♪ cory: i'm cory johnson. this is the best of bloomberg west. we bring you all of the top interviews from the weak and technology. coming up, will google win big by selling in china? .e will hear from bill gurley plus, more tech mergers may be on the horizon. we talk about the next big deal to drop. making space history. the first private company cleared for a lunar omission.

why nasa is backing lunar express. first, uber sold its china operations to didi. they will give uber $1 million after shuai peng stake in the company. on monday we sat down with bill gurley and asked how he felt about the deal. has immenseny respect for the opportunity in china. it will likely be the largest ride market in the world. because of a lack of car ownership historically as percentage of the population, you may have something similar like you hadng with cell phones versus landmines. it is a really, really interesting market and one we were super excited to be a part of. think, isme, i

something that is win-win for both companies. i think didi works more -- shares are worth more today because of this deal. involvements uber's going to be in this business? will they participate anywhere or just be an observer? >> i think so far a large percentage of our employees will be part of the didi team. you will have the best of uber china and didi working together. the companies obviously have a closer relationship that may have had in the past. cory: there will be continued involvement -- again, is it active management or just the employees going over and communication will happen but no active uber management? shareholderminority

. they will continue to run and we would be thrilled to be an investor behind them. all that is insinuating is because the relationship is closer, i suspect there will be many opportunities to work together going forward. this is really interesting. one of the things that came out of it is the notion that uber is actually profitable in the major markets where it has been running business. why was it so hard to get profitable in china? >> there is fierce competition. like a said, over the past two years we have been remarkably impressed with what they have done with didi. they have probably been the toughest competition that we have faced from a global perspective. in to the capital availability that has been out there leading to aggressive competition and leaving to

require investment, rather than profit. i think as travis said in his tog post, if you really want serve the interest of the consumer over long-term profitability, it has to be a part of that. cory: it changes a lot of things. it is interesting the way uber has look at individual markets into her ways. i always interview my driver about the business. the prices can be quite low. takes a that uber hyper local focus when it launches. is that fair to say? >> absolutely. every market is different. if you want to be low -- successful in the local market, you have to serve that market in a very specific way. cory: do you think that didi's competition with uber is in the u.s. market? to you and up with partnerships with didi outside of china?

>> that has not been a real particular point of focus from the deal. i suspect that what you will see going forward is didi working on integrating the uber and betteryees serving the community. i think it is the single largest ridesharing opportunity on the globe. with uber, you will see us focus our resources outside of china. opportunity, cemented through the partnership, we now have the opportunity to work harder, investing our product, and make it better for consumers and drivers elsewhere on the planet. cory: which is a better deal for profitability for uber? x?it uber black or >> i think they are equally

important. you can think of it as any andany that serves high-end low-end. higher end will have greater profit per ride, but the vast majority of this business is at x price point, which, in many cities, is half the price of taxis. the more we lower price, demand tends to surge upwards. i think consumers can rely on this in more and use cases in their daily lives. ,ith products like uber pool which are very complicated to deliver because of the complicated algorithms you need to make it work efficiently, you get price points that could be -- compete nicely with car ownership. i think you will see uber continue to invest all he can in the out rhythms that drive those

points down. we want to be the price leader in the market. cory: you told me a long time , when it came into the san francisco market, in short order, it was not just competing with the black car services and car services out there, there were actually more rars on the road after ube arrived. are you seeing that in all the markets you go to or is it limited to big cities? >> absolutely. i will share some numbers with you. it is based on numbers i have. the right sharing market

in san francisco is 10x what the black car service was 10 years ago. some people out there misperceived this as a taxi alternative. this market is moving to the point where we are competing with the notion of -- i think about on a miles traveled basis -- when you look at, especially going back to china, you lookinx what the black car service was 10 years ago. some people out there misperceived this at the fact that you don't have pervasive car ownership that you do here in the u.s. this would be the way you saw mass transportation -- the way you solve math transportation problems. cory: what about the didi side? we are joined live from taipei with a context -- with context on the asian market. i will let you take a victory lap from one of your successful early investments. it is interesting to me that the notion of the deal change. r offered to invest didi said first time, no. what are the dynamics happening

with the business? one, didi was involved with the yahoo! alibaba deal. with that, alibaba went from a $5 billion company to in over $200 billion market cap. my partner has been instrumental in getting some of these interactions happen sector by sector. , we saw a merger since we invested. with the structure, working together make sense. we actively promote a deal of this structure. it is very gratifying to see that uber has come around and made a strategic decision to do this. me ask you, what are

the dynamics on the ground. rather than take uber's money, didi one is to take its business. china, is happening in we are essentially giving involved in a massive transfer of wealth from investors to drivers. didi has put out lots of press releases talking the how many people they employ, former soldiers, steelworkers, so on and so forth. it is good for the economy, good for employment. that is part of the spin, but there is some reality to that. the feeling of the ground is didi was always going to win, it wishes whether or not uber's 20%-30% of the market would be enough to sustain them. if you are standing on the streets of beijing or somewhere

else, and you want a car, you are going to go to the one with the most cars. you will not necessarily open up two apps at the same time. you get that winner take all scenario. investors realize that was the way it would play out. "yes" from hear a you? do you agree? in spring 2013, uber was dominating worldwide and nowhere to be found in china. a deal back then would have made sense, but it was way too early for uber as a company to think about something like that. when the chinese start of expense, they move extremely quickly. they work 24 7, 6 days a week, sometimes seven days a week.

if a u.s. company wants to come to invest much earlier. cory: i'm struck by the similarities of the yahoo! aibaba fight where yahoo! had foothold in china but couldn't make anything of it. they finally gave up, got a piece of alibabas a result, and created a valuable asset over time. to think that is specifically the model here or the kind of model we may see going forward with the u.s.-chinese hardships -- partnerships and technology chuc? e-commerceted with and retail. now we see right sharing with or existingwnership transportation services. the efficiency that right sharing brings is critical.

in china, car ownership being in cities like beijing is around 20% versus 80%-9% in the u.s.. yet, traffic is terrible. what is the solution in the process? right sharing. desharing. cory: coming up, what is working for jack dorsey? this is bloomberg. ♪

cory: the biggest internet move since november. shares of as much as 18% on thursday. this, after proving that jack dorsey's companies can pay more taco talk of trucks --

trucks and coffee. and leaching sat down with square. >> it is really important trend we're seeing with the business. larger businesses grew by 60% year-over-year. that comprises about 42%. it is becoming very material 4s. large businesses, like small businesses, want ease of use. they want a plug and play system that is fully integrated. what square has done is bring them that cohesive hardware and working payment together. large businesses want fast access to capital. also, the brand is resonating. they see it out there. particularly the new reader. they see it in stores that look .ike them

that word-of-mouth is a very powerful way that square grows. emily: where do you think spot is?sweet large business, small business? >> businesses up to 20 million in revenue. business probably has multiple locations. it could be something like blue bottle coffee. they are in japan and also the u.s.. they probably have employees, they probably have a countertop. square can service the business up to that stage. we don't want to totally cut it off there because we find even big multinationals want to utilize square to bring more mobile into their environment. the container store is a good example. mobile, ease-of-use, delegates of the design, all of that resonates. we will continue to push that into bigger businesses.

emily: i want to ask about starbucks, a much bigger business and bluebottle. there has been debate as to how good this partnership has been for square. how big of a business can square handle? >> the extension is just for a short amount of time. they thought they would transition off of us by q3, but it looks like it will take a little longer. again, it comes back to we think our sweet spot is businesses up to $20 million in revenue. that is big market opportunity. at $12.5 billion -- we don't need to go find new market opportunity. it is about how we do more in the core market that we have. emily: would you say the

starbucks deal was good or bad for square? >> i think it was good for square at the time. .t put us on the map processing electronic payments for starbucks for four years. it helps the company grow up. we learned a lot and doing it. we learned what we're good at, and learned where we are better off cutting off. .ory: that was sarah frier coming up, tech megamergers keep pouring in. the likely targets and who the bidders could be. riskthat appetite for under a global -- gloomy global outlook. ♪

cory: this week kicked off with big deals from the tech sector. the sale of uber's china's business -- chinese business to didi. roger mcnamee.h >> the thing to recognize is when merger and acquisition activity rises, it is always a signal that the environment is difficult for earnings. emily: what are the difficulties? >> you have europe -- not just because of brexit -- europe was already slow. china has shifted phases. things are not as robust there. comethan half of earnings from outside the u.s., so if you have bad trends in europe and

parts of hr, you have to estimate that margins for s&p 500 companies have peaked. against that model, how are people going to keep the stocks up check with the smart thing to do is go out and buy earnings. if you look to buy things they give investors hope about the future, an mna is a great way to do that. linked in is a great example of that. microsoft had a great run, it was not clear with the next leap would come from, or that linkedin would provide that, but what it does is it changes the story. ll goingre a bu in, it gives you something more to be polish about -- bullish about. i want to applaud the management

of linkedin. they sold the company and got paid. emily: they did sell it for far less than it was worth. >> they so that for less than it was priced at. x-ray outcomen for the management and employees. from microsoft's point of view, it is twice $6 billion of value -- $26 billion of value. tokedin is tiny compared microsoft. it is not all obvious that this provides the list that microsoft needs, but it changes the story, so it willherefore probably work. lightningant to do a round. which of these companies will get acquired in 2016 or soon thereafter? gopro. >> i doubt it. i think they're kind of

independent. it's not clear where it is a great fit. emily: pinterest. >> probably. emily: who? >> i don't know, but i can imagine buyers think this is a good addition to our portfolio. i think i would way sooner own pinterest then yahoo!. emily: lyft. they are sort of doing it now already in the automotive industry. partnering with gm. uber entered the market, pricing true millions of customers into the market but it did not create the business model with what i would describe return one margins to the capital invested in them. i don't know how they get out of the box. , i think it's just that

that a sale would be in the gist of everybody. emily: pandora. you are a musician. >> i don't know. the music industry feels to be it ever shrinking business. beenack of imagination has staggering. you remember, 25 years ago, they had the entertainment field to themselves with the exception of television and movies. that was the last time they innovated, when they made the music video and put it on tv. since then, they have done nothing has customer value added. we created social networking -- of other forms entertainment. i can imagine a consolidation of pandora, but not an acquisition that provides a great deal for anyone. emily: twitter. >> yes. emily: by whom? >> i don't know.

i think they have in the list value. the issues they face internally, they don't appear to have an internal solution. emily: i want to talk to you quickly about instagram. you were in early investor in facebook, facebook now owns instagram. much like snapchat, you can now do disappearing stories. is that blatant copycatting? >> why are those two things inconsistent. they are not. i think it is important for any business to mechanize when they are added to savannah to. not a patentable technique. coming up, how will pokemon go affect the earnings of the big game companies? check out bloomberg advantage.

how? download the bloomberg radio app or go to bloomberg.com. this is bloomberg. ♪

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cory: welcome back to "best of bloomberg west." cory johnson in for emily chang. pokemon go is in 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 talked to the former eap ceo and our own bloomberg intelligence. >> let's look at zynga, the number of users has fallen. what do you see there?

>> 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 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 constant turn over. that 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. even with them about -- 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. or a multiplayer game on zynga. so, even if you like the old-style games, it is what you expected from the last year. can they lead ahead the way that pokemon go did?

cory: and they want to make a profit. they will spend money on the ipo they will spend money on the ipo and run out of runway. the numbers looked 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.

you look at ea and the star wars mobile, that is good for them. 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 where you are getting the big launches.

it's all about that. 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 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. cory: coming up, 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. they talk about the early stakes in 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. emily: let's start by talking about your investing

philosophies. become a fan,ly and made several investments. with the right founder walking in with the right product, i said, yes, it makes sense.

take bigu like to risks. >> we want things that lead to radical breakthroughs around the world. spacex, that is a product coming -- at the same time, we tend to be act lost it. read interested in film, photography, media. we have scott, who was an early employee at spacex. it is a very diverse team of people. we think the only rule is you can really have no rules. : 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. emily: what 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 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. 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 plotting the 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 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. 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. what happens to lyft? guest: we invested in 2012. 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. we are proud investors in it. 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 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 each 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. 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 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. 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. 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: 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.

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♪ narrator: the challenges facing our world are growing all the time. how do we build stronger economies with equal opportunities for all? how do we build a sustainable world for generations to come? how do we protect our cities and harness the power of technology for our common benefit? humanity has always been good at forward thinking. in this series, using the latest bloomberg research and analysis, we will make sense of the challenges of tomorrow, inequality, artificial intelligence, managing megacities, the gender gap, and