♪ emily: this is the "best of bloomberg west." the end of yahoo! as we know it, we will hear from the ceo, melissa meyer. verizon is beating out the other suitors for yahoo!. facebook blows past second-quarter earnings estimates thank to a surge in molar -- in mobile ads.

first, to our lead from it is the end of the road and the start of a new chapter. verizon will by yahoo!'s core business for $4.8 billion in cash. at&t and dan gilbert did not make the cut and the deal ends the turnaround efforts of melissa meyer. now.s staying on for we spoke with her right after the deal was announced and asked what verizon could do for yahoo! that yahoo! could not do independently. >> i think there is tremendous scale that comes together from all of the different assets they have been investing in and overall, one of the big challenges is we have reinvented our product and try to make new yahoo! mail perfect for the phone, very proud of where yahoo! mail is at today. the same thing is true for news,

weather, sports, finance. we have cornerstone applications that when users use them, they engage with them and love them every single day. tremendousizon has distribution and that is one area we are excited about. overall i think it represents a huge amount of scale and opportunity for verizon. emily: what rolled you envision for yourself in this new entity? melissa: for the immediate future the transaction will .lose in q1 next year i will see the transaction through the close and watch the assets andr asian equities we have their. moving forward, we will ultimately figure it out. it is unlike a one-on-one acquisition where you spend a lot of time doing the process.

andill sit down with marnie tim at verizon and desire the integration plans. it is important to see yahoo! into the next chapter. emily: you came here with so much possibility and so much hope. how do you personally feel about the outcome? melissa: i feel very good about it. i think yahoo! is a company that changed the world and not many companies get to change the world. before yahoo!, the internet was a government research project. it really humanized the web and one of the reasons all of us have e-mail accounts. it popularized search and real-time media and that is amazing. to me, it was, how do we take all of those historical ments and influences and harness that in the paradigm shift to mobile. if you look at where the

business is, we are proud of our products in the way we transitioned our users. we have more than a billion users each month and 600 million are through mobile, that has tripled over the past four years , a large part we think because of the quality of the products and the investments we have made. to take this incredibly powerful transformational company that has changed the world and help see it into this new era is isortant and the transaction not just about the strategic feature for yahoo!, but also unlocking value for our shareholders in the remaining equity stakes. this is an opportunity to kill two birds with one stone and we feel we achieved that. emily: do you think having an active investor made your job harder? melissa: i think the company has had various active agendas around it over the past few

years. i think you should always be scrutinyhallenge and and i think there are elements that become more of a distraction, but the challenge of the scrutiny is not something i wouldn't shy away from. emily: there's a lot of scrutiny. melissa: i think you have to be able to stay focused through it and i could not be prouder with how the teams have executed through this period of uncertainty that has been around the should review process we have been in. we have exceeded our goals for the first half of the year and we will keep that momentum going. emily: you had said come if you had three more years that you would turn this company around and do what you are, what to do. do you think you could have done more? melissa: i think we see the path

to growth and i think that path gets accelerated with verizon. i do think that we will get yahoo! back to growth on the revenue side and we have continued to grown on the user side, it is up 50% with the mobile base tripling. we have a large legacy business that has been declining. i am proud of the growth we have had. grew them to $1.6 million in revenue to basically nothing and i am proud of that. keep -- keepll growing and i am excited that verizon is a great acceleration to the effort. emily: what do you really want to do next? ceo you be a public company again, do you want to start something of your own? a being involved

in companies that get the privilege of changing the world. i got that at google, i got that here again at yahoo! and i love all phases of companies. i was at google from tens of hundreds -- i managed of thousands and i love all phases of companies and i love the effort and eight energy and the hard work required. that is exciting to me. it is really about the rare privilege of being able to be part of a company that gets to transform culture and people's lives. emily: in this job he became a mom. your decisions around parenting were highly scrutinized. that is such a big a competent, how has motherhood changed you and changed the way you lead and

your approach to business? melissa: i think you learn so much about yourself and having children. my children are amazing. motherhood is incredible. you learn a lot about yourself. i learned that i had quality time with my kids, but i love to work. i love to talk with them and have an impact. my parents are visiting this weekend they had to laugh because yesterday my son came up and we were making dinner plants and he said, you will go and do your board call and i will go and kick the ball and then we will have dinner. silly that my three and a half-year-old knows what a board call is. been a blended lifestyle. i get quality time with them and watch them grow and learn.

my background was artificial , so to watch your own children learn is incredible. love toearned that i work and have a big impact and have that base to grow on and to bond with them. it is important to me to keep going. i think being able to come up with a blended working style that incorporates them and allows me to prioritize has been important. emily: our conversation with yahoo! ceo melissa mayer. was $4.8 billion a steal, we will focus on what verizon gets out of this deal with the ceo.dent and all fingers point to russia and the gop hack attack. we will hear from the director of cyber security and policy. ♪

emily: now back to the deal that kicked off the we, verizon's purchase of yahoos's operating business. >> one thing that monty and i has done as collectively come up with large-scale goals for the company and we want to be competitive in the next generation of how digital is taking over the world from consumer media. 2020 goalsa set of and a main goal is to get the 2 billion consumers. the yahoo! brand is excellent and the team is excellent and it fits into the larger strategy that verizon has. from our standpoint, if you look at what we announced 12 months ago on the original deal to what is an ounce today, you will see

straight focus and strategy focus overall. >> this is not a big surprise, as a likely this -- where this was going, but yahoo! has been in decline and losing money. how quickly can you turn that around by putting it together with aol and other verizon assets? >> it will take a lot of work and we have confidence in the leadership in him and his team and the talent at yahoo!. we understand it will take work to integrate, but we are confident they are bronze -- rants that people -- they are brands that people love. we have a number of assets across verizon that will strengthen the business. it is hard work putting two companies together we have the right talent and leadership to make that happen. >> can you be more specific? you actually identify the

assets that verizon has that can make a job at yahoo! that others could not. >> first and foremost, if you start with product technology. when we bought a allelic was about tim and his talent and the ad tech capabilities. that wehad great brands were not as still where we needed to be. yahoo! gives us a scale that takes us out of the millions and into the billions. investing inbeen content across verizon, just from licensing linear complex -- content into ownership. we are building our own digital channels and made an investment in optimists tv and in mobile which is important and how we scale the business. our goal is to take the content assets and bring them across the digital platform and bring more people to our platform and make the wheel spin.

>> it was a popular believe that melissa mayer would no longer be part of yahoo! in any capacity after the court business was sold and we got a headline crossing that says for her, she is planning to stay. who is running what and who has what job? >> this process was a bit different. tim and lowell and all of the management team were working side-by-side to talk who will lead. we were doing that before the deal closed, because it is an auction, we did not have the ability to talk freely about those things because there were competitive bids and 10 and i will be in the bay area with marissa and her -- melissa and her team at talk about integration plans. we will come back to you and talk to you about who is and what leadership roles. for verizon, tim will leave the integration for us and we will --k closely with marissa

melissa and her team and make sure we have the best integration. >> most deals fail because of a culture clash, because they do not get integrated. yahoo! from -- comes from a silicon valley culture, versus verizon that is east coast. --i would update everyone on we have a huge presence in silicon valley and i started my career working for paul allen .nd the cofounder of microsoft that is when the west coast started to take off for consumer internet and i spent my time shuttling between new york and california. i think we are uniquely positioned as a company and a management team to understand both coasts. we call it culture in code at aol in the real culture of new york mixed with the culture -- the code of silicon valley will .ake us successful

uc los angeles popping up in the work in new york and london and paris. i was at this attack -- i was at vivitech. i think what you are doing is bringing the culture and code together and we are the best positioned company to do that. emily: that was the executive vice president and president of product innovation at verizon and the ceo of aol. investors cannot get enough of facebook, we will dig into the blow away quarter and hear from sheryl sandberg herself. we are focused on the explosion of interest in health tech with two longtime investors. this is bloomberg. ♪

♪ emily: facebook out with

earnings this week. they got a big list from what mark zuckerberg called the golden age of online video. i stop -- i spoke with sheryl sandberg about continued engagement on facebook. of video on the platform is great for our business. if you talk about new format, a lot of them are video, live and recorded, but also 360 pictures. all of these formats are engaging acreage of adding to matrix emily:. facebook now has over 1.7 billion users, two thirds of them use it every single day. i spoke with harry cartman, ceo of cargo. >> facebook has done an incredible job getting the entire world on its what form. if you look at advertisers, they are following where the people

are. when you look at the ads on facebook. they are less brand advertising and more apt install ads. facebook has done an incredible job getting people on their platform. emily: you think the app install as are a weakness? harry: i call it the cocaine of the advertising world. if you are a startup and venture funded and you need to get people on your platform, facebook is one of the best ways to get those people to install those apps on their phone. emily: that is why we see a lot of ads for lips and food -- for list and food delivery services. go and getnew way to packaged goods to be delivered to your home -- there needs to be a way to get those services out and facebook has been the stalls onor in

phones. i think it is a question if brand advertisers will make the migration to facebook versus traditional places where they advertise, typically on great editorial properties that have a voice, like bloomberg. added $2 million to revenue, do you think there is a problem here? >> it is going to be difficult for facebook to continue with the explosive growth they have had. given the fact they are continuously able to grow their signal the numbers fact that they have a skill in keeping and attacking -- attracting users. the fact their ad revenue continues to grow at this time is also significant and speaks to the investments they have made in mobile and video and measurement. i think another interesting note is the activity that brands are now creating around messenger.

the fact that they are willing to create chat bot experiences speak to the fact they see that platform as an extension, potential extension of their brand. emily: when it comes to messenger and what that, i asked sheryl sandberg about monetization and she said those are coming. listen to what she had to say about messenger specifically. oute are not breaking instagram, but facebook is the main driver of revenue growth and instagram is making a real contribution and we are excited about instagram. we announced earlier this year, 200,000 active advertisers. 75% advertising the u.s. between facebook and instagram we have the two most important mobile app platforms and that is why we see strong growth. emily: now let's hear what she had to see -- say about messenger and whatsapp. sheryl: in messenger we are looking at the organic activity

that is happening between businesses and advertisers. we are happy to see we have one billion messages being sent per month between businesses and people and almost all organic activity. we are doing very early testing to see how we can monetize and drive engagements between business and consumers. right now it is organic activity we are looking for. emily: you are worried about the overreliance on app install ads. they have turned on -- they have not even turned on the firehose. does messenger and whatsapp hold huge potential? harry: i think they spend $30 billion on whatsapp. emily: $20 billion, but it is a lot. harry: when you look at asia and wiichat.

commerceore and more taking place on messengers platforms. those functions spread in the united states and people start using chat and messenger to do transactions. if they can be there in the platform at the time of transaction and bring advertising into the platform, that will be an interesting growth area for them. it will be a different game and different set of advertisers in their. because they own the platforms and messenger seems to be the next growth area in terms of how people communicate, it is very exciting. emily: the last thing i spoke with sheryl sandberg about, there is a mentum behind facebook live and they believe that is driving time spent on facebook. she said they are not interesting in long-term content deals like with twitter with the nfl games and the democratic and republican national convention. how important is facebook live

going to be to the platform overall? is an i think it indication of them wanting to go head-to-head with youtube. at where the tb dollars will migrate, there -- they will migrate -- they will migrate to digital. youtube is the key platform that captures the vast majority of those video dollars. tomorrow, what facebook is saying is they want to be involved at capture more of the video dollars shifting from tv. emily: what is your take on facebook live, what -- how powerful is it? they will not add ads, but facebook live is a new speed. if facebook live does well, that enables them an increasing time spent, that enables them to make more money on ads. erna: i think facebook live is part of the overall roadmap to

making sure that the majority of content on video -- on facebook in the next five years happens to be video. this is another way of attracting a different type of content producer as well as another impetus for users to get in on the video game. it will be interesting to see how the live battle plays out between twitter and facebook. they both have different approaches, but they both have different goals. there is more to be told. rryly: that was erna and ha kargman, ceo of kargo. all fingers pointed to the russian government in the hack attack. if you like bloomberg news, check us out on the radio. this is bloomberg. ♪

emily: welcome back to "the best of bloomberg west." the fbi is investigating a massive hack attack on the democratic national committee, which some specialists have linked to russia. directorr white house of security policy and legislation and the current ceo of manifold technology joined us. where does the fbi begin? what are they going to be looking into? >> they will be looking for more data to figure out who did this. but iftion is difficult, they can get more forensic evidence, and other sources of intelligence, that will make for a stronger case. emily: from what you have seen, isn't it clear? >> it is consistent with russia's overall m.o. and the evidence provided is pretty compelling.

emily: how hard is it to find out where they got into the system, how they got into the system, and what the motivations are. >> intent is difficult, but in terms of finding evidence of an intrusion, you can typically find evidence of malware. in this case, the hackers seem to be sophisticated because they covered their tracks. they deleted data and manipulated data. those are high-end capabilities and would have taken a lot of time. emily: this has been incredibly disruptive to the convention. many of the people on the floor who are angry are bernie sanders supporters. trump has been piling on here. what is your take? i find it tragic from many angles. the thing i have been taking about is maybe now we are at the point with e-mail and security where if you are not one of the biggest players, you cannot make

thing secure. facebook and google are encrypting everything and i think that is the direction that things are going. here we have hillary's server hacked, they said, in addition to using it in the first place as an error. the dnc's internal system, probably one that they ran on their own server. i don't know the architecture. it strikes me that people using primitive technology will get primitive results. i cannot help thinking about the fact that donald trump refuses to use email and he is probably smart to do that. emily: i spoke to kim dot --e, the notorious upload or creator of megauploader. listen to what he had to say. >> i have to say it is probably more julian. i am aware of some of the things

that are going to be roadblocks. emily: you are saying that julian assange will be her worst letter? house up -- her worst nightmare? how so? >> he has access to information. emily: what information? >> i don't know the specifics. emily: i did message with kim today. he doesn't think that wikileaks is behind the hack, but he does think that there is more to come. he said that hillary deleted over 33,000 emails. i suspect they will reappear and i am convinced that wikileaks has the -- has the deleted clinton e-mails and more. what is your reaction? >> it is not hard to predict that trolling will occur. it is also fair to assume that more will come out. what secretary clinton has going that she is generally held under the microscope all the time.

to suggest a new revelation will come out in email is probably far-fetched. >> i would not go that far. i think that she is clearly really from each successive revelation and i don't think you can say it could not get worse. but i wanted to ask before, shouldn't we be operating as if essentially everything we do is a potential open book? is that how bad it is? >> it is pretty bad. we encourage our clients to invest in data security, but also to take great care. emily: what about not e-mail? >> you have to be certain that what you say could come out on the record. you need to make sure it is consistent with your organization's strategy. emily: if this is really coming from russian intelligence agencies, how should the u.s. respond? >> i think this warrants a response for several reasons. if attribution can be made to the russian government this would be a significant intrusion

of u.s. sovereignty. it undermines a political institution in this country. to do that is well outside the norms of the international system and does require some type of response. emily: it's like a new cold war. >> what reminds me of his watergate. think of the controversy. it happens that it is a foreign power. in these bizarre reports of the possible links between the trump campaign manager trump himself and the putin administration and network. it is very weird in so many ways. i think that this sort of thing is tremendously destabilizing. i agree with chris that this has to be taken super seriously. emily: that was chris manifold

-- chris of medical technology and david. we have seen a surge in wearables. but why now? we will explain. ♪

emily: this is "the best of bloomberg west." i am emily chang. it is time for our weekly roundtable exploiting trends in tech investing and adventure capital. onare exploring the issues the cutting edge of health care disruption. i sat down with two people who have been investing for years. the chairman who sits on the board and robert middendorf, partner at norwest venture partners.

>> you have the government basically fund $30 billion of an industry to digitize health care. then the affordable care act changed how doctors in health systems are paid. they are becoming more and more paid on an episode or warranty-like care model. is, we have seen the consumer adopt, as well as physicians and other providers,

digital technologies. the ability to create a new laboratory for change. emily: you are an investor in 23 and me, digital and mobile help companies. what is your personal philosophy guiding your decisions? >> because it is my own money i can take risks. i can do things that i like. i don't have a list of criteria. overtime, i have become more interested in cultivating health recaptureg later to health. you can make money in both, but i would much rather prevent diabetes than treat people with it. though someng for, of this has changed as i am doing a nonprofit that i don't want a conflict of interest, but to me, the ultimate business model for a huge amount of this is an app with the curriculum, user-feedback data, plus

coaching. the motivation part is so hard. omatta uses coaches. blue mesa. all kinds of mental health services. talkspace. it is a accommodation of some kind of data tracking and the human beings that keep you motivated. emily: you have your wearable. robert, you invest in wearables. what is your philosophy? >> i agree with a lot of that. one of the big themes that we have looked at in health care is taking the labor of health care whether it is a position, therapist, or a nurse and helping their ability to scale to more patients over time. if you look at the labor and health care over the next 30 years, will fall short to deliver care face-to-face, one on one. there are a couple ways around

that. you can either go to lower cost, less trained providers, think the current providers that we have and will have, and use software to moderate -- automate the routine aspects of their work. i think you'll see that at a where a- omatta, counselor might train 16-30 people, and they are scaling it to wear a counselor can manage 1000 at a time. emily: i wanted to take a few moments to do a lightning rod. i will -- lightning round. i will mention a few different technologies. within 10 years, will it be ubiquitous or mainstream? first of all, what are you wearing? >> i have a few will bend which is out-of-print -- a fuel band, which is out of production. and then a jawbone, a dead battery, and i am about to buy an oura ring from finland that

is the best consumer sleep model. emily: you are all in. i don't have mine. you are not wearing yours. will everybody be wearing health tracking devices in 10 years? top 60%-70% of the in some form. the have to become better, more seamless. the exciting thing will be real-time glucose monitors. emily: are you invested in this? duringr -- i wear them workouts only. i think we will all be wearing or carrying sensors that we do not carry today or did not carry 10 years ago. most phones capture your activity. if you think broadly, the vast majority will be since arrest -- sensorized. emily: what about chips in our body? >> not in 10 years.

>> for a certain percentage, but not for most of us. emily: in our clothing? >> for a minority. emily: genetic sequencing for all? >> yes. it is like getting your blood type. emily: will that happen when you are born? >> or before you are born. more interesting, you're talking about sequencing your tumors or whatever weird things happen. >> definitely a significant sent -- percentage of the population will get sequenced. the entire genome is another question. costs are driving that's almost an inevitability. emily: how about a replacement for antibiotics? i don't know if we are getting too scientific. >> no. emily: why not? >> in the next 10 years? there are other approaches to treating infectious disease, but the bigger concern is resistance that will require new agents.

you will see more drugs because the bacteria are winning in some area, but i don't think we will get rid of antibiotics. >> we will do lots of other things, including sterilizing the infection's agents, like mosquitoes. antibiotics -- some of them will no longer be useful is the bigger problem. emily: instant medical test results? >> already exists. >> continued. convenience, especially in the u.s., as consumers bear mrore of the burden. convenience pricing and seeing the data yourself will become more important. the technology exists. emily: what about instant blood tests? >> sure. emily: everybody wonders if it is possible. >> it is. not just here but the developing world. that maliki. dyson andt was esther

-- formally legalizing the gig economy. to uber and others stand benefit. ♪

emily: ridesharing in china just got greenlit. they plan to legalize car sharing services in november. the lock clears a relative -- a regulatory uncertainty and lays out a new framework which allows them to operate. peter l stremme explains the details from the bloomberg tokyo bureau. >> not surprising that these is is would be operating in a legal gray area, but how in particular has this law changed?

this is a significant decision because you have the world's second-largest economy saying that right hailing will be legal within the country to stop this comes while there are regulatory battles being raged across the rest of the globe. for the chinese government to say that right hailing will be allowed and legal is a significant step forward. as you mentioned that have a lot of potential for didi and uber. that's not just because of the size of the market because china is wrestling with significant issues and the government is now saying that right hailing will have a central role in trying to address those problems. >> dan loeb is now backing did as -- didi as well. he said that being a money manager for the year has kind of been like game of thrones. but this is a country backed by

apple, alibaba. can you overcome these odds in china? >> you're right, it is a significant move. it is interesting to see dan logue jumping and where apple has gone before. uber is far behind in the china market. was formed of the consolidation of the two largest players at the time. it is a brutal battle of competition. they are spending billions of dollars on subsidies to draw in writers and -- drivers and r iders. the government is saying you cannot charge less for a ride than it costs. it may mean that the subsidies come down and that may change the playing field. earnings just crossed. what are the highlights to you?

missed on revenue and earnings. it is a challenge for the company. they have been described many times as theg google of china. they have not been able to evolve beyond that core search business. orchina they refer to bat, baidu, alibaba, and tensen. tensen are about four times bigger. baidu has to make up some ground here and they are facing challenges, particularly because of these new regulations. emily: bloomberg's peter l stremme from tokyo -- peter elstromm. oft does it for this edition

"best of bloomberg west." this is bloomberg.

>> welcome to "bloomberg businessweek." thehis week's issue, why dnc did not listen to security consultants. >> will oculus swallow facebook? >> and more. >> all ahead on "bloomberg businessweek." >> i'm here with alan pollack, the editor of bloomberg businessweek. let's talk about the story in the global e-commerce session. germany has opened its doors allowing refugees into the country. you look at the economic implications. >>e