announcement from samsung. they are sitting on a very generous cash pile. on politics -- the australian election was a cliffhanger. the coalition and shay little bit closer to regaining power overnight, taking up two more seats. now with 72 seats. is 75.ic number so the prime minister is getting closer to keeping his job. that has some of what we are watching. id. paul allen. -- iam paul allen. ♪ >> this is "bloomberg west." this kicks off a night called

series a. the interesting thing about china, the conversation on china -- ready to beat floyd into a market that his complex. don't get it.ors we will help you understand what is going on with the inner workings of china. -- joins us now. glad to see you both here. we were talking in the break and i want to continue the conversation. when i came into this world when i was working with public companies in the bay area, i was focused on publicly traded companies. there were a lot of publicly traded companies post-olympics era that were junk. some of them were architected to be that. dozens of these companies. most of which collapsed since then.

at the same time, there were companies that have proven to be much bigger and more successful. you were saying that have i had invested in 1 -- >> anyone can start up. cory: instead i was shorting chinese security companies. which also did quite well. what we arebout seeing today, coming out of china, in terms of investable products? areell, first of all, there two worlds when it comes to public companies in china. there are the ones that go public on the u.s. exchange like the new york stock exchange, and there is a whole separate ecosystem around the domestic companies that go public. traditionally, venture backed tech companies, they could only go public in the u.s. , largely because the domestic market required different

requirements. you had to be profitable. u.s. --hink that on the probably the best tech companies, in general, they go public in the u.s. there are some dynamics that are changing that a little bit. but it typically is very choppy. , chinese1 ipo's companies, in 2015. in the first six months of this year it was zero until 51 talk went public. cory: so what do you think is different now? last 10 years, what you see is that the companies notwere shorting were growing as fast. and they resorted to certain tactics to engineer interesting growth. but over the last 10 years, the real story is growth in internet. alibaba.

the valuation today is 1000 x over a ten-year time. in a bold play, in a new economy, where internet enables you to up the efficiency of the system and build a consumer company in a short amount of time. cory: some of these names and ideas are new, how to use us out what can be real and what can't, when you look at the companies that are so young? well, the fundamental things that you look at are the same -- very similar, worldwide. same as the u.s. when you look at new startups. but i think that until 5-6 years ago, a lot of the chinese -- whens were peoplesoft, they would say it was the google of china. either way, it works.

>> right. but in the last five years because of the mobile market, innovation is starting to truly be cutting edge in china, as well. so there has been a shift. whatnk we would look at has succeeded around the world, make aor the u.s., and copycat company in china that does well. and i think the last five years, we are fundamentally looking for innovative companies, just the way silicon valley firms find a great deal. cory: you talk about getting into the big names early. do you look at the earliest stage of companies to invest? is it different than silicon valley? companieslook for that are an interesting market with growth that has a huge potential. and on a team, that has a lot of experience. you see that happening in china,

more and more. and you also see a team that can build a product that solves a real world problem. so market, team and product. that tends to be how we look at it. cory: i also think about the stage -- when do you want that? >> the earlier, the better. 10 years ago, we didn't see many entrepreneurs improving. over the last 10 years, we have had 400 or 500 companies that have gone public. that had a vp or a director have gone public now. i have also been adjusted with chinese companies. , that we haveion chinese entrepreneurs creating new ideas and not just the end , and also we have them looking at the u.s. and looking at tech companies.

i wonder what the appeal is of the u.s. tech companies to chinese companies that are looking here? >> i think it is largely strategic. 1930's, gm started to sell cars outside the u.s. citibank going global. probably in the 1970's and 1980's. in that sense, many of the they areompanies, andsting in u.s. companies want to see cutting-edge technology to bring it back to china. to starto, they want dabbling into global expansion. is,reat a market as china you see a lot more now. cory: you are saying that as much as they might be interested in technology, they would be more interested in a beachhead where they could have a sales

team and to know a company that they would sell their products to? teams, i was part of the that helped to recruit hugo barra. it was a collective team effort. he joined because he saw this interesting android product emerging that could be more than just a smart phone. it could be beyond just china. and the team, google or microsoft, they have the ability to shock. it is not just regional. we are both invested in a company, where it's most recent new mobile app -- cory: is this china-based? it is based in shanghai. it is the first time ever that a mobile app goes across a mobile platform. that wass something hard to imagine 5-10 years ago. cory: this is fascinating.

we will take a quick break here so we can watch my daughter -- it is hilarious. [laughter] cory: we have a lot more to talk about. and we want to talk about how business is done in china. it has always been an interesting thing for business people all over the world. we will get you that a little bit later on. and we're talking about china has evolved. and why do companies still struggle to catch the first foothold? tune in this weekend, we will bring you the best interviews from the week at the highlights from the conference with the best of "bloomberg west." this is bloomberg. ♪

cory: welcome back to "bloomberg west." a."re on "series david is here and hans tung. david, we talked about the are doinging that we and looking at acquisitions in the u.s. we have seen take multibillion-dollar deals. they go beyond hiring a local sales staff. that wees, i think talked earlier about access to technology and the fact that they want to grow globally. and i think there is also a factor where silicon valley is still very an attractive place to invest. and i think a lot of chinese companies, there is a lot a financial perspective and they realized that now that they have experienced their own tech

success, and they know what cutting edge is now, they actually have decent eyes to figure out what company they could make money. u.s. businesses are looking to do business in china, investing or beyond, the relationship with the government is so peculiar, in china, compared to anywhere else in the world. what is the relationship like today, in contrast to what it was 10 years ago? last 10-15 years, china's government has opened up a lot more. they're are more experience with investments on the internet side. a lot of government attention was on fixed asset investments. over the last few years as the economy has slowed down, internet growth has been more interesting. cory: why? hans: just in general, the last few years, growth has slowed down because you get to a point

where -- cory: why does that make tech more interesting to the government? hans: because tech growth at a faster pace. look at the e-commerce in china, it has grown by 35% a year as a sector. look at retail, it is growing at a single digit. when you see the number, it becomes obvious you should put more emphasis on tech. --y: anyone in the world more government attention is a good thing. with the chinese government's increased focus on technology, has it made investing in technology easier? >> from our standpoint? we definitely see the government play a role but not hindering us in any way. the number has grown in the last few years. uber. uber is expanding aggressively in china. the chinese government 10-20

years ago, with a have allowed that to happen? have a li na. but look at what is happening in china with the transportation industry standpoint. there are a lot of cars out there and you need more players to be in the market to provide sharing services. and uber enables us to do that. cory: it sounds like what you're saying is that government involvement is with investment matters? >> i would say you take japan as a good analog. in the 1950's, the minister of trade and finance had grips on everything. they were the ones telling toyota which countries to export next. and then the market force kicked haved these companies gotten bigger and more powerful, and on a global basis, i would say that government has lost more influence.

are not deep diving into those decisions. a classic case is 15 years ago, they told one of the telecom withnies, you must merge one of the state owned telecom companies. cory: which one is that? and the investors weren't treated all that well. but if you remember the case makes most of the wi-fi chips and china came up with their own encryption for the security piece that because that would hinder chinese laptop manufacturers to sell worldwide, they said no. and the government backed off. cory: a pivotal moment. >> so i think the progress is very similar to what japan or korea went through. cory: towards the point where government is forced to back off because companies are more

powerful. >> and they are more global. and the chinese government realizes that. cory: i'm not a big believer in journalism by personal anecdote innovatione that happening interestingly in the messaging space. where the kind of messaging happening in china is very different than what is happening in the rest of the world. i was stunned at the apple announcements around their new messaging over the new ios that looks so much like the messaging of some of the stuff we see in china? about that. in terms of what we are seeing with messaging in china, how it -- as stupid as it seems with emojis -- i have an emoji coach. >> years ago, use our messaging happening writing the iphone wave. in china, we cannot with -- and

it initially looked similar to the mobile at that with the third iteration, a "different. you can can buy stuff, use services, you can send global payments to a friend. as someone who just carries a phone with we chat, and 95% of merchants except my payment. because they have it too. and you don't see that with whatsapp. it is mind-boggling how it is happening in this space in china over the last few years. you know, 10 that is a very strategic partner to us, i don't want people to take is negatively but if you look at we chat, what they really did was see the phenomenon going in korea. actually, korea was the innovator on the messaging. first investor in the first round. and they invested in the third

round. and now, they are an $8 billion company. anduse they looked at that said oh, we shouldn't just be like whatsapp. we need all of the other features. and then we chat took off. in china. and that is a great example of a chinese company investing outside of china, and then really learning what works or what is the cutting edge. and bringing back features. is there something cultural about china that makes the messaging stuff so much more robust? in china? korea, you dod see this kind of issue with items, it is a powerful way. -- is another popular feature.

see userscompanies gifting each other. having said that, the argument is always that these companies cannot do things that are beyond these regions. so back to musically, it is a great example where you have american teenagers who love using it, it is not just a utility, it is a social network of its own. us, we will goh on to talk about investing in china. here, we willp get into that. this is bloomberg. ♪

cory: welcome back to "bloomberg west." and what we are calling "series a." what is the biggest mistake you see u.s. investors make when they try to get involved in china? >> 10 years ago, the first wave of ebay and amazon, and while amazon has done so so in china,

ebay's strategy was a failure. they would hire a us-based person to run the company in china. knowledge, the local it is really difficult. but u.s. companies still do this. they buy a company or an investment company in china. cory: they bring in a gringo to run it? >> you know, they don't have to be white. [laughter] but it is still very western centric. cory: what is the most common mistake you seek u.s. investors make? looking for something that is exactly a clone of the u.s. in china, it is very different. deep down, the operation will completely be different and needs a different mass-market approach. working with airbnb very

closely, it has been an interesting journey to help us to get through that. and companies that are e-commerce based can do better over time. better than amazon and ebay. be empowered to make decisions. thank you very much guys, we appreciate it. this does it for that addition of "bloomberg west." tune in tomorrow, we have patrick willis. a former pro bowler who is now working in technology. this is bloomberg. ♪

>> from our studios in new york, this is "charlie rose." good evening. with thethis evening latest development in the investigation into hillary clinton's e-mail use. in an announcement james comey recommended no charges be filed against hillary clinton. her practices as extremely careless. >> there is evidence that any reasonable pers