disclose payments to foreign governments. ahe first to take advantage of processor's -- -- poster puzder testified thursday. the senate confirmed linda mcmahon's nomination to lead the small business administration. she sailed through with a vote of 81 to 19. the white house will start public stores after months of shuttering the building to tourists, according to melania trump's visitors office. that usually stop tours during the presidential transition, then start them up more quickly. medicine square garden -- madison square garden has banned to charles oakley after a competition with security guards after the game. a reconciliation was facilitated by nba commissioner adam silver

and michael jordan. news powered by 2600 analysts in 120 countries. this is bloomberg. ♪ >> this is "bloomberg technology ." mp bump. yet for the tru hitting highs led by tech weaker apple. -- fromfrom apple apple's coo. a 6 billion nuclear write-down at the beginning of its profits for the japanese giant. u.s. stocks beginning a record run.

bloomberg stocks reporting all day in new york. >> great to be here with you. it is pretty amazing. yet another day of simultaneous record highs, the dow, nasdaq, and s&p 500. one of the common factors is apple, putting in its first intraday record high sense 2015, 2 record highs, 2 record closes in a real. behind this is continued bu llish chatter about the iphone 8. big turnaround from the disappointment on the iphone 6s. you were just talking about the trump bump. out of the election, tech was a losing sector.

this shows a lot of the technology shares out of the election. >> what am i looking at? >> there is a lot going on. thatain point is orange, is apple, hitting new highs, up 18% on the year. other stocks are trading closer. this goes back to the election. tech initially was week out of the election. >> apple has really picked up the pace. >> tech is the top sector this year. much of this is apple in orange. >> i have been through a few bubbles. the dotcom bubble looms large. the big companies were dell edward, and cisco. -- dell and worldcom and cisco. >> i have not heard worldcom in a while. district -- investors are looking at earnings on $11.5 billion.

is whether or not the company can transition from those legacy networking businesses toward a new businesses, security, and software. tomorrow, we will see on this corner. it looks like it is low bar. for cisco.ctations it is amazing to see tech -- again. we have been live from the goldman sachs conference in san francisco, where the top bankers from goldman and investors converge with tech titans. , as want to get your sense

an internet guru, reagan a b ubble? is this back to 1999? >> i think you look at where valuations are now, these are different companies. amazon is generating millions of dollars in operating cash flow. many of the companies that are public are trading well below the valuations you have seen historically for the internet sector as a whole. there are some spots within the private internet space, where you have valuations that have the same characteristics you have seen. even that over the last year has come off in a way that does not look like a bubble. >> let's look at amazon,

disappointing fourth-quarter forecast. is amazon investing in the right areas? >> sure. if you look at two of the biggest trends in technology, the shift of retail dollars from traditional retail, what that's doing to traditional retail, and cloud computing, one of the biggest stories in technology right now. amazon is exposed to both of those. the money they are spending on that -- we think that is money well spent. historically, amazon generates one of the highest cash returns on cash invested in any company in the s&p. with a company like that with any kind of track record is investing money, that is a good thing. >> i hear you are the man to talk about a.i. with. how is this going to change everything? it seems like amazon is leading the charge. amazon is doing

making investments in a.i., what google is doing, we are first in terms of inning this technology investment cycle. nextis sort of the electricity. it is going to make everything better. it is going to make everything more productive. it will run from everything through alexa, to the cars that you use, to the way that risk is priced by cardica companies, how farmers are planting, and ultimately we think that has the potential to kick off another wave of tech driven productivity that we have not seen in the last 15 years. >> can you put a number to how much this will affect gdp? >> we estimate there is over

half $1 trillion impact to the economy from a.i. over the next 10 years. >> i have to get your views on netflix. you is an m & a target, think, or will it outgrow at a standard pace? >> it is a potential target. i don't think it is a company that wants to be sold. i think they see their opportunities bigger as an independent. when you think of how disruptive they have been to all of media, when they become part of a bigger technology platform, it feels like that is missing out on the payoff on this investment they have been through. it is not like the company has done incredibly well. when you think about the scale of this global media coverage they have built, this content environment they have built, i

don't think we have seen nearly the past yet -- nearly the payoff yet. >> we know net neutrality has been looked at, by the head of the new fcc in particular. >> sure, they went after that in pretty detailed ways prior to the title 2 neutrality implementation. they struck deals with verizon, comcast, and at&t that at least addressed ultimately what neutrality meant for them. it meant higher costs, but did not have enough of an impact on their financials to matter to anyone. for netflix, the main thing is content. >> another cost for amazon as well. thank you so much for giving your time at the goldman sachs event. >> we continue to watch to

shiva. -- toshiba. tuesday it was supposed to explain how much trouble its nuclear business was in. 2 hours after the time of the expected report, toshiba said they needed another month to finalize earnings. a provision report shock full of surprises. thosiba says it will take -- toshiba says it will take a $6 billion write-down. it may have to sell its nuclear business altogether, also selling a majority stake in its memory chip business, what used to be one of its you break shots. -- its few bright spots. who created the man the payment app beloved by millennium -- by millennials. this is bloomberg. ♪

cory: amazon web service unveiling a videoconferencing project called amazon chime, payment at the business market, competing with existing products from microsoft, cisco, and lock me in. logmein. bad news for logmein. amazon revealing how much it is bringing through its private membership program. it could be a big deal for investors trying to give clarity on this secretive company, and its potential to create cash. this is big stuff. really, all of the component of amazon's business are a black box. they are reluctant to break down

on anything, specifically unit costs, and how prime shipping is supposed to work. >> it is amazing how little we know about how amazon makes money. what they disclosed in a 77 page annual report is the revenue that they generate from subscriptions, including things like prime. cory: what did we learn? >> we learned that generated more than $6 billion from subscription services. theou do guesstimates from 99 dollars annual fee for p rime, it seems like that has to 70 millionon customers globally. we don't really know, but there has been estimates over the years. cory: that is just the membership. that does not show you how much prime members are spending.

they go through the trouble to get prime members, we expect those people would spend more, w other than kno surveys. >> this just raises more questions than it answers. and we don't know the value of a prime shopper versus a nonprime shopper. can we don't know how much those people cost amazon. 2 day shipping is not free. cory: they give us shipping losses every quarter and annually. but we also know the return rate. we don't know how long people stay with that business. that $6 billion, about 4% of revenues. peoplet know how money -- how much money people are paying every year. >> the only people know her

inside of amazon. we are not going to get a glimpse of that. saidhave sent pr -- have prime is one of the three pillars of their business. cory: we have a chart on shipping costs right there. >> as a percentage of revenue, it has continued to go up. i think it is 12%. creeping. cory: sometimes it can reflect more rising gas prices. if you have an amazon prime number who buys more stuff, then the shipping losses might get greater. earlier we were talking about cash conversion rates. designed tobusiness create profit, but it is creating cash. that is what it does in excess amounts. >> they have very tiny profit margins, but they are good at convergent. cory: and the tv shows are

getting good. do you have a favorite on amazon? >> i was a fan -- i am going to blank on it. cory: you have to check it out. think you very much. -- thank you very much. chainwe measure block pressure under the trump presidency. this is bloomberg. ♪

cory: back to the goldman sachs technology conference in san francisco. blockchain among one of the most important players. a san francisco company using blockchain to settle with some of the world's biggest banks.

we are sitting with a former aol executive. >> he is a man that you know well. i am sitting with him right now. we were talking about potentially the fact that all of this, blockchain is in hype mode. overhyping it? >> it is not necessarily a solution for everything. there are examples where it is a perfect use case. payments, for example. you have 2 people trying to settle a transaction without a central counterparty. bank inhe third largest india last month, as well as the largest in middle east going into production. >> what about international clients, international expansion? is that something that you foresee, or will you not be able

to get into the conflicts of interest here? >> we work with 90 banks worldwide. there are about 8000 swift enabled banks of 23,000 banks around the world. we have a long way to go. we clearly think we are solving a problem on cross-border payment. it is amazing how much time it takes to send a payment with your own money. >> don't i know it? it is painful. brad: i made the joke, it is easier to send $10,000 by taking it with you on a plane than sending it through the banking system. coming up we will see the banking sector compete with amazon and google. they have to compete with technology like blockchain solutions. >> i want to understand how these competitors work. is swift still a key competitor?

startups in germany. how does it work for you? we think they are solving a problem that the banks should be solving. when we look at the payment stack, a lot of things are happening at the top level of the application layer, infrastructure is saying -- is all the same. apple pay is just a different way to swipe your card. everything behind the phone is an already existing infrastructure. we have to reset the infrastructure. that is what we are focusedthat. >> is blockchain being adopted en masse by bnanks? what do you think is stopping that? brad: we're getting a lot of adoption and activity. it takes time. banks have a longer -- have a

lot of other ip projects. we have been saying, let's talk about this in q3 or q4. we have had a great run. morechain has become hyped, we get more interest and attention. for now we are focused on the customer. if we can solve more of their problems, we will be in a good place regardless of how we see the future unfold. >> i know that you deploy bitcoin as a crypto currency. is that about to come crashing down? brad: 2 thoughts on that. some of the bitcoin users have with fiat currency. we think banks will be at the

center of this value. while we're there is a role for digital assets, we don't think that is the end all, be all. we are solving a liquidity challenge for banks. the price of bitcoin has been very volatile. banks do not love that. the only people who love that are speculators and traders. we want a nice, stable asset. the asset we work with is called xrp. >> we had cory johnson just talk about "the peanut butter manifesto," which came out about your previous employer yahoo!, maybe that it spread itself out too thiny. brad: it has been amazing that it has been 10 years. ago,i felt like 10 years and i very much was a passionate yahoo! employee then loved my experience there, i felt like it

was increasingly spreading itself thin. like with any other company, you have to understand your true rth, the problem you are solving for your customers. they were a media company, advertising company, and they were great, but not the best at all of those. other companies come in and steal mail and media. i think yahoo! should have been focused on what they want to bring to their customers. this deal will go through, and they can get yahoo!'sm your -- from consumer base? brad: it has been a rough ride for the young -- the yahoo!

team. i think there is great synergy and great value to be created there. i think tim can continue that by putting those 2 assets together. >> 2 assets you worked on. great to have you. cory: thank you as always. hear from the greater of the payment app. daniel cirillo announced earlier this month he was going to resign. an exclusive interview at 8:00 a.m. eastern. this is bloomberg. ♪

>> you are watching "bloomberg technology." iraq started deploying units to the west side of the tigris river in preparation for a renewed assault on mosul.

the eastern side of the city has been retaken from the islamic state. iraqi special forces are in place southwest of the city. malaysian officials have confirmed the death of the brother of north korean dictator kim jong-un, killed at kuala lumpur international airport while waiting on a flight. he had been reportedly critical of his brother. prime minister of israel benjamin netanyahu landed in washington ahead of the prime -- ahead of the high-profile meeting. he said he would mend ties with the u.s. in a clear and prudent manner. somalia's breakaway territory wants an exception from president trump's travel ban. somalialand considers itself independent after breaking away from somalia in 1991. london will hold an outdoor

on february 26, the same day as the oscars. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. just after 5:30 p.m. tuesday in new york. six: 30 wednesday morning in hong kong. we have a look at the markets. china will be in focus across the region today as new credits surged to a record high, aggregates finance surging.

despite authorities efforts to deleverage the economy, that continues to drive chinese growth. we are looking at a couple of asian tech giants, toshiba in focus after announcing it would write-down billion on its nuclear business and its chairman will step down its billing third-quarter earnings release until march 14. prosecutorsfocus as will decide whether to issue an arrest warrant for the heir apparent on bribery. more "bloomberg technology" coming up next. ♪ >> this is "bloomberg technology ." cory johnson. networks.cquire two

caroline hyde is with the paypal ceo, who helped turn then mow into a millennial favorite,'s processing 7.6 billion in payments last year. caroline? great $233ndeed million being put to work. how does it filled out paypal? providers a built pay for the underserved. paypal from the beginning has been a democratize or of money, and we think a lot about how we democratize the management of money around the world. the underserved is a big part of how we think about bringing folks into that democratize asian. we think of bill pay as a critical service for those folks. also the underserved, we think about the population of more

than 1/3 of the u.s. population, people around the world are unserved by traditional financial products. we think we can get a pathway not only into financial inclusion, but the digital economy. we think about tio as part of our broader vision around how we democratize the management, movement of money to consumers around the world. caroline: are you thinking about bringing consumers from tio on two other paypal products? >> so, with tio you can walk into a store with cash and make a bill payment to one of their 10,000 plus billers and 65,000 locations around the u.s. we have paypal cash that we announced a few months ago, where you can walk into a 7-eleven, load money on to your paypal account, and though you may have not had a bank account or car, all of a sudden you have money in a paypal account and you are part of the digital economy. you might not have been able to make e-commerce purchases

before, but now you can walk into a 7-eleven and with paypal you are now part of the digital economy. caroline: his screams to me of underserved, unbanked. how does this feed into the internationalization of paypal? >> nearly 200 million consumers around the world. 2 billion plus consumers are considered underserved, and so we think about ways we can serve those folks and bring them into the digital economy, give them access to financial inclusion. monthsm we acquired 18 ago also has international remittances, oftentimes serving the underserved. we think of this as a great complement to what we are doing, with access to the underserved worldwide. caroline: you join paypal's

foreign acquisition, months ago brought then mow into the larger -- what is the mindset of paypal about acquisitions? is it only that area that you want to make elsewhere to build up? huge focus in mobile. we did $100 billion of mobile, part of braintree and then mow coming in. -- venmo coming in. we think there's a huge move to consumers -- those are areas that are really interesting to us and areas that led the way that we want to continue to push. we think about financial inclusion for most consumers and merchants is really interesting to us, places where we will continue to have a lot of focus. we've also look to build organically in great ways. we did 11 plus strategic partnerships, just down the course of the last year or so. that included not only visa and mastercard and traditional

banks, but we are partnering to bring services there. also folks like facebook that are a key provider inside of facebook, i google play, and other technology partners we are working with, but we are really bringing that sort of start to really drive on mobile, financial inclusion and partnering with the broader ecosystem. caroline: that was quite a change when you went inside the visa card. how is that coming to fruition? many feel financial inclusion ad partnering with the broader ecosystem. that paypal was leading the charge years ago and it dropped the ball and let other companies get ahead of it. -mastercardsa

agreement help win back some of that space? that paypal was broadly we've always had a common interest about fighting cash is the common enemy and bringing that into the digital world. i think we've led the way on that in partnering with visa and mastercard and issuing banks. caroline: talk to me about your baby braintree and the competitions out there. how do you fend off the competition? >> both braintree and venmo, yearstanding starts 6, 7 ago have grown into something beyond our wildest expectations with a huge portion of the best next gen conference companies in

the world. braintree's continued to do really well and grow nicely there. ofmo now, either run rate $20 billion plus annually has just about every sort app app you canment think about there, and most commerce apps to go with that as well. both will continue to grow wildly. just need to be able to get my u.k. bank account juse to get my u.k. bank account on venmo. you so much. >> great to be here with you. caroline: coo of paypal. we will be speaking to dropbox in a moment. cory: thank you very much. everything paypal, from truck's travel ban to his .urrent company

coming up, we will feature bigger attention to an interactive tv function. that is on bloomberg go. see our lineup, dig into the companies and functions we talk about, and become part of the conversation by sending us instant messages during our shows. it's only for bloomberg subscribers. this is bloomberg. ♪

cory: microsoft has a new plan to fight state-sponsored cyber hacking. the microsoft president brad smith wants to see individual technology companies provide more security for customers. microsoft currently fighting the u.s. justice department over

customer data in 2 separate cases. he will ask the former nsa director on tomorrow's "bloomberg technology." caroline hyde standing by with a member of the so-called paypal mafia. that is max levchin. caroline? caroline: yes, max with me now. i was just reading a piece where you were quoted saying you live in the land of giants. midget.at the moment a how does a firm which you have branded on your shirt become more than a midget and rival the giants? max: by growing as quickly as we has been, the road is heating up nicely. but we are not particularly focused on measuring ourselves up to any one particular giant. we are much more excited about creating value for our customers, our merchant partners , our partners in the financial

industry. wrongg trend has been the one where companies, many companies walked out and say, everyone here is a bunch of idiots. we are not going to be anything like you guys. and that's just wrong. american financial system is probably the single best one in the world, and being a member of is a central part of our plan and everyone who wants to be around for the long term. i don't think i need to jump into being a giants, but i want to grow my way into the firm. caroline: talk to us about that growth. what products will you be looking to next? max: we are focused on our consumer credits view of the world. we are excited about bringing out a bunch of new, interesting flavors to our product fairly soon. we have brand-new things we are working on. i'm afraid i have to keep them

for the lunch, a secret. but i think delivering value directly to the customer is something we are excited about. at some point we will create things that speak directly to our customers. caroline: they say the u.s. is the single best country when it comes to its banking. what about the regulation? we're looking at the registry , theonment becoming easier dodd frank act has changed in some way. is this a net positive or net negative? max: it depends on the outcome of the changes. around the rhetoric regulation, cycling innovation, is not untrue. i happen to agree that loosening some of the tight grips that we have put on the industry right 2008 crisis, it's been

a while. i think we can start being a little bit more open around lending, 2008 a fair amount of t was put into dodd-frank -- and all-out fullwing sail is also a mistake. it's a little bit more nuanced. regulation is important. it's necessary. the market does not always correct itself quickly enough. it's important to engage with the regulators as they reshape the rules right now. caroline: is it important to engage with the new administration as well? max: i think so. i think it is important to engage with a democracy if you believe in a democracy. i think sticking your head in the sand and saying, i don't like what happens in washington anymore, is foolish. as leaders and citizens we have a responsibility to be part of the conversation, not run away from it. you can state, i disagree with this, be it social or economic

matter. running away is not an option. do you feel that the relationship between the white house and silicon valley is becoming better and more open ?ith colleagues like musk or do you feel that with the backlash of the travel ban, walls are going back up? max: the honest answer is i -- the scale on which we measure the outcomes, at least in quarters, not years -- it's too early to tell. not been shy about executing on its plans and creating controversy. they will be judged by long-term impact of the rules, and that will play itself out in time. caroline: we hope you are not shy about executing on your plans.

he will come in cs when you have things to announce. vchin, ceo of the firm and many other things that go on in his work. cory: thank you very much. while disney maker studios reorganizing its online unit after disney cutting ties with youtube star cutie pie due to some anti-somatic comment that content in his youtube videos pretty disney says it is unrelated to the decision to drop cutie pie, who is one of the most subscribed to on youtube, brought in millions of dollars of advertising. cutie pie made about $50 million youtube'sself, as highest-paid star. membereral reserve board , go to man on enforcing banking regulations, but was leaving the fed. catch that exclusive conversation on bloomberg daybreak: americas print coming up, shares of fireeye rose.

you will hear from the company's ceo. this is bloomberg. ♪

>> ross tek shipped more than 300 servers with russian-made microchips. it is a loss for ibm. these shipments are placed in quitman made by abby -- ibm and other foreign vendors. in september, the reported domesticin september, the repord domestic weight -- the messick made software after president vladimir putin called on russian authorities to reducein septembd domestic weight -- the messick made software after president vladimir putin called on russian authorities to reduce their dependence on foreign technology. fireeye's largest shareholder

continues to stand behind the cybersecurity company and plans to buy more shares. shapiro says it's too early to judge fireeye's ceo, took over last june. caroline hyde spoke with that ceo. i have to harken back to the 1990's when i was in the air force straight one of the things we did in the air force is we said, there's the wing commander, the one star generals challenge. the escalated the responsibility of if there's a security breach, here's the one accountable. what happens when you make the head of an agency accountable for every security is it gets taken seriously. i think that will be part of the executive orders. cybersecurity, if there's a problem, there's something that goes wrong, it is you that is held accountable. that will make a difference. caroline: what about the spending on cybersecurity? it seems to have lagged. >> i don't know. when it comes to cybersecurity, a lot of deterrence in cyberspace. there's also a lot of deterrence outside cyberspace. it's a pretty broad swath of things. what is your opinion

on where these attacks, threats are originating from? michael flynn resigning from the national security -- is national security adviser. it looks as though perhaps the desire to become closer to putin will become slightly less within the white house. >> i'm not really sure. i have observed what russia does , they do cyber operations like most modern nations do. i do not think that will change. you will always see cyber operations by modern nations. it is the second oldest profession, espionage. caroline: are they growing in veracity, in pace? change. it i first started responding to breaches out of russia in 1995 when i was in the military. i seen this for several decades, 2014 is that changed in

2014 is for the first time in my career, we responded to breaches that we introduced to the russian government that they did not go away. we felt it was the russian government, and they let us observe what we were doing. forensics changed, the fact that they did not go away, we are targeting a little broader. the reason why forensics went down, it's sort of borader, -- than they are you stupid they started hacking and potentially leaking documents. we see the rules of engagement change over time. and i think that will just continue. caroline: i'm going to bring it back to the administration. the assistant in terms of handling counterterrorism, is he the right man? he certainly has experience with cybersecurity. >> i've only spoken to tom one time. we had a great conversation. he's talking to the right people. lydia folks have been in cybersecurity for 15, 20, 25 years. they get to see on the front

lines what the adversaries are doing. caroline: how does a company like fireeye capitalize on the sudden surge, whether it is media perception, the real nature of more and more? >> one of the things we've always wanted to do is respond to every breach that matters. that's how you learn what every thread actor is doing, and you can see firsthand how is our technology being evaded, how are we being circumvented? that is a strategic thing for a straight everything you see the threats rise, you see fireeye were involved in figuring out what happened and what to do about it. when the threats are big, you want surge, whether it is media perception, the real nature of more and more? to have that same knowledge. no matter where we are on the globe, if the threats innovate a little bit in the united states, the middle east pops up trade you have north korea doing attacks. the middle east is a hot zone of cyber activity. cory: that was the ceo of fireeye speaking with caroline

hyde. that does it for this edition of "bloomberg technology." last year we talked to gary cohn, who went straight from goldman sachs to the white house. david solomon will join us on "bloomberg markets." all episodes of "bloomberg technology" are live streaming on twitter. weekdays, 5:00 on wall street, 2:00 on the west coast. this is bloomberg. ♪ ♪

♪ from our studios in new york city, this is "charlie rose." evening. i'm filling in for charlie rose. while the country remains divided on the new administration, we can all agree that president donald trump is like no other before him. many of us laypeople keep up with the news daily, but it becomes increasingly difficult to separate fact from spin and parse out what his policies really mean for the country and world at large. joining me to discuss the impact of donald's presidency are maggie haberman of "the new york times" and cnn, keith oberman, and republican strategist ed