cory: this is the best from bloomberg west. losing in china. -- we willusiness to hear from bill gurley. we will talk to a veteran dealbreaker about the next big deal to drop. history, first private company for a lunar mission. why nasa is launching lunar

express versus space acts. x. joining uber's board. $1 million in a 20% stake. we sat down with an uber board member bill gurley about what he felt about the deal. the marketany has opportunity in china. very likely going to be the largest market in the world. because of a lack of car ownership historically as a , it is a very interesting market. a win-winutcome is

for both companies. cory: what will uber's involvement be? participate are just be in observer? >> a large percentage will be part of it. you have the best of us working together to serve the community and the companies will have a closer relationship that they have had in the past. that is by direction. cory: it will be continued involvement. active management or just the employees, or communication will happen but no uber management? >> we are minority shareholders. they will continue to run dd and

we will be thre thrilled to be investors. because the relationship is closer, there will be many opportunities to work together going forward. cory: this is really interesting. the notion that uber is improbable in the markets. why was it so hard to get into china? >> there is fierce competition. over the past few years, we have been remarkably impressed with what they have done with dd. they have probably been the toughest competition we have faced from a global perspective. into -- theow, tied capital availability has led to, you know, and aggressive competition. it has led to requiring investment rather than profit. travis said in his blog post

that if you really want to have interest over the consumer in the long-term profitability has to be a part of that. cory: it changes a lot of things. interview mike uber drivers about how their business works, how they rise they get. one of the things that strikes me is there can be a different cut. it seems uber takes a very high local focus when it launches in different localities. >> absolutely. every market is completely different. if you want to be successful, you have to serve the market in a very specific way. cory: do you think dd's competition with uber is in the u.s., or as a partnership -- does that change? in localities outside of china? that has not been a real

particular point of focus from the deal. i suspect what you will see going forward is dd working on integrating uber china employees and working to better serve that community. it is the single largest ridesharing opportunity in the globe. with uber, you will see outspoken majority in our resources down on areas outside of china. i am hopeful that with this theese opportunity, through partnership, we have the ability to work even harder in investing in making a product that are for the consumer and drivers anywhere else in the planet. cory: what is the bigger deal in terms of profitability? uber black or uber x? a lot more rides and the lot less cost. >> they are equally important. you can think of it like any

other company that serves high-end opportunity and low-end. you suggested the high-end will have more profit -- profit per ride. half themajority is price of a taxi. it is a demand of place. because of the complex all the --umes -- outer rhythms, overithms, you will see the next five or 10 years, uber continue to invest all of can to allow us to drive the price points.

we want to be the price leader in the market. uber whentold me that it went into the san francisco it was in short order, not competing with the black car services but there were more cars on the road after uber arrived in when it did. changing consumer behavior so more rides are being offered than ever before. are you seeing that in all markets you are going to? >> i think the ridesharing herket is about 10 ask witx what rideshare was years ago. are missed people perceiving it as a taxi alternative. this market is vast. it is moving to the point where we are competing with the notion of -- i think about it on a mile

traveled basis. when we look at, especially living back at china, you look at the fact that you don't have pervasive car ownership like you have in the u.s. this will be the way you saw mass transportation problems. cory: that was bill gurley. what about the didi side? let's bring in our investor from stanford and jim from the contacts on the asian rideshare market. it is very different. we will start with you. we will it you take a victory lap. it is interesting that the notion of the deal changed where uber offered to invest in didi said no and now they are investing $1 billion. what is happening with them? one, it was involved with

the deal in 2005. alibabao joint forces, becoming over $200 billion in market cap. ggb and myme again, partner has been instrumental in getting some of these to happen sector by sector. we saw itth didi become one company since we invested. we thought at some point this structure makes sense. we promoted a deal to this direction over the last 12 months. it is gratifying to see that uber has came around to do this. cory: yeah, let me ask you.

the same question -- uber became so attractive that rather than take over money, uber wanted to take their business. >> exactly. the thing is what was happening wereina was investors getting involved in a massive transfer of wealth from investors drivers. didi was talking about how many people the employee, former still workers and really good for the economy. that is part of the spin but there is a lot of reality to that. the feeling on the ground is they were always going to win themt was a matter of being able to sustain it. you are standing on the streets of beijing or somewhere else,

and you want a car, you will go to one with the most cars. that is really all this is about. so you can gets that winner take all scenario. realized that was the way it would play out and they had to get out. ?ory: did i hear a yup >> i actually introduced garrett , one of the cofounders of uber, back in 2013. was nowhere to be found in china. a deal back then would have made sense and made more money that it was too early as uber for a company. when a chinese startup is trying to move and expand, they move extremely quickly. they move six days a week, 70's we. a u.s. company wants to play in the winner take all market, they

have to go to china earlier. it was a bit too late. it makes sense to team up with a local leader. cory: i am also struck by the similarities -- the similarities of the yahoo!, alibaba fight. there was a foothold in china but cannot make anything of it and then they finally give up and greeted a fantastically valuable alley. his is a model we will see going forward with u.s.-chinese ships and elegy? distracting all my industries. it starts with online and e-commerce. justtomotive ownership or existing transportation services. in china, car ownership in

80% or 90% in the u.s.. yes, congestion is terrible so what is going on in the process? tim colpan from taipei. what is coming from the mobile services? this is bloomberg. ♪

cory: the biggest intraday move since november. shares as much as 18% on thursday. can they serve more than cancer trucks and baristas? square showed it can attract bigger wins -- 61% increasefrom large sellers.

emily chang sat down with sarah frier about the big relationship. . >> larger businesses grew about 51% year-over-year which comprised 42% of the gdp. why is that happening? in small businesses, they want interviews, to be able to have plug-and-play system that is integrated. what square has done is bring them the cohesive hardware, software and payment all working together. large businesses want fast access to capital whether it is a capital loan, they want that as well. i think also the brand is resonating. they see it out there, particularly the new readers. asean stores that look like them and that word of mouth is a very powerful way it grows. suite where is square's

weet spot? sarah: business is about $20 million in revenue. it is good that we draw a line of what we are targeting. a $20 million business probably based on location, where they are in japan or the u.s. they probably have employees or a countertop. square can absolutely service of business up to that base. off thereotally cut because we have squared to be more mobile into the environment. the container store is a good example where it is your closet and they want to be paid while they are in your home. allink mobile, ease-of-use, of that resonates and will continue to push that.

emily: i want to ask about starbucks which is a bigger business then bluebottle. you want to extend the partnership but there has been debate about how this partnership has been foursquare. how big a business can square handle? sarah: the extension is for short amount of time. they assumed the transition would be off of us but it would take a little longer. i don't want to make it seem like we are doing something that has longevity to it. again, it comes back to -- are is $20 million in revenue and that is a big market opportunity. $6.5 trillion in gross just and businesses up to $20 million. around $505 billion, billion -- so what we have 12.5 trillion dollars available, it is about how we do more in this core market. emily: would you say this was good or bad for square?

sara: it put us on the map. start up,this little wow, they are processing all the electronic payment for starbucks forwe have done that a good amount of time. we learned a lot about what we're get out, where we should cut off and say we are going to do business up to the size. i think the focus is good for the growth of the company. cory: that was square's cfo. coming up, more mergers rolling in. we will hear about the likely targets. vc'se will ask two top further appetite of risk in the gloomy outlook. we've also ask about here deal backing donald trump. ♪

cory: this week kicked off one of the big deals from the tech sector. didi and uber and tesla. what is driving this recent boost in deal making? ofsat down with a cofounder tech focus. >> the theme to recognize is when merger acquisition arises, it is always a signal that the environment is difficult for earnings. emily: what is happening? >> fundamentally, you have europe not just because of brexit, but europe is almost certainly going to add drag. china has clearly shifted phases. you look at the s&p 500 in the united states, more than half of the earnings come outside the u.s. if you embed trends in europe and the biggest parts of asia, you would have to anticipate

that margins for the s&p 500 companies will peak. there are certainly a lot of analytical support. how are people going to keep their stocks up? the smart thing to do is to buy earnings. buy things too give investors looking to the future and focus less on current results -- m&a is it great way to do that. i look at microsoft's acquisitions -- microsoft has had a big run. it is not obvious where the next growth was going to come from. linkedin changes the story. in --n microsoft bowling going in it is something. bull?: are you a >> no. i want to applaud linkedin. they went from nothing to tens of millions of dollars of value

and sold the company and got paid for creating this great thing. emily: they sold it for far less of what would it was worth. >> what it was price that. at. to me, an extraordinary outcome for the management and employees of linkedin. billion all valley will require some gymnastics. i don't know if they cannot do it but it is not a sure thing. wised iin is tiny scale compared to microsoft. storys change the therefore it will probably work. emily: a quick lightning round with you. which of these companies do you think will get acquired in 2016 or soon thereafter? first gopro. >> i doubt it. i don't think so. i think they are kind of an independent thing.

pinterest. >> probably. emily: who? >> i see a lot of buyers folding into that and seeing a great addition to their portfolio. i think they are wasting their own compared to yahoo!. emily: lyft. >> they are sort of doing it now in their own industry. emily: partnering with gm. >> which i think is the absolute right strategy. opened the market, it was so compelling that the true millions of customers and to the market but unfortunately did not create a business model which what i would describe as adequate margins. i don't know how they get out of that box. for lyft, that suggest a sale would be in the interest of everybody. emily: pandora.

you are a musician. >> i don't know on pandora. the music industry feels to me to be an ever shrinking bills business. it has been staggering. they have the entertainment field for themselves except for a television and movies. since they have stopped -- that was the last time they innovated when we created the music video on mtv and nothing has been customer value added. we have created video games, the internet, smartphones, social network -- millions of forms of entertainment. i don't see it happening. i can imagine a consolidation acquisition of pandora but i don't seem acquisition that provides great for anyone. emily: twitter. baidu? y who? >> i think twitter has enormous value.

the issues they face internally, that it appeared to have an internal solution. i keep hoping they do because i think the product is extraordinary. emily: you were an early investor on facebook. facebook owns instagram. they are doing disappearing stories like snapchat, you can have it lasted 24 hours. is that copycatting? >> sorry, why are those inconsistent? emily: maybe they are not. they are not. businessortant for any to recognize when they are at a disadvantage. customers clearly love that. hello pokemon go affect the earnings of the big gay companies that a game company -- big gay companies -- game companies?

and to download the bloomberg radio at -- app or you can tune in on the radio. this is bloomberg. ♪

♪ welcome back to "best of bloomberg west." cory johnson in for emily chang. in the games business. ea, activision come out with fresh any numbers -- fresh numbers and we will take a look at what is shaping the industry. foreman --o the former eap and our own bloomberg intelligence, mass -- marking permit. , thet's look at zynga

number of users has fallen. what do you see their? -- there? >> a big part of the new ceo is part of the story. she just came in from the arts. the rest of the user base, stabilizing the revenue. he delivered on cost cuts and it looks like they are almost all of that. but the user base is still declining. and that is what jobs the topline and bottom line. so they need to get that stabilized. cory: it strikes me that as we look at this, going to zynga, the constitution over -- the cannott turn over there make things easy in terms of working there, either for developers or sales or anything else. >> right, when they are in turn around mode like this, it is inevitable that there will be confusion and changing

priorities and whatnot. it seems like zynga likes ea and they are brought on executives from ea, so perhaps we will get more consistency over the next year. >> i think you need to tie these into the macro trend of the industry. you have the seachange from consul based changes, to mobile. even with them about mother is a shift from the 3-4-minute experiences to the immersive multiplayer experiences, like pokemon go. it is a great example, a whole new style of play that was not there three months ago. --a multiplier game multiplayer game on zynga. so, even if you like the it is what you, expected from the last year. can they leave ahead the way

that pokemon go did -- leave ahead the way that pokemon go did? cory: and they want to make a profit. they will spend money on the ipo and run out of runway. the numbers look better before they went public. you know, eventually they will have to sustain the profits. >> they are in a platform transition. it was built on the facebook platform and they are trying to reinvent themselves and they are still making the transition. time will tell. they need to just not catch up, catching up in the game industry never really means anything. do they have the right strategy to put themselves ahead of the pack? cory: who is the best hit maker these days? >> you know, the biggest companies, i think what really matters when generating hits comes down to intellectual property. the reason that pokemon go has

success, there is nostalgia. andlook i.e. a and -- ea the star wars mobile, that is good for them. the best companies of the best ip. cory: you can of the best ip in the world, nintendo has had pokemon for a long time and they have not been in to make anything of it until this showed up. i have not played the game, but it has people literally in the streets with excitement. >> i think ip does help. there are many apps, said to get that initial set of users, ip will help. it is about building engagement and for that to work ip does not get you to month one and month to -- 2, that is what matters.

that is where you are getting the big watches all of -- launches all about that. ands really ongoing revenue multiplayer play that matters. change,es pokemon go because companies that plan so far in the future with new ideas, those are hard to break into the game industry and it takes time. is it different out pokemon go? >> i do think that augmented reality is that the start of a steep growth curve must so there will be a lot of copycat games out of there. derivative type games from a lot of companies over the next year, leveraging the ip. you really need to have a great game plan and a smart plan for upgrading the apps to keep the user base happy and keep the wallets open. kristen sacra sale and mac

-- matt kaepernick. -- coming up,lk we talk about big risks. this is bloomberg. ♪

♪ cory: welcome back to "best of bloomberg west." this is series a. this week, geoff lewis and keith rabois talk about black swan ideas. stakeslk about the early in airbnb and both played key roles in square. efforts in pioneering to legalize weed. we talked about the challenges

to backing radical ideas. guest: my philosophy is my group .t is about the right founder i am looking for specific ideas and a specific founder and the combination of the two. we have different views on this. it is about top-down thinking. he is looking for a specific examples of that. he six years ago, predicted that health care would be more about math than biology in the future. so if your son or daughter wanted to be a doctor, they would be better off learning about calculus rather than chemistry. right now, that is starting. so i have become a fan of that view and i made several investments along that. the right funder walked in with the right founder -- background and has the right product and i said, this makes sense. guys like to you

take big risks. how would you compare philosophies? guest: we want things that will lead to radical breakthroughs for the world and we are willing to really back of the truck on these things like airbnb. x, as well. at the same time, we can tend to be agnostic on the areas on which we will find those things. the collection of people we have on our team have different backgrounds. we just added syan, who is interested in media and photography. we have scott who is an early employee of space x. team of people, so we are open to doing anything. and we think the only role -- rule is you can really have no rules. emily: does brexit change anything for you guys? guest: i do not think so.

guest: i do not think it changed anything for us as investors. about, in silicon valley we have been following the story of theranos, so do stories like that change the appetite for risk, where you see the implosion of a company that had so much potential? guest: i'm sure it would change it for other people, but not for us. we are focused on our own internal debates. at the meetings, you would know that we have a lot of things we are thinking about internally and what is happening externally, we try not to get overly strapped on that. but overall, people feel more risk today. emily: david sachs, you are close friends with, he is pushing back on the ideas and their nose is in the same boat

-- sarah knows -- theranos is in the same boat. guest: we tried to be as lack of consensus and derivative from other people's views when we make investment decisions. trapped intot get what other people think and it is very dangerous and a seductive at the same time. that said, where risk is priced out of a lot of rounds for the last four years, effectively people were not plotting the , it is the valuations hard to compete in that environment. you have the same view of a company that nobody is applying the risk at discounted that has come back to normal, i think. there is much more discounts. it is being applied to most rounds now. where we are interested for our own reasons, the offer is pretty competitive, where two years ago it could have been 50% less than

others were willing to pay. emily: you tweeted now is a good time to start a consumer internet company. why now? guest: i think, right now the buzzwords are a.i., machine learning. there is a range of them. we invested in ai in 2011. right now, things are on the consumer side. you have companies that are eating big portions of different businesses, pokemon go, that is not a startup but it has captured the imagination. there is actually still really d in thes unmine internet. emily: it were just sold part of -- uber just sold part of their business to didi. what happened to lyft? uest: that men, it was bigger

-- uber was bigger and they have always been bigger. lyft has been underestimated every step of the way, they had a great july and they have been underestimated that we are proud investors in. emily: do they get bigger? guest: i invested way back. i go back to the original story. but i think that they should be a sustained, independent business. i think that while uber got distracted with the not -- with a lot of international forays, i would guess that almost 50% market share in san francisco, just looking at widely available yft is pretty permit. cory: coming up, the billionaire investors making space history, clear for each of to the moon. this is bloomberg.

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♪ cory: a milestone first base history this week, aviation officials granted the first private company the permission to leave earth's orbit and land on the moon. we started by asking all about the milestones they are aiming for. guest: going to the moon is symbolic of what a small group of people can achieve. of course we are going to the moon and yes it is a little moon -- literal moonshot. but what it means is, the things that can only be done by the supercars, only three superpowers have ever landed on the moon. no private company has done it. and when we land, not only do we become the first private company to do so, we become the fourth superpower. that shows that it inspires people to do this, and the man

who grew up in india can come to america and achieve these big dreams, what is my moonshot? cory: you have something -- emily: you have something on elon musk? guest: we love him. but when you leave the earth's orbit and becoming the first company to do so -- what we are announcing today, it becomes interesting. we have become the first and only company to ever have received permission to leave earth's orbit. everybody is going to the space station, that is in earth's orbit. it would be -- and we will be the first coming to leave that. emily: 40 planet to do once you get there -- what are you planning to do once you get there? sometime next be

year. we are starting to look for minerals from the moon, looking for the platinum grade materials, looking for the rare earth elements, and looking for helium 3. that is the best resource for clean energy. a small quantity of it could power the planet for billions of years. emily: why is this important to space exploration, research, and the future of humanity? guest: you have to learn to live on the planets. even if you want to go to mars like elon musk wants to do, the best training is living on the moon. once you learn to live off of the planet, you need to learn to live without all of the things we have, the infrastructures here. once you live on the moon, you can go beyond, to mars. there is plenty of water on the moon. what if we can make that into oxygen and we get fuel for the

rockets and fuel for humanity. emily: do you want to start a colony on the moon? guest: it is about living on the moon, that becomes the basis to live on mars. and we also want to reduce the cost of going into space and one way to do that is getting the fuel from -- for mars, it would've we had a depot on the moon and you get everything you need to go to mars. emily: you are planning to send robots first, but then you plan to send humans. what is the timeline for that? guest: think about what you are doing. we are building a self driving spacecraft that is capable of landing and doing everything on the moon. obviously, in the next 10-15 years we can send a human to the moon. emily: tell me about how you

worked with the government to do this? guest: nobody has ever asked, they never imagined somebody would ask. emily: you are saying that they said yes because nobody ever asked? guest: it is within their sphere to say no. but we ended up going to the white house and they called a meeting and we potentially found a solution and they gave us an exception, because we are the only company asking. based on all of the things we want to follow, you actually fall into the guidelines and we will give you a one-time approval. in the meantime, we will figure out what is happening next. emily: you will go to other planets? guest: absolutely. pluto and beyond. cory: that was the cofounder of moon express. that does it for this edition. tune in next week when we talk to the cofounder of alibaba on

thursday, at 9:00 a.m. eastern. this is bloomberg. ♪

♪ carol: welcome to "bloomberg businessweek." david: we are inside the magazine headquarters. carol: elizabeth warren on donald trump. david: how time warner will take on amazon and netflix. carol: and looking at broadway. david: all of that ahead on "bloomberg businessweek." ♪ carol: we are here with the editor, ellen pollock. this is big interviews. and there is a theme tying them altogether?