♪ >>we bring you all of our top interviews from the week. pokemon go was unleashed into the world. soaring,ntendo stocks and it led to fans with injuries. we will what it is about. the biggest technology ipo of the year. the japanese company line debuts this year. transitrime day's

second coming. this online the net is out with the biggest sale day ever for amazon. we discussed where they go from here. to our lead, augmented reality has come to the masses. headlines were dominated by pokemon go from nintendo. it caught fans by storm. bloomberg west took a look at what all the craze is about. >> users are playing in the delivery room, restroom, even on the freeway. they are catching pokemon. boostdo got a $7 billion from the latest in augmented reality. it is the top app on the u.s. app store. tender,ating out rivaling twitter user numbers on android, and beating instagram

in time spent. players chase mythical creatures, pokemon, in real world surroundings using their smartphones. it uses the camera on your phone and gps technology to detect where you are standing physically in the real world. it makes pokemon virtually appear around you. it was built by a google spinoff, putting -- building on cutting edge mapping technology. it is the biggest game since nintendo started trading 33 years ago. the question is, can pokemon keep up the momentum and restore nintendo's former glory? emily: let's start with you. you are one of the foremost experts on augmented reality in this country. you are close to people who work on this technology. you have an application that works with 3-d technology.

>> it is phenomenal. uses augmentedo reality applications, this is big, big, big. the --we were walking by in san francisco. everyone was looking at their funds. i am pretty sure they are all playing this game. >> it is interesting how social this game is. it has a number of features that are important. the popularization of augmented reality is a large part of this story. there is a sense in which this game is a real-world social network. if you look at the video just before this, they show flirting happening in the course of playing the game in the real world. that is brilliant, the way they have incorporated mapping data that seems to come from google and a lot of really interesting chasing and finding of cool things, and meeting people in

the process. emily: how does the technology actually work? >> it is cool. it uses your location together with other sensors on the phone such as gyroscopes and the camera. it quits virtual characters in the real world. you have to find them and collect them. emily: do you have concerns about potential safety issues? the legal issues if you wander onto private property? >> absolutely. i saw stories of people getting into accidents this morning. it is just people getting extremely excited, just like you should not text and drive. you should not collect pokemon and drive. emily: it is not technologies far. you think at a certain point there could be new rules? they remind you the game to be aware of your surroundings. the tesla manual also says do

not take your hands off the steering wheel. you cannot be sure how these systems get incorporated into the real world. i think it is brilliant like 24-year-olds like your production assistant who escorted me down, he told me when he was seven he played pokemon. now he played it all weekend again. this is going back to the millennial childhood. they are flocking to it. emily: i had fun. i do not see myself spending hours doing this. for my ownrned safety, running into other people. i know you are close to people in the gaming community. the are the implications of success we have seen here for the rest of the community? drive anything that is coming right now, we are seeing phenomenal success on the smartphone. isyou can imagine, everybody tilting the next generation of

devices. this is insane validation or everyone working in this field. emily: what could this actually mean for nintendo, knowing that driven such a hit business and you need to moping -- maintain momentum? >> having the game direct people into coffee shops or retail stores, that is smart. that is a good kind of sponsorship. i think the impact will be bigger on perception of augmented reality and people understanding what that slightly dweeby sounding term actually means. i think that will be bigger than the impact on nintendo. experts -- this is like a dream come true. rusu: thank you to radu ceo of fusion. the biggest tech ipo of 2016. the japanese messaging at plans

to take on facebook. this is bloomberg. ♪

emily: the japanese messaging application line is giving new hope. shares spiked in the debut. despite being little-known in the u.s., it now boasts 218 million active users monthly, most of them in asia. ceoaught up with the line after thursday's u.s. debut. take a listen. i amrst of all, obviously, very happy. we are very happy with the initial response from investors. time we are going to focus on investing to expand our services. >> investing. you are the numbers man.

tell us where that investment is going to go. core will be focusing on countries, japan, thailand, and indonesia. forill use money strengthening -- is looking atrest investment opportunity for technology companies. >> what might that look like? when you say more investment in countries that are growing two or three times in some places. what kind of investment are we talking, acquisitions, organic growth? -- we are making pathways to -- leaders in each different areas. how about the u.s. here, how

important will this market be? it is still a small part of your business. >> the u.s. market is our dream. especially in terms of smartphone optimized service, completing our service, we are expecting another chance at the u.s. market. isly: what sets them apart that it has expanded into new businesses and verticals, from payment and merchandise to write healing -- ride hailing. digital stickers are big business in asia. bloomberg explains. brown. these critters are coming for america as japan hit messaging service line makes a debut. stickers are a crazed in asia

that is just heating up in the u.s. stickers, often as much as two dollars per pack. 10much as one in every messages on its platform is a sticker. apple, facebook, and snapchat are playing .atch-up while u.s. companies do not charge for stickers yet, many think it is inevitable that they will. take for example the kim kardashian sticker application, is set to take in $2.8 million in revenue this year. worries the u.s. may be a little too late to the game. usagetop -- saw sticker people in 2014. mine is expecting to crack open new markets around the world to

keep the sticker economy on fire. emily: joining me is randy nelson, analyst at sensor tower. can you quantify how big the sticker economy is in the u.s. and globally? randy: like you mentioned, the sticker economy is in the infancy in the u.s. we saw facebook messenger and snapchat start to implement them. it is nothing like it is in asia right now. emily: how big is it in asia? : we are nearing that tens of millions of stickers are being sent, even in place of messages themselves. emily: how much does the average sticker cost? randy: the application comes with preset stickers to get you into the ecosystem. it gets you stuck in there. it gets you to start using them. you might notice your favorite

celebrities are represented in the apps. when you find out that these are one dollar per pack or two dollars per pack. there is a collectible asset --aspect to it. emily: facebook, whatsapp, messenger, where should we be in some of these u.s.-based applications for the sticker economy to grow? up to line has catching do in terms of u.s. user base. i message is one place where apple will be pushing this thing heavily. emily: our interview with randy nelson of sensor tower. out of that unveils a new product. how nasa is making use of google's artificial intelligence. under the microscope, we explore

the world of an ultrasecret product being developed in the shadows. this is bloomberg. ♪

emily: one month after the nest cofounder and ceo step down, alphabet has released their latest product. it is similar to the classic camera. it comes with a weatherproof case meant for the outdoors. it can detect if there is a person approaching the house or a car driving by. if it is a person, you get an alert on your phone. we spoke with the nest had of hardware products the day of the announcement. >> it is cutting edge ai. we have turned something that is complexh and and very into something fixed -- customers can expect every day. we will be able to tell exactly

when someone is seen by the camera, not just that something happened in front of the camera, but that a person was detected. it happens automatically. there is no learning, it just happens as soon as you are is a traitor. pushll automatically notifications to your phone. it will tell you, we think there is a person, or we know there is a person. if you think about it, if you have a camera to protect your home, that means you will be able to cut through the noise and really respond to the once -- ones that are useful to you. you build this without being able to tap into google's deep resources in artificial intelligence? >> this is a great example of nest and google working close

together. beste is the -- we had the camera on the market. both must be alphabet companies means we were able to deliver this to our customers. it would have been difficult without google. >> what has life men like since tony left? >> he left a little more than a month ago. it is difficult to say what life will be like without him. since -- started, he has been setting up and learning about how we do things and why we do things. he has been shown to us and pushing us to think about things out-of-the-box to get us to the next stage. emily: how involved was tony with this particular before he left? off?u think nest is better >> he was very involved with

this product. he was a driving force behind it. the original idea came from the engineering and product team who came to the table a year ago and bring tothink we can market a product our customers will love. we believe we can do it in less than a year, which is very aggressive if you think about a new hardware product. emily: last question, there has been criticism about how slowly and asked products have ruled products have ruled out -- rolled out. will we see more products more quickly? revamped ourwe entire product portfolio. year, we are

introducing our fourth product. we have been putting a lot of emphasis on software and services. emily: that was the head of hardware products at best, maxime veron. we will explore the world of ambitious, ultra-secretive products, and whether they can change the world in our investing roundtable series a. check us out on the radio, you can listen to us on bloomberg.com and sirius xm. this is bloomberg. ♪

emily: welcome back to the "best of bloomberg west." i am emily chang. it is time for series a, our weekly roundtable where we explore themes in tech investing. we hear a lot about moonshots, but what do we really know? they are in development for years, veiled in secrecy, the

hyperloop. what does it take to find them -- fund them? which will breakthrough in our lifetime? with men who make early investments in twitch among others. why invest in moonshots? >> they can change the world and make the world a better place. they can change behaviors and make lives better. they can solve intractable problems of humanity, which is like, why would you not want that? when i was thinking about on the way here is last week we had a rough week in our country. for thoseonshots kinds of problems. emily: is the goal social progress? is it making money?

is it making life easier? >> the goal is to inspire. so much innovation is incremental. moonshots push the boundary a little further. i don't think the immediate goal should be profit. i think it should be thinking beyond the current paradigm and collaborating in new ways, and hopefully building new communities. they: our large copies with pockets better places to do this because they have the resources, or small companies as they can be focused on a specific issue with more expertise? >> i will give the self-serving answer first. no. [laughter] whereare examples companies have taken huge risks internally, google, but it is as ato think long-term large company. we can find these and step back

from the present need to protect corporate interests and look into the future. we dream what is possible. there will always be, i believe, and people can disagree, these will always be robust startups, the elon musks of the world. emily: you are involved in several moonshots project at autodesk. i want to talk about the synthetic human genome project. >> with atarted conversation last year. it was incredible project to synthesize the yeast genome. it will be completed shortly. we were thinking what do we do next? they want to be more complex genome. i said you should probably take a lesson from history into the human genome. it brings in all humanity. emily: you are a software

company. is software. the tools that we use are all software-based. there is a close correlation between the software we use and computers and being able to design genomes of living things. emily: we were talking about this earlier. dna could be used for coding? >> you can code any digital information in dna. in your single cell body of six gigabytes of code. emily: how does that work? >> it is a base by base translation. you map a cross those codes. it is really high density. dna lasts for millions of years when it is properly stored. emily: you are smiling. >> i have heard of using this to

solve very hard machine learning problems. if you think about the way that the mind works, and the many could beilt and there very cool. i don't know if it is workable. the idea of that, of using something from our bodies to solve these hard problems feels viable. emily: i wonder about timing and how important that is. my guess is so many of these are so difficult that you have to decide, do we continue to work on this? is this really possible? is this really worth it? >> it turns out to be the critical factor in our business. the general idea of who is going to solve which problem, given the fullness of time most of any problem we dream up we can solve. we can send someone to mars. we will solve these human problems. willll have web van, food

be delivered on demand from your smartphone. it just needs a little more time. emily: what about public acceptance? how important is that. they sold it in part because th e public was scared. >> that is part of timing. whether the public will accept it. is the technology ready? with the regulatory regime catch up to it? most of technology, most of the progress can happen. is the timing right for us to take advantage of it? that goes to the reward part. emily: what about these one time cures for cancer? i don't know how you put a price on that. i don't think you can, but at the same time are returns important? >> absolutely. the business model must sustain

exponential growth or it will not work. emily: are these creating new business models? >> that is the beautiful part about it. we all know computing, the cost of computing goes down. must-- most people don't realize the cost of writing dna goes down. that is why the project is being started now. we can write human genomes in about 10 years at an affordable price. samef we can use that technology to do something a little more simple, make a medicine to kill a cancer cell we can do it so cheap that we don't have to make in mass-market. we can custom design on computer a medicine for a single person, print it on demand. blockbuster the model of drug development more of a netflix subscription model. emily: so many it seems like the cutting-edge of cancer technologies and cancer cures if you will are extremely expensive .

nobody can afford it. what is the new business model? person atdrug for one a time. there are no clinical trials for those. it is always specific list of the next person to come along benefits from all of the experience of the last person. >> just a word on that, these ideas at first are very expensive and available to only the elite. that tends to be the time the don't work well. once they become mainstream the price comes down radically. think about cell phones, thing about the internet. the started out it only certain researchers in a lab could get access. but the nickel mainstream and people -- they go mainstream and people can have them. emily: we talk about trading cheaper blood tests and genetic screening. where do you see the potential for the most seismic shifts in moonshot technologies? >> that is a tricky one.

>> i have been working, i know the cost changes the game in som any -- so many areas. there is a real moonshot hardware project will just build first-generation printers. the earlybig part of work in the human genome project. when we have that is a game changer. it will empower the data storage. it will empower the virus work we are doing now. it will power the design of new creatures. that to me from the things i have been really keeping an eye out for. >> the biggest game we can get has to be in health sciences. when we effectively can design micro and target treatments to the specific areas we can cure diseases and live longer. that has to be the area.

it is more andrew's world than mine. how i was betting on technology to make the world radically different, i think it is in that area. emily: we do a lightning round now. these moonshot winners or losers? flying cars? >> in the fullness of time, winner. >> we are seeing drones that can carry people around. emily: i think you will be possible on all of these. permanent human settlement on mars. >> absolute possible. >> yeah. emily: quantum computing chips? >> yes, but i don't know that that technology will win. >> i am not deep enough into the semiconductor technology. but biology works with quantum chemistry. emily: hyperloop? >> same critique. i don't know that is the best way to transport people. emily: really? what could be better?

>> airplanes, i don't know. i have been watching it closely. anything that you can do the math on and come up with a solution could work. emily: immortality? you both have some close experience with that. ethan, your father thinks immortality is possible in our lifetime. do you agree? >> i think it is possible. the question is, are people willing to embrace it? >> i don't think these bodies last forever but as we have a moment with our memories, then we start getting a little closer. the jury is still out. i don't think these bodies last forever. if we canr memories, extract them and manipulate them, and that is coming pretty close. coming up, language

aiming to x on a huge market. we had to berlin.

emily: now to duolingo, capitalizing on a huge market. it counts over 110 million users worldwide. caroline hyde caught up with the ceo in berlin and asked about the challenges of scaling so quickly. >> one of the challenges is keeping the servers up most of hopefully it will continue to work well. caroline: are there any regions you want to focus on at the moment? any areas you feel -- we haven't discussed the chinese, for example. >> we do not do that yet. but that one is not -- even now quite a number of people are

learning chinese in terms of in the world, learning chinese is not a big like learning english. the big one is learning english for chinese speakers. we have an app for that. concentrate right now, our biggest market of the u.s. and latin america. then europe, this is why i'm in berlin. we are trying to grow more in europe. about 30% of our traffic is in europe. we feel like it should be more about 40%. caroline: are you optimistic about the growth potential in europe at the moment? the u.k.king about exiting from the eu and the economic situation at the moment. are there any concerns that you have? luis: i am optimistic about people learning languages in the u.k. we saw people learning other languages over the last couple of weeks. needoptimistic about the

to learn languages. there are so many country speaking different languages close to each other. it is very different compared to the united states. in the united states a language is a hobby, learning a language is a hobby. other people needed much more. caroline: what about talent? this is an ongoing resource when building technology. is it something you had to square off how you managed to find the best coders and developers? out prettys worked well. the fact we are a mission driven company, our mission is to educate. that helps us quite a bit. we are able to get better talent that would have if we didn't have the mission. one of the problems we have, with some people working in spain who like to get a u.s. visa. we haven't been able to get them one. that has been a problem. caroline: can you speak to anyone about that?

is that what you would call on to the next president? luis: i would love that. this is the type of thing when duolingoly presented to obama a while ago we asked vicki more pieces. this is something most politicians want to fix but it never gets fixed. caroline: you have one candidate wants to build walls and stop people from coming in. is that a real concern? luis: that is a real concern. we are language learning company. 50% of our people are from countries not in the united states. people, in the office are quite concerned about that. caroline: talk to me about the funding environment. this is your third business. have people been knocking at your door? luis: fortunately, most of the

time we've had people knocking at our door. 83 millionsed dollars, the last round was from google. we have been very fortunate. it is an interesting company to missionn because we are driven. as opposed to many of the companies where the goal seems to be to make a lot of money, in this case only get investors i make it clear that for one it will remain free. that has been an interesting to see who backs out of that and who continues. fortunately, once a we have are all very supportive of that. that was in berlin. coming up, amazon's biggest sales they ever. days that fell in the followed. what is the take away for investors? ♪

emily: how to amazon prime day. a hot seller was the fire tv, the best-selling gadget that help them triple last year's prime day sales of in-home devices. editor atur bloomberg large cory johnson us to break down all the numbers. > i think the results were in line with expectations. a 60%, they said it was three for third party sales. they always give you these puzzles that of the puppet about a billion dollars in total gross sales, something like that. a year ago it was 400 million. that was roughly in line with our expectations. the stock has been running up. expectation already there. it only moved half a percent that tells you it was as expected.

emily: why such a gap between what the third-party advisers were saying and what amazon is saying? some of it has to do the third-party access. they couldn't see a lot of the traffic. story, i separate think this shows us our ability to. to amazon is quite limited. could it be because the devices and things that were sold were amazon specific products like the echo? >> this echo, how many do you have? >> i own one. emily: people have multiple? >> i think they do. >> or more, actually. >> i think they have a runaway hit on their hands. this will get smaller and more functional. i think it will lead to about incremental sales of other devices. why would be one reason

third-party sources had no idea what was happening. the other was that the really only track third-party sales. they don't go with amazon's own direct sales. >> they don't measure it very well. the emphasis on amazon stuff was an important part. it's skewed the numbers and also shows you how their building the ecosystem around amazon stuff. one of the important features just added to echo was the ability to shout into another room from the refrigerator i need milk, tomatoes, whatever. amazon will deliver it. emily: customers purchased on average one alexa exclusive deal using their voice per ticket -- per second. >> it is amazing. also, it is not just the sales it is the number of new prime customers they bring on. we know this that the company

has hinted at it. the longer people are with they are. more loyal one way to do that is to spend $100 a year to get this expedited shipping and access to things like free videos. what we don't know was how many new prime members they got. anything that gets them into the program and keeps them there they will buy more and more frequently. emily: the average length of the membership now is seven years which i assume will only get longer. >> of course. that shows you why they're billion on amazon video. they want to hook people with this and get in and stay in a not be somewhere else. more and more retail experience will happen within the amazon tent. emily: where might you poke some holes in this? there is information that we don't have. given that this is the second year, you benefit from everything they learned in the first year. there is an interesting number

of hammocks. maybe they learned last it was popular in july. >> you could say there were aggressive price offers yesterday. 30% or 50% savings on consumer electronics. so it is possible you could see a negative margin surprise. that is one thing to look at. are imported. just as important are these new prime numbers. that they'res extremely loyal and spend a lot. they want to bring those people in. >> you don't poke a hole in a hammock. [laughter] about mark, we heard amazon echo in our technology summit. he believed that amazon has laped all the technologies in ai. you cover google and facebook, how do you think amazon is positioned compared to the other

tech giants? position?n a unique a venture capitalist things that could hit a trillion dollar market cap. expert it is hard to say and in that would be better than what they said. with davidthat i was yesterday the head of the amazon devices. are trying to make a ubiquitous platform. they're going after google and siri. an open platform bust of this will be a the amazon thesis. emily: what about the kindle? is that still as important? mark: they did get some data points on that. i and a proud owner of multiple kindles. that is a device that give them

confidence that they can sell these devices at cost or profit because they are the ultimate cross seller. guess how many more books you're going to buy. is trying to reduce friction. give someone a device of them carry around 24/7. you can speak out to the device or echo device. that is what -- that is the magic behind the strategy. unlike google, google cannot cross sell things. but amazon isn, the ultimate cross seller. cory: you can to be marketing approach differ. when a large the fire phone with fanfare, a total face plant. launched in silence and had tremendous success. their brave enough to try new things but maybe a little more cautious before they leap. emily: coming up next earnings report what will you be watching for? i take a margin trend,

different point of view. i think they're showing a real ability to generate lots of cash flow. the story of amazon over the last 24 months has been ramping rising cash flow. i think both, but free cash flow. ansaw the last two years acceleration in retail growth due to prime and the rollout of more third-party sellers. we're just starting to see the international market in europe and japan. they are seeing really good traction in india. is next growth of the stock international retail. emily: how formidable a competitor is alibaba? everywhere else? mark: there is no game for alibaba outside of china. that does it for this

edition of the best of bloomberg west. we bring you the latest in tech throughout the week. tune in with our exclusive interview. ♪

>> we're in new york. >> the power of facebook live. the realignment of the american political parties. >> all that is ahead on bloomberg businessweek. ♪ with the are here editor bloomberg businessweek. when your opening remarks the reporter argues that brexit will not stop globalization. we are seeing is trade ties deepening. >> the argument is that