emily: i am emily chang and this is the "best of bloomberg technology," where we bring you the top interviews from the week in tech. coming up, why he is disappointed in jack dorsey and all in for a twitter acquisition. plus, first on bloomberg, a sitdown with mark cuban, who holds nothing back on donald trump and google gambles on the smartphone. we will break down the

strategy for the $400 billion market and the plan to take on apple. what a week it has been for twitter. shares plunged the most in the year, following google is not interested in buying bit social networking site. disney and apple are also not interested. it leaves salesforce as the top contender to potentially scooped twitter up. this week, we spoke with today and founderinvestor and he did not mince words, he thinks the future twitter looks like. here's an interview from the conference in san francisco on tuesday. chris: it is an incredible story of underachievement, of potential never realized, so i would be really excited for someone with vision to go in there and take chances. we know it has the most valuable body of information in the world. there is stuff in there for every person on the planet that is interesting. they have failed repeatedly to service that in an easy to digest way for normal people.

emily: have you been disappointed with jack's product leadership and hoping he would bring in someone else? chris: yes. i was hoping we would see him get back involved in the company. that is one of the reasons why we put a lot of our hats behind jack coming back in. emily: was that on the table? chris: yes. he always had the product vision in the company. he took it from 2 million users to 200 million users. he may not want to keynote on the big stage. his ideas have been a couple years ahead of the rest of the market. case in point, four years ago, he said we needed to get into live video. i don't think any of us understood the urgency. now it's obvious that live video is the evolution of all of these forms. emily: why didn't that happened? chris: i'm not sure. it has been a disappointment. i didn't see it grow like we had been told it was going to grow. i think he's delivered on the revenue side to the extent he

can without user growth. i would like to see this go to a partner that has distribution and grow it organically using other platforms and at the same time, say, we have got the best data and we've got it faster than anybody else out there. why are we not making it easier? emily: dick costolo said twitter can be an independent company. what do you think? chris: i don't see it getting better without fresh blood. i don't see a path to that. i don't hear any 2.0 or 3.0 in the works. i haven't heard anybody talk with passion about what is coming down the pipe out there. emily: do you hope for an acquisition and new c.e.o.? chris: i hope for an acquisition. i think there are some great teams that fit in naturally. that's not a new thing for me. i think it's a natural complement to four or five companies out there. emily: who would you like to see? chris: look, it is an obvious google fit. i think google underestimated the company for a long time

because it's not scientifically hard to pull off in the same way google underestimated blogger. anend but it a front is a canvas on which humanity pains incredible thoughts. that's what twitter is. but not to the scale that blogger ever tried. facebook has tried to copy this company a bunch of times. they have not pulled it off yet. they could really bring some great vision to the cure ration of the tweet. if you and i are busy all day and we check into twitter, i don't want to see the 10 most recent tweets. i want to see the 10 best and the ones with the most engagement. that's why sportscenter exists, so you can see the highlights. you don't watch just a game that happens at that moment. i think facebook could really help with that. i think microsoft could absorb this business and take some chances and enjoy them. emily: disney? chris: disney makes sense. i think people are overweighting

the importance of media on the platform. the truth is there is a lot of audience there and a lot of engagement. if you do that, media partners will come. you don't have to do a strategic media access deal to get people excited about a platform like this. you just have to make it the most fun place to engage. and the easiest to monetize. then content shows up. years ago, i brought kobe bryant by the twitter offices and they showed him how the nba was partnering with twitter to provide clips of the game and he said, how much did you have to pay the nba to get that? everybody in the room laughed. he said, why are you laughing? and we said, for free. we are going to split money. he said, really? it was in the nba's interest because they know there is a powerful audience. when they engage, those clips are going to drive the actual broadcast. you don't need to do a content partner deal. were the biggest

shareholder at one time. have you sold any? chris: i have definitely sold some twitter shares. emily: how much? chris: i did not own as many as i used to because i am not an idiot, but i own more than i should because i'm an idiot. emily: how much do you think it would go for? chris: as much as i am a cheerleader for the company and i believe there is potential, it is really hard for something that's not growing to justify paying over what it is trading in the market right now. i think it's priced to perfection. emily: i noticed you are using snapchat a lot more. what do think is the potential and what do they get the twitter didn't? chris: what i think distinguishes it is less about the product and more about the product team. the company has reinvented itself a few times now. they are bold. they take chances. when they walked up to me after a talk i gave once and said we love what you stand for and we love the way you work and we want you in on our deal, they walked away and i told my younger business partner.

he said, you said what? by the time we get back, they made a deal with some else. it probably cost us a billion dollars, but i should have evaluated the team to see what they were capable of building next. that is a really compelling product. it used to be ephemeral and now it is safe to memory. discover is an interesting product. that works in the moment, frankly. with the glasses and what's coming on with augmented reality , it fascinating. i don't own any stock there. i wish i had owned it a few years ago. i like how quick and nimble they are and how willing they are. emily: how long do you think they will stay in the vc game? chris: i took a couple steps back a couple years ago. partly to rediscover why i wanted to do this. you have to be all in. you have to be willing to download every app, talk to young and old people, talk to entrepreneurs and have them

dive in. when i moved up to tahoe in 2008, that was the model. bring travis, garrett up to tahoe and go deep. that is a full commitment. i have an incredible wife and three kids under five. that cuts into it a little bit. i took a couple of years off to breathe and think through it. it is kind of funny. shark tank has been a backdoor into diving into these small companies again. and rediscovering the passion. there is other stuff i care about a lot. i care about the charity work we do. i care about charity water. i care about the environmental stuff that we haven't announced yet. i care a lot about politics, too, right now. emily: i want to talk about politics. what is your take on the elections? chris: it's the only take you can have if you are in the business world. i don't speak to any real business leaders in the startup community or big companies who don't feel like there's any other choice in this election but hillary clinton.

we know she is qualified. she has 30 years of experience. she has succeeded in all of her other roles. her favorability ratinwas at 75% until they kept heaping accusations on her that were proven to be untrue. it stacks up after a while, but it is a residue that is completely unearned. meanwhile, we've got a guy that even if you come at this from a greed take -- greed case, it is going to be a disaster for the market at a disaster for interest rates and entrepreneurship out here. he has openly threatened to sue and sensor companies. that's not how this sector does business. you want a roadmap free to innovate, and he stands in opposition to that. emily: that was chris sacca at dream force. we will bring you more of that next.iew i ha

mark cuban gives us his take on everything from the presidential election to his outlook on tech innovation. and a reminder, "bloomberg west" is now "bloomberg technology." check out our redesigned website. we are at bloomberg.com. /technology and on twitter at technology. this is bloomberg. ♪

emily: welcome back. now back to our interview with chris sacca. in addition to twitter, he is also a big shareholder in uber. he said they would be the winner in a winner take all market. i sat down with him at dream force and asked him what he thought about uber selling their china business. take a listen. chris: i think the china thing ended up being a big win. travis, as we have talked about in the past, is irrationally

entrepreneurial at times. first city was launched in san francisco. the second city they launched in was new york. it is a difficult city to do business in, but he wanted to go there and prove he could do it, and no matter how many low hanging fruit, he went to new york and then paris. they hate anybody who comes in with a disruptive product. why are you flying to paris? emily: china is a huge market. chris: he was two years behind. he went into a company where the government did not want it to be there. offices got raided in hong kong. cars were being seized. it is fascinating to me that paves able to pull off a 20% deal. i love it. i think it's a good outcome considering how far behind we were with a regime that has not let google or facebook operate there. it is impossible to disrupt one of their incumbent businesses. i am thrilled. as a shareholder, i'm thrilled. the road is cleared. i do not know anything about ipo

plans. ifravis hait, we would never go public, but the road is clear because the finances look great now. we get to sit back and ride this wave of success with the market leader in china. emily: what are the prospects in an ipo if it happens? chris: unlimited. they are making transportation as ubiquitous as water. you see them going down markets the uber pool that represents more than 70% of the traffic in the city now. it's cheaper than a taxi and the bus. now they are doing that really flat fee pricing. you pony up a couple of bucks and you have guaranteed pricing, even during surge. in some l.a. markets, you can go hollywood to santa monica. the flat free price doesn't pick up. they are crushing their competitors. there is nothing to contain that company nor travis as the founder. emily: do we see more m&a? what happens to lyft?

chris: i don't think there is anything synergistic about uber buying lyft. they stared travis down and realized this is a guy we could lose two. there is the potential. let's negotiate a deal. travis does not look at them and see that. there is no reason to. lyft said they would only lose $600 million. they're not even operating it anymore at an expensive international market. it's a brutal case for them. i don't think they survive this in their current form. get rolled up into an automatic manufacturer. i do not think there is good news ahead for their investors. emily: that was chris sacca. in this edition of "out of this world," a big step forward for jeff bezos's space company. and its plan to send tourists into suborbital space. they completed their most rigorous test of an escape system that would shoot

passengers out and away from the rocket in case of a problem. it blasted off from its test site in texas wednesday morning. parachuteslater, deployed and slowly descended to earth. they hope to send crews into space next year and sell tickets in between $250,000 to 2018 four $350,000. coming up, our interview with investor mark cuban and why he says donald trump is "completely unfit to become the next president of the united states." this is bloomberg. ♪

emily: a story we are watching. the f.b.i. has arrested a u.s. contractor for allegedly stealing classified documents. they unsealed a criminal complaint wednesday that said be stolen information could cause "exceptionally grave damage to national security if it is released." the contractor is harold martin. he was arrested august 27.

he worked for the consulting company and was assigned to the n.s.a. that is the same employer , of whistleblower edward snowden who released thousands of classified files from the nsa in 2013. the investigation into the latest leak occurred around the same time the sophisticated hacking tools used by the nsa were leaked online. shares plunged on the disclosure and the firm said it fired the employee in question. dallas mavericks owner and investor mark cuban has not been shy about voicing his political preferences. he was one of hillary clinton's debate. cuban sat down first with bloomberg from the event in san francisco and gave his thoughts on the state of silicon valley and the downtick in ipos and donald trump. take a listen. mark: there is an attitude in the valley where it's go big or go home.

fake it until you make it. i think there has been a problem where we have given up on ipos. i think that is bad for the country. emily: what should be happening? mark: i think there should be a lot more ipos. where would facebook be if they had not acquired instagram? what if twitch wasn't acquired and these companies were standalone and competitors? you can list hundreds of companies that were acquired that 15 years ago would have gone public. emily: how do you think it would impact growth in general? mark: when you have a president and you don't know what he's going to say next, that is the ultimate uncertainty. he has not been able to control himself this close to the presidency. he is not going to change grid one ridiculous comment and north korea drops a bomb on japan. one demonstration of being oblivious about the world and vladimir putin invades another

country and goes further in the ukraine, those are the types of things that rattle everybody. that is why when i said the market would tank if he were elected, war is the ultimate uncertainty. social unrest is the ultimate uncertainty. you can deal with taxes. if you don't agree with hillary clinton's programs you , can go to your congressman and deal with it. right? you can have a say in trying to oppose it. if someone is oblivious to what is going on in tor, look at charlotte. andusinesses cannot open you are afraid to send your kids to school, that is when society takes a turn for the worse. emily: you think there could be massive social unrest? mark: who knows? what i'm saying is hillary understands about the power in the world. he does not. when he was asked about the change in obama's first strike approach, he didn't know what he

was talking about. that's the scariest thing ever. this has become less about his politics and less about what he proposes. it's not even about his lack of understanding. as president, you make one slip of a comment and it's offensive to an unstable world leader or a contentious world leader, that's all the excuse you need. one bomb drops on a nato ally, one incursion on a nato ally, we are in a different world. as an investor or a business person, i look at risk assessment. is it a greater than 0% chance that trump would say something stupid as president that could cause north korea to take an action? yes. is it greater than 10%? based on him tweeting at 3:00 in the morning about a beauty queen? it might be greater than 75%. there is no amount of policy that can offset that. that makes him completely unfit. i don't care what you think

about hillary clinton. we can argue about the stuff that has been said about her. she is pragmatic and she is smart. she understands deterrence. she knows what the nuclear triad is. she understands the military. she may not be great at cyber, but she is starting to understand it more and more. he has no clue. when he tried to explain cyber, he didn't know what he was talking about. you add those things together, with hillary clinton, she can do a good job, and she understands -- she has contextual awareness. she understands context. we can't say any of those things. right now, 30 some days away from potentially being the president and we are talking about can somebody keep his phone away from him. emily: you have blasted him for not paying taxes. what is wrong with him taking advantage of the tax code legally? mark: nothing is wrong with him using that. i have as well if i was out there saying i was the world's greatest business person, i would admit my mistakes. if i was releasing my taxes and

i had a $915 million loss, i would tell you why. there are two ways to look at it. one, i am a financial engineer and i'm trying to hide it. and i am ashamed of what i have done, or two, if he really was an entrepreneur and really had cared about investing in people and developing jobs, why not say i took a big chance. i invested in this business to create 10,000 jobs, but i failed in it and learned a lot. you will get the benefit of that knowledge of failure. there is nobody that is ever been successful that has not had failure. he has never admitted failure. emily: you said it's not patriotic. you are a step ahead of trump on the bloomberg billionaires index. have you ever paid more taxes than you owe? mark: not that i owe, but i written have checks to the treasury? multiple times. i have written checks for overtime for police. i have written checks to get

graffiti taken care of in dallas. i don't know how many times for how many millions of dollars. have i paid taxes writing to the treasury? no, but have i done it to the city of dallas treasury? absolutely. in terms of taking every possible deduction, i am fine with that. when i talk about being patriotic and paying taxes, what i mean is you can push the envelope in different ways. there is every likelihood that rather than being a real estate mogul, it's a tax shelter. he was trying to get that for a deal he had coming down. he did not have a billion dollars in assets to lose. if you don't have those assets to write off, you will not get that loss. so there had to be something else there in my opinion. that is just a guess. emily: you sat in the front row at the debate. hillary clinton said at a rally that she thinks you unsettled trump. will you be at the next debate? mark: to be determined.

emily: tell me about the experience. mark: it was crazy. no question he was nervous. the leg was pumping. he was leaning forward. what really rattled him was the audience. he thought he was on a roll and he said a few things that the audience just laughed at him. that really set him back. he thought he was on a roll. secretary clinton through a few haymakers and then he got combative and it went downhill. the most interesting -- i did not want to be a distraction and i was trying not to look at him. i was looking down the row. across the aisle from me to you, was tiffany, eric, and one was jr., was on his phone the whole time. that was against the rules. i couldn't see anybody in our side using the phone. they were overlapping and trying to balance things out. there were some people rolling their eyes on that side of the aisle when donald was talking. now when hillary was talking but when donald was talking. the point is, it would not shock me that there is a lot of

unrest and turmoil and you may see some major defections of the trump camp. that was a sense i got from talking to people there. and the follow-up from people since then. emily: that was investor mark cuban speaking to us from the dream force conference. now a story we are following, yahoo! is disputing a report debt it built software to scan customer e-mails for agencies. yahoo! says they worked at the less complied with government orders to scan accounts on behalf of the nsa or the fbi. in a statement they said, we narrowly interpret every request for user data to minimize disclosure. it does not exist on our system." yahoo! is under increased scrutiny for their planned acquisition. they disclosed a hack that exposed half a billion customer accounts. coming up, google ratcheting up the pressure on apple this week introducing two new phones under

the pixel brand. we will bring you all the details. check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com and on sirius xm. this is bloomberg. ♪

emily: welcome back to the "best of bloomberg technology." i'm emily chang. this week, google took its biggest leap yet into the smartphone hardware market. after outsourcing development to other makers, they are taking the apple approach and developing phones in-house. here's the chief of google's new hardware division. >> phones are the most important device we own. they rarely leave our side. they are literally most people's lifeline to the internet and to each other. day, am very excited to introduce you to a new phone made by google. we call it pixel.

emily: they took the opportunity to unveil a handful of other consumer electronics, including a speaker device to take on the amazon echo and a head set. joining us now to break down the entire google hardware family is julie aust and our bloomberg news reporters. >> the amazon echo like speaker is the most interesting thing. today, we expected the smart phone and that strategy. they announced new software development kits, two of them. one will connect to apps and the other devices in your house. they are going after that home market from two different angles. >> i don't think the hardware announcement today were that interesting. i think the most interesting thing that came out of today was them showcasing how good the assistant is and the strategy to put it on as many devices as

they can so it becomes ubiquitous. anything, anywhere, any time, i go to google first. emily: how about you? >> he began talking about machine learning and ai. it wasn't about hardware. the assistant was the motif that came through the entire event. we think it is better than anyone else has built. they think it's the next iteration of search. they think it's the next generation of mobile, the a.i.first world. they want to get into as many places as possible. emily: you spoke with rick today. let's take a listen to what he had to say. rick: a lot of this is about rolling out the future strategy of google around ai. machine learning and the google assistant. some of the hardware we have brought to market really showcases the capabilities of it. we are excited because it makes it so we can innovate faster and bring more capability to the surface for our users.

emily: i want to get on the phones. for so long, google has outsourced the production of phones and now they are doing it in-house by themselves. do we think this could be game changing to the smartphone market? android has a huge market share. google-specific devices haven't necessarily done well. >> i don't it's a game changer today. i think it's a game changer down the line. a lot of the google executives we talked to are indicating this is more of a journey. every year, google is going to do more and more. this year they are starting with the custom controller. it will make touch screen times more faster as well as new camera that works on the chip set there. over time, there will be more custom work and other chips. down the road, that will become a big game changer and cause concern between the android platform and google as a hardware company. >> unless you can control the

technology stack, you can't deliver this experience that they want to deliver. emily: why did it take them so long? >> it's hard to make money. the other part of it is google sells advertising. it doesn't sell to consumers. it doesn't have a market strategy for selling consumer devices or marketing to consumers. knowing how to advertise to consumers. there is a lot of challenge ahead of them. this is very new to google. to your point earlier, their previous attempts, as expected, haven't done as well as they would have liked. emily: they do have some devices on the market. chrome cast and chrome books, how have those done? >> chrome cast has done pretty well. the google home device has done surprising well. it was really cheap. that was part of the reason. with the new pixel phones, they're not undercutting apple necessarily. they've done what they've done well.

they have done affordable thrifty hardware. , they have not done mass scale high-end devices. emily: let's talk about vr. what they have unveiled recently is some big steps above google cardboard. can google be a huge player in virtual reality when you've got oculus and htc and other players that are so much closer? >> i think the potential for google he coming the de facto head set maker is there today. they have these headsets that cost $80. you put the phone into it and it works for these other players $80. have a combined solution that is hundreds of dollars. we saw one that you have to connect to a laptop stack that can range from $2000 to $3,000. the way google is doing it. you just drop the phone in there. emily: can it work? cardboard, come on. >> the screen could be better. some of the downloads were shaky today.

but i think if we are looking at this as a long-term solution to the vr concept, this route that they are taking is very promising. it's about getting the phones compatible with it. right now it's just a pixel. other android phones will get more functionality with the software update over the next couple of months. as of now, it's a bit of a picture into what the new reality might be. emily: how big is the market for this? >> there is a different question to be asked. i don't think hardware is the issue. it is part of it. you have to have content. there is media, social media, and gaming. google announced some things today around their intent to make other portfolios available. until there is content, we will not see consumer demand. i don't think whether it's priced at $80 or $320, you first have to have the content and experience there for the consumers. >> they announced today a partnership with netflix coming down the road. if you think about what

consumers would want, netflix is at the top of the list. hbo is at the top the list. youstube at the top of the list. right from the top, that hits a lot of territory for google and consumers. >> i'm skeptical of the fact there would be a bigger market beyond the niche gamers and enthusiasts. those might be the ones that are willing to splurge. what google has that others don't is mapping software. they introduced that today. there is potential for v.r. tourism, certain games we can use. we saw that with pokémon go, which is built on the back of google maps. that's probably one route where they can really carve out some substantial room in the market if they use those tools they have. emily: what about this home device? it's exciting. there has been so much optimism around amazon echo. they're later to market, but as they are with all of these things, how optimistic are you, julie, about it? >> i am optimistic. the google assistant is going to be so good.

at the end of the day, a wi-fi speaker isn't an impressive piece of hardware. amazon sold six million of these devices. it's a very niche market. what's compelling is if they can make the assistant part of it work and train consumers to think differently about how they access services, turn on services in their homes, use it for home control. as wit we look down the line three to five years from now, the possibilities are exciting what it can do. emily: where is apple? >> we reported a couple of weeks ago that amazon -- they're working on a home speaker system. they have prototyped many different versions. they have like a home theater set up on their cupertino campus to test it. i think the key thing is they are doing something sounds like it out of the apple playbook. if you want to use an app, you have to download the app and install it and accept the

plug-in. men it can start working through the siri app on the iphone. the way google works, you don't the apps.stall any of it just feeds through their networks. you can say call me an uber. it will just show up without me having to install the app. it will basically work on an as needed basis removing one of the big steps. that's very intriguing. >> that is google's ideal world. i think that's going to be getting a little clunkier. they have been making that request. there are a lot of app makers to say, no, we don't want to touch google data. if they can do that, that would be nice. emily: that was our bloomberg news reporters. meantime, google will reject e.u. charges it's operating a monopoly. the newspaper says the company will respond within weeks to three separate charges that it's broken e.u. competition rules.

the cases have to do with online search business advertising, and , android operating system. coming up, we will hear from xiaomi's chairman. stay with us. this is bloomberg. ♪

emily: a venture firm artup is doubling down on southeast asia with a new fund worth $50 million. that will focus on early-stage startups. he says the aim is to fund 200 deals and use the money for follow-up. this is the company's second fund in the region. it has invested in several companies. turning now to streaming, xiaomi set-top box is available in the u.s. they are entering a crowded space. major tech players offer products that stream video to tv.

one thing that makes the mi box stand out is it is internet-based live tv. we caught up with the c.e.o. and vice president of global operations. >> the way we do business, our d.n.a. is what we call innovation for everyone. it is this idea of bringing cutting edge technology to everyone by making products in large-scale and selling them at a small margin. we saw an opportunity to disrupt these connective spaces in the u.s. with this model. that's why we are partnering with google. we are here because these cord cutting phenomenons are going mass-market. i think it is the right time to enter the space. emily: sling is available on these other devices. if you go with the box, you get a discount. how many subscribers do you have? how many new subscribers do you

expect? >> we don't release these numbers since we are part of dish network. those numbers are released as total subscribers. we are excited about the launch of mi box. it has shown to be a tough innovator in china. i think this is a launch people have been looking forward to and been excited about. we are, too. emily: will it work with voice command? how will this work? >> it's a fully integrated experience. one of the innovative things we are doing with xiaomi is there's -- it will launch right into the sling tv app with live tv. is people talk about not watching tv anymore. why do i have a cable subscription? people do watch a lot of tv. content consumption is at arise. but they want to be their own programmer. i am going to buy a streaming box. but then what about my cable

service? will i lose that? what we have done by working with sling tv is put your subscription inside the box. what you get is what you had before, but you don't need a cable subscription. this is so important for the product story and why people would want to buy this product. out-of-the-box when you power it on for the first time, you go directly into live television as if it were a cable box. we have a special arrangement with sling, where the fest day, the left first day -- the first day you get to watch live tv entirely for free so you really know how well it works, how well it replaces your box. emily: cord cutting is on the rise. but it's intesting, because in china, live streaming is huge. it's far bigger than it is in the united states. can you describe that for me a little bit and how you expect live streaming in the u.s. to evolve. how will it get there? >> it's an interesting blend of old and new. live streaming in china has taken over both for the events

which is something we already know. streamingrsonal live of selfies is a big trend as well. we think we will see how much of that translates to the u.s. what's more interesting is the big live things you can catch on your regular television, now being available much more easily both live and on demand later. there's unbundling trends here as well that will accelerate this trend. emily: how do you see the market evolving? >> the pay-tv market is really in a state of transition. five years ago, pay-tv penetration was around 88%. today it is down to 80%. , we can see the shift happening where consumers are moving to more streaming and putting together their own bundles with different services that were not available before. i think we are just at the beginning of a long shift we are going to see. it's moving to streaming. emily: google unveiled google home.

will sling work on that? >> we look to work on every device. it's important for us to be on every major streaming device that people are using. emily: you can order this online but you can also buy it at walmart. is that an indication of where we will see future xiaomi products? >> we'll see. we're here for one disruptive product at a time. this is the first. we think this category is poised for disruption. we wanted a wide reach retail partnership, and google brought us into wal-mart. they've known the retail channels in the u.s. here for a long time. one retail channel is the place to start. it is a very wide reach one. we'll go from there. emily: that was the sling tv c.e.o. and vice president of global operations. coming up, go pro wants to clear the air about its sales strength. we check in with c.e.o. nick

woodman. this is bloomberg. ♪

emily: amazon is cracking down on incentivized reviews. these are when customers get free or discounted goods in exchange for reviews, which many shoppers use when making purchasing decisions. amazon previously allowed these critiques as long as the author disclosed the discount. the problem was it made or the mesh made it hard for sellers to introduce new topics with no prior reviews. they'd get buried in search results. last year, amazon filed lawsuits against a thousand people offering to write fake product reviews in exchange for payment. speaking of amazon, they are in talks with regulators to settle the european antitrust probe. the investigation deals with how the e-book contracts may be squeezing out rival distributors. any deal would have to be tested with publishers before it becomes final.

amazon is already the target of an e.u. investigation into its tax arrangements with luxembourg. gopro's new cloud connected cameras officially hit shelves on monday. the updated hero 5 line is its first refresh in two years. highly anticipated by investors, who sent the stock surging ahead of the launch event. september 19 in addition to the action cameras, they unveiled a long-awaited consumer drone. just days later, the biggest drone maker in the world came out with its answer to karma. this leaves gopro investors uncertain of sales again. brad stone set down with nick woodman and asked about the prospects. take a listen. nick: today is really exciting. a lot of hard work is being made available to consumers. they are the two most convenient gopro's we have ever made.

importantly they're the two most , connected gopros we've ever made. when you plug it in to charge, it can automatically offload any new photos to the cloud, to your account so you can access that footage with your phone and make an edit on the go. we are finally not just about the capture of great experiences, but we are now end-to-end storytelling. brad: what else is new? better resolution, i imagine, voice technology? is it cheaper now? nick: $100 less for the black edition. hero 5 black is $399, and hero 5 session is $299. that takes our best-selling session form factor, the original hero session is the second best-selling camera in north america. we've now made it 4-k and made it voice control. we've added the ability to automatically offload to the cloud image stabilization and a

, host of other features that make it easily the most easy session camera we have ever made. it's a great brother to the hero 5 black, which is just simply the best gopro we've ever made. brad: there has been some skepticism about your results, particularly since it has been a while since you refreshed the line. what does it mean for your relationship with channel partners. what do you expect to see this holiday season? nick: there is a misconception that demand has been waning. i say it is a misconception, because sell-through at retail, the rate at which our consumer customers are buying gopros off the shelves at the best buy and wal-mart of the world, that rate of purchase has never been better. that was with hero 4. brad: what went wrong? >> a two-year-old product selling at those rates. where people are getting confused is they are looking at ell in.enue, our s we have slowed down to clear the

channels to sell off all that inventory to make room for hero 5. 2016 was admittedly a correction year for us. last year we introduced too many , products at confusing price points. we acknowledged that and are cleaning it up. brad: are you expecting a record season? >> we have three cameras. we have the original session and hero 5 at 299. and then we have karma. brad: right, that's your drone. how big a part of the business do you expect that to be? >> karma will be $799, october 23 available. that is going to be a phenomenal contributor to the overall gopro ecosystem. our customers can now fly their cameras and capture incredible aerial and handheld footage. it is more than a drone. it is handheld stabilization. brad: it is foldable. since the announcement, you've got a fearsome competitor. they announced their own foldable drone.

interesting. they are pushing the envelope on some features. is this a zero-sum game? how do you expect their foldable drone to impact the market for karma? had and you crashed it one and you never returned. brad: for the record my brother , crashed it. but yeah, it's currently shelved. nick: we have made flying a drone extremely easy. we have incredible customer service with replaceable parts. we take care of you. we're a very customer-first company. if you ever do have a problem, we will take care of you straightaway. if it is technical failure on our part, we will replace it with no questions asked. flying a karma is going to be a mu different experience for people. much easier and consumer friendly. importantly it is more than a , drone. all of our competitors are making drones. if you want to capture aerial footage, that's all their

product can do. karma is more of a hollywood in a backpack solution. you can take it skiing, you can take it to the beach. if you don't even use it, it's a not a problem because it's so convenient it didn't get in your way having a good time. brad: being in china, they are closer to the supply chain. arguably they have a price , advantage arguably. does that outweigh the customer service advantage you are talking about? nick: i don't think so. because karma is $799. that's without a go pro. for existing customers, you can have what is arguably the most advanced yet easy-to-use personal filmmaking solution that has ever been. it rivals the technology you use here in the studio.

brad: easy that for existing owners? time, you caname get it bundled for $1099. even when compared to anything our competitors are doing, it is not only price competitive. it is even lower-priced of what we see being even by competitors. we think that go pro is delivering the most convenient drone solution, but also at the most attractive prices. brad: i want to talk about snapchat spectacle. is that a business you want to be in? what do you think of that product? nick: i think it's clever. it's inventive. canink the more companies encourage creativity and visual storytelling, the bigger the overall market grows. brad: do you see go pro spectacle in your future? nick: time will tell. emily: that does it for this edition of "bloomberg technology." we will bring you all the latest in tech throughout the week.

tune in on monday when we speak with the twitter cofounder biz , stone. we will see you then. this is bloomberg. ♪ . .

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