cory: this is "the best of bloomberg west." big byup, will uber win losing in china? more tech megamergers may be on the horizon. the billionaire on the newer making space history --

entrepreneur making space history. the first private company for a lunar mission. why nasa is launching lunar express versus space x. travis joining uber's board. $1 million for a 20% stake. we sat down with an uber board member bill gurley and asked about what he felt about the deal. >> the company has the market opportunity in china. very likely going to be the largest market in the world. because of a lack of car ownership historically as a population, it is a very interesting market. one that we were super excited to be a part of. but, this outcome is something

that is a win-win for both companies. both companies shares are worth more because of this deal. cory: what will uber's involvement be? will it participate in any way or just be in an observer? >> a large percentage will be part of their team. you have the best of us working together to serve the community and the companies will have a closer relationship that they 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 thrilled to be

an investor behind them. 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 profitable in the major developed 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 didi. they have probably been the toughest competition we have faced from a global perspective. that, you know, tied into -- the capital availability has led to, you know, and aggressive -- an aggressive competition that has led to requiring

investment rather than profit. travis said in his blog post that if you really want to have rve consumer interest profitabilityrm, has to be a part of that. cory: it changes a lot of things. i always interview mike uber -- my 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 didi'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 didi working on integrating uber china employees and working to better serve that community. it is the single largest ridesharing opportunity in the globe. -- on the globe. with uber, you will see the majority of our resources down on areas outside of china. i am hopeful that with this chinese opportunity, through the partnership, we have the ability to work even harder in investing in making a product that are for that's making our product better 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. -- a 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 per ride. the vast majority is half the price of a taxi. it is a demand of place. consumers can envision themselves relying on this in more and more use cases. pool,products like uber coo you reach price points that compete quite nicely with car ownership. you will see over the next five or 10 years, uber continue to invest all they can

to allow us to drive the price points. we want to be the price leader in the market. cory: you told me that uber when it went into the san francisco market, in short order, it was not competing with the black car services but there were more cars on the road after uber arrived in when it did. it was about changing consumer behavior so there were more rides are being offered than ever before. are you seeing that in all markets you are going to? >> i think the ridesharing market is about 10x what the rideshare was years ago. that's what the black car and taxi was years ago. some of the people are missed -- misperceiving 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 olve 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 -- with the context on the asian ridesharing market. it is very different. we will start with you. we will it you take a victory -- allow 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. those two joining forces, alibaba becoming over $200 billion in market cap. time and time again, ggb and my partner has been instrumental in getting some of these to happen sector by sector. we view that with didi we saw it become one company since we invested. we thought at some point this would work together, the 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.

what are the dynamics on the ground? uber became so attractive that rather than money, they wanted to take their business. >> exactly. the thing is what was happening in china was investors were getting involved in a massive transfer of wealth from investors to drivers. didi was talking about how many people they employ. 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 but it was a matter of them 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. you will not open to asset the same time. apps at the same time. getting the mass so you can get that winner take all scenario. uber investors realized that was the way it would play out and they had to get out. cory: did i hear a yup? do you agree? >> i actually introduced garrett, one of the cofounders of uber, back in 2013. in 2013, uber 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 work seven days a week.

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 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 and createded -- the alibaba value play. this a model we will see going forward with u.s.-chinese ships

-- u.s.-chinese partnerships? >> internet is distracting all my industries. it starts with online and e-commerce. an automotive ownership or just existing transportation services. in china, car ownership in beijing versus 80% or 90% in the u.s. yes, congestion is terrible so what is going on in the process? cory: tim colpan from taipei. what is coming from the mobile services? this is bloomberg. ♪

cory: this week, square sides biggest intraday moves in november. .hares up 18% on thursday sales up 41%. a 61% increase in

the volume of payments from large sellers. emily chang sat down with sarah frier about the big relationship. sarah: a really important trend we are seeing in our business. larger businesses grew about 51% year-over-year which comprised 42% of the gdp. it is becoming very material for us. why is that happening? small businesses, they want ease-of-use. a plug-and-play system that is fully 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. they are seeing it in stores that look like them and that word of mouth is a very powerful way it grows. emily: where is square's suite

-- sweet 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 is multi-location, where they are in japan and the u.s. they probably have employees or a countertop. square can absolutely service of business up to that base. we don't totally cut off there 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. i think mobile, ease-of-use, all of that resonates and will continue to push that. emily: i want to ask about starbucks which is a bigger

business than bluebottle. you want to extend the partnership but there has been debate about how this partnership has been fouque. -- for square. how big a business can square handle? sarah: the extension is for a 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 -- our sweet spot is $20 million in revenue and that is a big market opportunity. $6.5 trillion in gross just and in businesses up to $20 million. 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. suddenly, this little start up, wow, they are processing all the electronic payment for starbucks and we have done that for four plus years now. we learned a lot about what at, 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 from elevation partners -- about the likely targets. and we will ask two top vc's

about further appetite of risk in the gloomy outlook. we also ask about here deal backing donald trump. ♪

cory: this week kicked off with big deals from the tech sector. didi and uber and tesla. what is driving this recent boost in deal making? we sat down with a cofounder of 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. things are not as robust there. if you look at the s&p 500 in the united states, more than half of the earnings come outside the u.s. you would have to anticipate that margins for the s&p 500

companies have probably peaked. 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. if they want to buy things to give investors looking to the future and focus less on current results -- m&a is it great way of doing that. microsoft plus acquisition of linked best microsoft's acquisition of linkedin. i look at microsoft's acquisition of linkedin. emily: are you a bull? >> no. i want to applaud linkedin. they went from nothing to tens of millions of dollars of value -- billions 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. >> to me, an extraordinary outcome for the management and employees of linkedin. $26 billion out of that will require some gymnastics. i don't know if they cannot do it but it is not a sure thing. linkedin is tiny scale wised -- scale-wise compared to microsoft. it does change the story 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. emily: pinterest. >> probably. emily: who? >> i don't know. i can see a lot of buyers folding seeing a great addition to their portfolio. i think they are wasting their -- 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. when they 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.

ah -- i don't know on pandora. the music industry feels to me to be an ever shrinking bills ans ever shrinking -- to be ever shrinking business. it has been staggering. 25 years ago, they have the entertainment field for themselves except for a television and movies. that was the last time they innovated when they 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? 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. instagram now doing disappearing stories like snapchat, you can have it last for 24 hours. is that copycatting? >> sorry, why are those they are not. it is important for any business to recognize when they are at a disadvantage. this was not a copywritable technique,. cory: how pokemon go affects the earnings of the big game companies. check us out on the radio, the four hour show i do daily.

this is bloomberg. ♪

♪ cory: welcome back to "best of bloomberg west." cory johnson in for emily chang. pokemon go is roiling the game business. ea, zynga, and activision come out with fresh numbers and we will take a look at what is shaping the industry. we have a director of gaming research, a former eap ceo and our own bloomberg intelligence. >> let's look at zynga, the number of users has fallen.

what do you see there? >> what is really disappointing is the user decline. a big part of the new ceo is part of the story. he just came in from electronic 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 drives 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 constant turn over. that -- ceo,ld ceo, the new cannot 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 have 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 to mobile. that is something zynga is trying to execute on. there 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 multiplayer, game on zynga. they were releasing old style games, even beautiful games, but one you expected from the last

year. >> can they lead ahead the way that pokemon go did? cory: and they want to make a profit. moneyere lucky to raise a with an ipo. 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. you have to leap ahead. 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 comapnies are still the best at it. i think what really matters when generating hits comes down to intellectual property. the reason that pokemon go has

success, there is nostalgia. you look at ea and the star wars mobile, that is good for them. you can't beat good ip. the best companies have the best ip. cory: you can have the best ip in the world, nintendo has had pokemon for a long time and they have not been able 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, so 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 2, that is what matters. that is why you are getting the

big launches. it's all about that. similar to thes pc market. it is really ongoing revenue and multiplayer play that matters. cory: does pokemon go change, 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 for pokemon go? >> i do think that augmented reality is at the start of a steep growth curve, so there will be a lot of copycat games out of there. we will see derivative type ar games from a lot of companies over the next year, leveraging the ip. i agree that 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.

coming up, is this the right time for internet startups? coming up, we talk about big risks. this is bloomberg. ♪

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

>> my philosophy is a little more micro. i believe it is the right founder with the right product. we have different views of this. he is looking for specific versions of that. he five or 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 and computer science, rather than biology and chemistry. it was very radical 6 years ago, but right now is starting play out. so i have become a fan of that view and i made several investments along that thesis. but the reason i made the investments is that the right founder walked in with the right background and has the right product and i said, this makes sense, even though he started with the top-down view. emily: geoff, founders fund's motto is, you wanted flying cars, you got 140 characters. you guys like to take big risks, make big bets too.

how would you compare philosophies? guest: i think the philosophies are similar in some ways in that we want things that will really lead to radical breakthroughs for the world, and we are willing to really back the truck up to these things on multiple rounds. these things like airbnb, space x, as well. really back the truck up to these things. 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 film, photography and media. she has been a proflific angel investor. we have scott nolan who is an early employee of space x. we have peter, we have brian, luke -- it is a diverse team of people, so we are open to doing anything. and we think the only rule to find these incredible breakthrough companies is you can really have no rules. emily: does brexit change anything for you guys? we talked about what is going on in the u.s., but what about

globally? guest: i do not think so. guest: i do not think it changed anything for us as investors. on brexit, it is too early to know. emily: what about, in silicon valley? we have been following the story 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 investment team 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 distracted with that. but overall, people feel more risk today. emily: david sachs you are close friends with, he is pushing back on the idea that zenefits and theranos are in the same boat. are there any lessons to be learned there?

guest: similarly, we try to be as lack of consensus and lack of derivative from other people's views when we make investment decisions. you could yield the same as everyone else. so, you cannot get trapped into what other people think and it is very dangerous and 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 applying risk to the valuations, it is hard to compete in that environment. you have the same view of a company that nobody is applying the risk at discount. that has come back to normal, i think. there is much more risk 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: you want to avoid things where there are buzzwords. i think, right now the buzzwords are ai, machine learning. there is a range of them. we invested in ai in 2011. we led the first investment in deep mind. 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 big areas unmined in the internet. emily: uber just sold part of their business to didi. lyft is struggling to gain market share. what happens to lyft? guest: we invested in 2012. uber was bigger and they have

always been bigger. they have always had more money. lyft has been underestimated every step of the way, they had a great july and they have been underestimated. we are proud investors in it. emily: do they get bigger? or does it get bought? guest: i invested way back. i go back to the original story. but i think that they should be a sustained, independent business. they have grown while uber got distracted with a lot of international forays, i would guess that almost 50% market share in san francisco, just looking at widely available services, i think lyft is pretty permanent. cory: coming up, the billionaire investors making space history,

clear for a trip of to the moon. this is bloomberg. ♪

♪ cory: a milestone for space history this week, aviation officials granted the first private company the permission to leave earth's orbit and land on the moon. moonspace, weed 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 literal moonshot. but what it means is, the things that can only be done by the superpowers, 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 poor in india can

come to america and achieve these big dreams, what is my moonshot? emily: you have something on elon musk? guest: we love him. we love richard branson. 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. and we will be the first to leave earth's orbit. emily: what are you planning to do once you get there? guest: it will be sometime next year. the second half of next 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. and 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 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: there was never an agency to gratn approval, because 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. there is no doubt in my mind. 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. ♪

♪ angie: coming up, the stories that have shaped the week in business around the world. the bank of england setting a post brexit direction while japan has another fiscal arrow. >> that is the shakespearean tragedy of abe. >> the july jobs number, what message will send the feds? >> the consumption side is holding up, what is not holding up is business investment. >> and all eyes on earnings this week. >> a great quarter across the board. >> it is reshaping the earnings mix.