tv Best of Bloomberg Technology Bloomberg March 6, 2017 12:00am-1:01am EST
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>> i have an update of your top stories. japan issuing its highest possible alert after reports that north korea launched several missiles this morning. tokyo says four were fired, they flew about 1000 kilometers across the east sea. south korea's acting president has called it a grave provocation. says cutting excess capacity is its top priority for 2017 and beyond. the policymaking body says private enterprise makes 80% of chinese jobs and says capacity cuts in areas such as coal would improve the environment. sources are telling us that
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general motors is ready to announce the sale of the struggling european union. is said tor vauxhall be worth about $2 billion u.s. it would give gm an answer from a business that has lost it more than $9 billion from 2009. breaking news right now -- a prosecutor accusing samsung of conspiring to hide bribes. we will continue to follow this story and give you more details as we get them. we are watching a live picture there out of seoul on these announcements. again, a prosecutor accusing the samsung heir of conspiring to hide bribes. more on that later on. this is bloomberg. ♪
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caroline: i am caroline hyde. this is the "best of bloomberg technology." we bring you all of our top interviews from this week in tech. coming up, snap. the big picture. we get you up to speed on the trading day debut as tech ushers in its first ipo of the year. plus, travis kalanick gets his close-up, and it is not a good look. how uber's ceo was caught on a tape in a video handed over to bloomberg. we head over to barcelona and the annual mobile world congress. what the new sec had has to say about net neutrality changes ahead. first, to our lead -- snap wrapped up its first day of trading thursday. shares closed up 44% from its listing price. it reached a high of just over $26. it closed at $24.48. the maker of the disappearing photo app ended a long tech ipo drought. will its debut open the pipeline for other companies? we caught up with bloomberg ipo reporter alex barinka and sarah frier.
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>> it seems like the sweet spot. if you think about the range, a typical ipo you like to see 20% to 30%. this one will have more buzz baked in. twitter was 70% plus on day one. facebook, glitch, was less than 1%. somewhere in between seems like the sweet spot. when i look at trading and how the stock slithered around that $25 mark all day, it was stable. there was not a lot of swinging going on. we saw it selloff towards the end of the day down to its closing price of $24.48, but it seemed like a decent way to go out in your debut. no one is complaining about the return for investors. >> looking at this ipo scoreboard, you look at facebook now almost triple its initial ipo value. twitter on its debut opened up more than 73% but after year was down 10%, now down 65%. it is worth remembering that what happens on the first day of
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an ipo does not always remain. talk us through the managing of expectations. the roadshow was not all smooth. there were some bumps that they had to iron over. many questioning the user growth. >> absolutely. this is a company trying as hard as it can to not set up those comparisons to the companies you just compared it to, facebook and twitter. this is a company that does not want to be judged on its user growth, but it will be judged on its user growth. that is a metric that slowed in the fourth quarter. if you don't have the users, you can't make the money off the ads, but snap's argument is the user engagement on its app is so immersive and so frequent, it kind of does not matter the quantity as much as the quality. >> 18 times being logged in a day, that is pretty amazing statistics. you and i were down on the stock
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exchange, it was a frenzy rid -- frenzy. goldman sachs had their role cut out for them. they were stabilization for the entire trade, and they took their time. >> they did. that is kind of what they are known for. what i can tell you now is, you saw bobby and evan ring the bell. we were both there for that. i disappeared, chasing them down, because they went over to goldman to watch the first trade happen. they had to work through that, and the shares finally started trading at 11:19, so you can see the gap between the 9:30 open. it was so important to find that sweet spot where they thought the shares would trade out to get this pop. you saw them price at $17 a share, even though our sources say the deal was 10 times oversubscribed. maybe they could have priced a little higher, but if you think about the company's impetus for pricing it at $17 instead of making, let's say, $200 million more at $18 a share, doing that kind of rewards the shareholders
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who are willing to take a bet on them on listing day, saying we will give you a little extra wiggle room for your return. even though we are not taking so much money off the table, $200 million, so we can ease our way through that in trading going forward. >> sarah, you were out there in silicon valley. so much hope was riding on the success of this ipo and how it trades in the next few days, weeks, months, years. there are other companies waiting to enter the public market. how do you think it has been digested in silicon valley by the investor base and startups? >> this is a high-stakes ipo, because there are so many private companies that have ballooned in valuations into the billions and in some cases tens of billions, companies like uber. people have been waiting for these companies to go public, but it has not been necessary because there is so much capital available to them on the private market. also, the markets were a little
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bit volatile. they are looking at this snap ipo, a big company, really the biggest social media ipo since twitter, and saying if they can do it, that shows there is an appetite on the market for these kinds of deals and for highly valued stocks. >> alex, you are talking to sources already. what are they saying? are they lining up who they should be talking to next? >> basically yes. to sarah's point, the average company is staying private for nine years. snap is younger than that. that used to be the ammo for companies going public. they would go public when they were less mature. that hasn't been the case these days. snap is going against the grain by going out as early as it was, and there has been these arguments in the past year where the buy side in equity markets has been risk off. they want to see more profitability, more stability. but snap is coming out with an unprofitable company whose business model is only probably
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about six quarters old, and the deal itself did well. there are still question marks about the long-term returns, where the stock goes, how the company fares, but this is a bit of a proof point, saying, maybe staying private forever is not necessarily the best thing. maybe having your judgment day out in the public market is just as good as doing it privately with basically the same investors, these big crossover names. >> uber, airbnb -- sara, you also cover facebook. the question marks that alice is putting out there. one of the questions is, they can copy what they do and do it better with a bigger user base? >> they can and they have. instagram in august copied one of snap's most popular's feature -- most popular features, the stories feature where people can create daily reality tv shows of their lives. this is a product people are now using on instagram as much as on
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snapchat or maybe even more by this point. this will continue to happen. facebook's app whatsapp is a popular chat app. more than a billion users over the world. it had a similar feature added earlier this year. facebook is considering doing it too, so this is a constant drumbeat of copying snap. yes, it does harm the potential. we will never know how much faster they could have grown if it weren't for that. the company does not attribute their loss of growth to instagram, but it is certainly interesting. one positive side, i want to point out that advertisers say it is a little counterintuitive -- advertisers say they can actually justify buying snap ads because the format is now the same as ads they can buy on instagram. caroline: bloomberg's alex barinka and sarah frier. still ahead, we will stay on the story of the week, and we catch up with one of the first
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investors in snap, jeremy liew , partner at lightspeed venture partners. the new york stock exchange president tom farney discusses snap's trading debut. take a listen. this is bloomberg. >> i take great comfort the stock opened at $24 and is trading smoothly around that number. that is exactly what you want on the first day. especially with a large ipo. ♪
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snap open to strong on its first day of trading. ending the day on its initial listing higher than its original listing price. a number of silicon valley venture capital firms will make a small fortune from their investment, especially lightspeed venture partners. it was one of the first investors. it began as a $485,000 investment. we caught up with the very first investor, lightspeed investor partner jeremy liew, and asked what made snap such an attractive investment. take a listen. >> when we met evan and bobby and heard about their vision, they talked about how there was something missing from social media, how it had almost become like a highlight reel for your life, that was creating performance anxiety for people. unless they were looking pretty and perfect, they were not putting themselves on social media, and that meant that instead of being able to see that 360 degrees of someone's life, they are getting a little sliver.
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what snapchat did was to bring back the spontaneity, emotion, and authenticity of communication that people have always had with their close friends. >> it is quite amazing. you then committed to two subsequent rounds, more than $8 million. what did you see in terms of the growth, what potential, that now the market is questioning, do you still see in terms of growth potential? >> when we first met the company, they had less than 100,000 daily active users. most recently it is up to 158 million daily active users, so and has certainly grown a great deal. what we saw at the time was this amazing engagement. people were using the app many times a week, many times a day. that continues to be the case. today, people are now opening the app 18 times a day. when you see that, it has become a habit for people, and when you become a habit, you can build really interesting and powerful companies. >> many feel the growth has fallen below 60% in the last quarter of last year.
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is that something you think will re-accelerate? >> when you become part of popular culture and when you see that user base aging up -- so it started off with mostly young women when we invested, mostly teenage women, teenage girls i suppose, but today, you see that has been spreading to people in their 20's and 30's and beyond. as you see that broadening, you gain a lot of confidence. >> what about geographically speaking? they have committed to the developed world only. they said you need high-speed, powerful phones. where else other than the united states -- we are almost hitting saturation point when it comes to the u.s. do you think there is more room to grow in the united states, or where else geographic? >> if you think about the place that have high-speed internet connections today, the u.s., hash america, which i think 70 million daily active users. europe is also big, and the rest
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of the world encompasses more parts of asia that have more , parts of thecoms middle east and some other areas as well. >> do you need to extend past gen x, millennials? the parents tolure to snapchat? >> if you look at norway, back in the fall of 2012, snapchat hit the top three in the app store for norway. that was the one place it got big faster than the u.s., and there you see it being used by people all across the spectrum, in terms of age and gender. it has become embedded in society. that gives you confidence that this is something that can become broadly used by everybody. >> what about hardware? how much does that become an important factor? >> the spectacles are fine. i was actually just wearing them this weekend. i went skiing with my kids. it was the perfect way to be in
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the moment and capture some of those memories without it being intermediated with a phone between you and the experience you are having, so it has been a terrific experience. >> jeremy, i have to ask you. there has been a lot of reporting about your own relationship with evan spiegel. how is your relationship with the business now? some of the lack of shareholder control of snap has been lifted was in part because of some arduous, onerous point of view you put on as seed investors? do you agree with that coverage? >> over the course of five years, there will be friction in every relationship. what is more important is whether you can work through it amicably and find a a common solution everyone feels good about and you can work towards a common goal. we did that with snapchat. the ipo is not an end goal, but an important milestone for the company and one that i think is worth celebrating. >> do you think the restrictions
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you put in place as a seed investor were onerous? or is that part of being an investor when you are going into these very young companies? >> we were clear that we were very interested in what they were doing and would love to continue to invest in the company in the future, and that is what we have been able to do. caroline: that was lightspeed venture partners jeremy liew. now to another big tech story this week -- uber fighting battles on many fronts. this week started off with the senior vice president of engineering resigning after the ride hailing company learned of sexual harassment allegations from his previous job at google. he has denied the allegations. on tuesday, bloomberg obtained a video of uber's ceo travis kalanick boasting of the company's tough culture before parading a driver who asked him about falling fares. >> you know what? >> what? >> some people don't like to take responsibility -- blame everything in your life on somebody else. >> just enough money for a phone
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card -- >> good luck. caroline: travis kalanick in an -- issued an apology in an email to staff -- "it is clear this video is reflection of me and the criticism we have received is a stark reminder i must fundamentally change as a leader and grow up, and this is the first time i have been willing to admit that i need leadership help, and i intend to get it." it is the latest in a series of embarrassing incidents for the ride hailing giant. bloomberg's brad stone and selena wyatt caught up with a venture partner to discuss. >> uber's corporate culture has been in the news lately ever since susan fowler, a former engineer, wrote a pretty scathing blog post about her experience with the company. we received basically a dashcam video from a long time uber driver who is unhappy with the direction the pay for drivers has been going. he sent that to us. have a listen. in this conversation which took place on super bowl sunday,
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travis is talking to some friends about the culture and how the company is doing. have a listen. >> my years coming up -- [indiscernible] >> so ryan, you have had to council many a ceo and founder through these unflattering moments. what do you tell them when they are in the vortex of bad news? mike uber is right now? >> it is true for any company. in any crisis that happens, it is about truth seeking. how do you get to the root of what is going on? know that most of the infrastructure and the company around you is there to hold that information away from you, so you have to be aggressively looking for that truth and trying to figure out how to solve it as quickly and communicate as clearly as possible. >> i can't say we thought a lot about whether to write this story, but it seemed to me that travis' personality is central to all these questions.
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this is a company that has changed how cities work. he is showing some of his pugnacious personality. have a listen to the second clip where the driver challenges travis about issues around driver pay, and he responds somewhat forcefully. >> you know what? >> what? >> some people don't like to take responsibility -- they blame everything in their life on somebody else. >> even enough for a phone card. >> good luck. >> brad, that was some pretty surprising stuff. what do you think this reflects in terms of uber's culture? is there really a trickle-down effect? when you have a ceo saying pugnacious things like that, what does it mean for the overall company? >> this is why the company has been successful. travis doesn't suffer fools. he has bowled over every regulatory and competitive challenge in his way. the issue is that he has to be a politician now. he has to deal with these
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sensitive constituencies. here is maybe an example of him not putting his best foot forward. ryan, i'm curious to hear what you think. you are friends with some of these folks on the uber management team. you have known travis for a long time. do these ceos and founders have a responsibility to be less pugnacious and more politically astute? >> i think any company that ascends in the way they have, there is a point where you are fighting as an outsider for a long time. you are someone everyone else looks at. there is a transition that needs to happen. some make it and some don't, and they are going through that transition now. i'm curious to see, you guys get something like this dropped on your doorstep. how do you think about the process of assessing that and whether you publish it or not? >> i mean, uber is a utility now. it has changed the way cities operate, and travis' personality and uber's culture is so very much in the news right now. so it seemed to me that when we
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got this video, we really did not have a choice. it is very much topical, and it is another one of these unscripted glitches about the man and the company. caroline: still ahead, we head to barcelona and bring you our interview with the federal communications commission's new chairman ajit pai. this is bloomberg. ♪
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regulators were there, too. including the federal communications commission's new chairman ajit pai. we caught up with him and asked for an update on the at&t-time warner deal. >> it is limited to these particular affects, and, as i understand it, the parties have structured the transaction so it will not come before us. that is the reason why i said what i said yesterday. >> give us what the market life actually, therefore, is. the market is already expecting it. the index is up. are we going to see more m&a in 2017? will you allow that to go through? >> this is a decision for the private sector to make. my job is rather humble and frankly a boring one which is to review the papers put before me, and take a look at the facts, and make a decision based on the law and precedents long-established. can't talk in the abstract about transactions. >> we spoke with tom wheeler, your predecessor at the fcc, and he was of the view that four
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players in the mobile space in the united states was what was needed for a competitive market. you said at the moment it is extremely competitive. i wonder if three would be enough. >> i can't say in the abstract what the optimal competitive structure is. i do know the current marketplace is extremely competitive. after the fcc started its investigation of free data offerings, all four of the wireless carriers announced unlimited data plans. that is a good thing for consumers. in the process of any transaction, our focus is always going to be what is in the public interest. if it is in the public interest, then we would be more favorably inclined to approve the deal. >> if we were to see t-mobile team with sprint, what that still allow for a competitive space? >> i can't define that in the absence of papers that present the facts before me. >> you move to roll back some of the privacy rules surrounding broadband at the moment. this being where customers would have to opt in into certain
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internet service providers to use their data. you want to scrap that. the question is if this going to be bigger? are we going to see you completely roll back net neutrality? will title to protection no longer be in force? >> this is one of the rules that is putting a positive on the rule that was going to come into effect on march 2. there is a broad consensus about the need for free and open internet. that is something consumers and companies alike have come to take for granted. the only question is what regulatory framework can we adopt that both protect that core value and preserves a massive incentive to invest in infrastructure across the united states. caroline: speaking of regulation, while europe's top tech execs were making the case for less regulation on the continent that was that mobile world congress. the ceo of europe's biggest phone company by market value, deutsche telekom, he called to -- called for an easement in the transition to a fifth generation of wireless services that would spur growth.
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take a listen to our conversation. >> for me, it is more important across the globe, for these global connected industries. we are connected to people across the globe. we need the same standards in all markets where we operate. it cannot be we have 28 regulations in europe. i want to have a harmonized and standard one. the u.s. is a very liberal market in its way, so it is much better to operate there. it is easier for the networks to get built, so i think the u.s. model is a good one for the world. >> what about m&a in europe? there has been push back against some m&a across some continents. how much is that a frustration? do you feel consolidation is needed in europe? >> in europe it was fine. consumer prices, which are significantly lower than other markets in the world, because of this huge competition we have. in most markets, we have four mobile operators. if you are trying to build another network and build synergies with the network, we are not allowed to do so.
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it is a quite difficult ecosystem, and i think if we were enabled to cooperate more in the european market, there would be another reignition of investment. caroline: coming up, snap's shares soared during its trading debut, but the company still has to address slowing user growth. we will dive into the metrics next. if you like bloomberg news, check us out on the radio. you can listen to us on the bloomberg radio app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪
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130 p.m. in the afternoon in hong kong. let's start with samsung. been accusede has of hiding products. they forged documents and camouflaged millions of dollars directed to a confident to and preach the president. markets really do not care. they got better by 1%. ofillion of heart on shares samsung. let's talk about japan and north korea. japan has issued on alert after a report that they -- the north
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koreans launched a missile this morning. south korea's acting president has called it a provocation. china's national development and reform commission says cutting excess capacity is the top priority for 2017 and beyond. the policymaking body says private enterprise creates 80% of chinese jobs. it also says it would help improve the environment. now, $55 afterht holding. exports and shipments have been suspended until security improves and workers are able to return to their jobs. global news. 24 hours a day. powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. ♪
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but get an update on the markets across the asia pacific. the north korea missile firing a focus for investors. really where you're seeing investors is that they are flat to the safe haven yen. you're seeing the nikkei down a third of 1%. is helping the cost index up .02%. also strong moves from korean defense players. shanghai is solid after the npc kickoff in beijing over the weekend. by aalia has closed higher third of 1%. moves see fairly solid through much of the stock day there. look at some of the other players in the region. south korean defense companies also coming under pressure on the reports that china has closed or suspended trade in
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china at some of the shops. .08% on friday. we are live from london at the top of the hour. this is bloomberg. ♪ caroline: welcome back to the "best of bloomberg technology." i'm caroline hyde. now back to the top story of the week. snap shares closing up 44% from its listing price, yet the company still has some things to prove. one big concern for investors is slowing user growth. on the roadshow, the company told investors it was due to an issue with its android product, but some were skeptical. we dove into it all with cory johnson and bloomberg intelligence. cory: fundamentally, for this company to grow in the valuation it is at right now, it will have to be a better business. it is priced as if a lot of things will work.
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when i looked through the filings, statements, one of the biggest issues was this rapid decline in user growth. we discussed it a little bit. they have acquired a lot of users, rabid users. they like to talk about engagement -- how much time users spend on the service, perhaps in part because the size of the user base isn't actually huge yet. it is half of twitter, fraction of what facebook is looking at, but maybe more importantly, the growth has slowed down dramatically. they added only 5 million users in the fourth quarter of last year. even the quarter before, the user growth was quite slow compared with historical numbers. in fact, the few quarters before, there was an acceleration, then the growth rate fell off dramatically. it coincides exactly with the launch of instagram stories, and that is the most disconcerting thing. this suggested out there is that despite the cool filters and other things that snapchat has, instagram is eating their lunch when it comes to storytelling on
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the mobile app, and you can see it, i think, in the user growth numbers. caroline: the copycat is a key concern. looking into the bloomberg, we are looking at analyst recommendations. three, only three, but two are sells, one a hold. not a single buy in. research saying that shares could drop oblique down to $10. kendra, give us what the opportunities are for scale. you have highlighted that we have seen the revenue perhaps grow, but perhaps a more overall increase in user base slowing, but the potential to exceed its current form. >> so if you actually look at the user growth issue, and they are blaming it on the android performance issues, but if you split it by geography, the rest of the world, not europe, and not north america, show the
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slowdown. so, they have to show they can be resilient in the face of increasing competition from instagram. if they have bad numbers, there is a serious problem there. caroline: what are the opportunities for growth? critically outside the age range, gen x, millennials? will they look outside the current age group? >> i don't really think so. this is a millennial-focused platform. if you look at their strategy, it has been very millennial-focused, and they have shown they get this audience better than most social networks out there. i think sticking to their strengths is a good thing. having said that, if you look at the last couple of months, there has been an uptick in 35 plus audience. that is interesting, so maybe bringing in celebrities and followers they have under the platform to get some user base could be one of the strategies. caroline: they are already
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celebrities in their own way. we are looking at this age demographic breakdown. what is interesting is that potentially, they are already hitting saturation when it comes to the united states. others say, look at the rest of the developed world. they have been expanding their international reach. cory: internationally, the company has been growing. it is growing at considerable expense. it appears the service has become suddenly expensive to provide for u.s. users, or the international users just cost a lot more for them to provide for. while international growth might offer some opportunities for them, it is coming at a great expense. this is a business that has had negative gross margins for every quarter of its business, so on a training bases, you have negative gross margins. there are 552 stocks with over $10 billion market cap. only snapchat and one other have negative gross margins. that is just not a business. the very essence of any
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business, whether you are making oil wells or selling snapchat, you have to sell something for more than it costs. these guys are not doing that. caroline: when we look at your bloomberg intelligence and analysis, you have look at the market capitalization in terms of the ratio of the users they have, the user base they have -- they say it is significantly less than facebook and twitter. >> yes, that is one way of looking at it, but if you look at the big picture and compared to all the key ipos in the last decade, snapchat is coming out at the top of most of them. those outside valuations bring -- outsized valuations bring bring outsized expectations. revenue growth is not a worry to me. they just started monetizing it, but user growth -- if they show any weakness, that would be bad news for the company. caroline: it is interesting, we just had sarah frier on saying it is a bit like when apple went into music streaming, spotify's
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own business model was vindicated to a certain extent. do you think the fact that perhaps facebook doing everything they can to copy snap as they could not buy it? does that vindicate it to advertisers is this where you , want to be? >> that is why it is a wait and see story. initially, you have the budget that advertisers spend on everybody, google, facebook, and snapchat as well, but longer-term, if they prove they can hold the engagement among the core millennial group that they have and they continue to make it easier for marketers to advertise on the platform, then the revenue can scale. so it is really a show me story at this point. caroline: a quick update on yahoo!. this week, the company filed its 10k, an annual report required by the sec measuring a company's financial health. a few highlights for you.
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ronald bell resigned as general counsel, and marissa mayer offered to forgo her award and bonus given the 2014 security breach occurred during her tenure. bloomberg news received a statement from marissa mayer saying, "i am the ceo of the company and since this incident happened during my tenure, i have agreed to forgo my annual bonus and my annual equity grant and expressed my desire that my bonus be distributed to a company's hard-working employees who contributed so much to yahoo! success in 2016." coming up, youtube is taking on traditional cable companies. a reminder that all episodes of "bloomberg technology" are live streaming on twitter. check us out at @bloombergtechtv, 5:00 in new york, 2:00 p.m. in san francisco. this is bloomberg. ♪
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caroline: an update from amazon after a massive internet outage in the u.s. earlier this week. amazon said human error at its cloud business forced those outages that lasted for hours. amazon says an employee accidentally switched off more service than intended causing errors that cascaded through their service. this service is used to house data and manage out and software downloads by 150,000 sites. meanwhile, youtube going primetime, announcing a service called "youtube you tv" and it will deliver an assortment of channels to paying customers for $35 a month. starting this spring. bloomberg's lucas shaw spoke with the ceo of youtube at an event in los angeles. he started by asking her about the details of the new service. >> we see on youtube that we have a lot of demand for tv content. we think it is a great
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opportunity with mobile phones, because everyone is carrying a tv in their pockets but not using it for tv. so, we saw this giant opportunity to take this amazing tv content and make it available to a generation that loves content, but want their content on demand. they what to be able to watch it on any device and not have the commitments currently required for tv. so, we saw a big opportunity to bring the full tv experience to our audience. >> with these networks, these are owned by companies that in the past youtube has had a relationship fighting piracy and things like that. did you have to make any reassurances about that? >> we actually work with all of the large broadcasters and networks to bring that content on to youtube now. we have clips, shows, so we have had a good relationship with them.
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i think they have seen the opportunity to use youtube as a mechanism to get more promotion for their shows, to have time shifted versions of their show on youtube. so, this is taking it to the next level. >> you have experimented already with youtube red that you rolled out last year. whether the found about people's like thator things and about youtube as this place to get video for free. what have you found about youtube users appetite for paying for something and what is the future of youtube red now that you have this full tv service? >> we think there is an opportunity for users to be able to also have a subscription service, and so while the free, ad supported model is a wonderful model and we are investing in that, we see an opportunity with tv content to offer that to our users for the $35 a month for the six accounts. so, that is an exciting
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opportunity to expand to a new type of content and make that available to our users. >> do think this service then helps to boost the business of youtube? does it help to increase your chances of generating profits, advertising revenues? >> what we see is an opportunity to be able to offer tv content to our users in a way they are used to consuming content. so if you look at the generation of the cord nevers, cord -- cord cutters, millennial's, they expect to be on demand and cross-platform, so we saw the opportunity to bring this amazing tv content to this generation and connect them to content in the way they expect to consume content. >> you think there is any tv content that is missing from it? you have broadcast networks.
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you don't have some of the big cable networks. is that something that will change? >> it is a new service, so it is always evolving. but we feel happy with what we have now, and we think we offer a great set of content available for a low price of $35 for six accounts. >> what do you think is the big differentiator between this and other live services out there like the ones coming from hulu and directv and sling? >> we hope the big differentiator is that is a great experience. for our users, everything works the way they expect it. everything works seamlessly across device. that we have on unlimited dvr storage. you can quickly and easily save everything. you have no commitments when you sign up, and you have great search. these are all things that we as a technology company have spent years developing, and now we are excited to bring this youtube tv. >> where do the normal youtube
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creators that people spend time watching already -- is it part of the tv service? or is it separate? >> we will have some youtube content as part of the service, episodic content, also the top trending content on youtube available. so, we are excited to bring those parts of youtube to the service, and of course your original content youtube is creating as part of youtube read will be available on our youtube tv product. >> will it be available for the $35 monthly price or do you have to be a youtube red subscriber? >> the youtube red originals will be available included for the $35 price for our youtube tv product. >> right. one thing you have stressed in this service and a lot of new live services stress is sports. you have highlights on youtube.
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you don't have live sports. do you see yourself bidding for sports rights in addition to what is already available on youtube? >> the goal of this product is to be able to offer tv content and have a great tv content experience which includes a lot of live sports. so, our partnerships with broadcast networks -- we have a comprehensive sports offering for users with this product. caroline: youtube ceo speaking with lucas shaw. we heard some of the biggest names while at the mobile congress in barcelona including ericsson. ericsson is betting big on cloud they are aiming to capture some of the $1.2 trillion market for a broadband services. we caught up with ericsson's chief executive officer for more. >> in order to be as successful company, you need to make money. you need a bottom line.
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that is a hygiene factor as i call it. we also need to invest to stay ahead of the game, but it is only by being profitable that we will be able to invest for the future. >> do you think some of the pricing pressure is easing at the moment? likes of huawei no longer putting pressure on the market? >> pricing pressure will always be a factor to deal with. we can only combat that with innovation, new business model, new service offerings, etc. that is what we will continue to do. we cannot bet on a market change. >> there is much anticipation and analyst notes that you will sell the services side of the business? should that anticipation be there? >> i'm starting my sixth week, so i think i will need more time. then we will then start to communicate what we do. >> when you are communicating what you are doing, many have been focused on the credit rating of ericsson at the
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moment. you look like you are prioritizing the cash balance, even going out there and entering the bond market, curtailing dividends. how important is that to keep the investment going? >> for us, it is important. with the capital markets and also with the industry. we like to make sure we have the rating and a strong balance sheet. we are doing really long-term investments and long-term bets. that can only be done if you have financial stability. >> long-term investments and bets. i'm going to dig and more to the potential partnership, because looking at some of your lower margin areas of the business, is this the time you could be working with other companies rather than a standalone basis? >> we will always work in partnership with companies. we have a partnership with cisco for example.
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you will also say we have all of our partnerships in new areas. so, in the future world, i think we will be much more about ecosystem, partnerships, and collaborations. that is where we are going to go. caroline: still ahead, we get back to our main story of the week, snap's first day of trading. just how big of a paycheck are the cofounders bringing home after their first day of trading? we will hear from the bloomberg billionaire team next. this is bloomberg. ♪
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caroline: a stock we are watching. apple hit an all-time high after research published a bullish report on the iphone maker. they joined "bloomberg daybreak americas" on wednesday and reiterated his buy rating. >> there is a lot of anticipation building up for this new phone in september. there is maybe a difference. we have not had a substantial
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difference since the six and 6s came out. it seems like the multiple will continue to creep up in little bit more. if you look out a year -- at 2018 earnings, if they can deliver mid single-digit growth, you can get more run out of the stock. caroline: another stock on the run this week. of course, it was snap. the company's public offering landed over $1.5 billion to the founders' fortune. they are up more than 150 places on the bloomberg billionaire index. >> if you look back at the course of their fortunes, they were nowhere in 2011 or 2012 -- all of a sudden in 2014, $10 billion valuation. it closed at about $28 billion valuation today. it is one of the all-time fantastic growth stories. it is just whether it will continue are not. caroline: we will see how much they start spending. how does this rank them and --
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in comparison to the big tech billionaires? >> the classic names might be jack dorsey. from twitter. he only has $1.5 billion. you have to feel sorry for him. he has two jobs. he is the ceo of square. along with the other startups, unicorn head honchos, the three airbnb founders with 3.6, just behind travis of uber. obviously, they are way behind jeff bezos, mark zuckerberg, and bill gates who are up in the $50 billion, $70 billion, and $90 billion range. caroline: we were just looking at a screen there. talk us through it. not just the founders made a lot of money, but venture capitalist that made big bets in the early days. >> benchmark made $900 million today and got a $2 billion position, and lightspeed ventures, it was a growth story about how evan spiegel wanted to make sure he had voting control at snap, and they got $600
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million this year. caroline: $613 million. what about the bounce we tend to see on the first day? we know it is up 44% today. twitter was up 73% on its first day of trading. these sorts of fortunes aren't always stable? >> the don't really point towards what will happen in the next year. twitter was up 77%, and now down about 30%. facebook was flat, and now it is up since its ipo 260%. caroline: how have their fortunes changed in the founding of this company particularly? we were talking yesterday about how it was like a rocket ship and went up so quickly. is this now the point that they cash out? a lot of it is going to be locked in for the foreseeable future. >> they both sold 16 million shares in the offering. so they have taken home $272 million. they get taxed on that, they get
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about $181 million. in terms of snap shares, there are restrictions on when they can start selling. they each have 20% in snap. if they started selling that, you assume the value they are -- the value of their holdings will drop down. but no one can feel sorry for them. they have done very well, and i'm sure they will be celebrating in los angeles tonight. caroline: we have been bringing you interviews from snap investors there from the very beginning. scarlet fu and oliver renick spoke to the general capitalist managing director, who gave his thoughts on the company's performance and the first day of trading. >> the successful start you are seeing his reflection of two things. one is how popular the product and how well the company has executed over the last few years, and the second is there have not been a lot of tech ipos. there is strong demand to invest -- strong investor demand to invest in companies like snap. it is great to see.
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>> the stock is trading $25 and change. it ipoed at $17. where do you see it closing and trading in a quarter from now? >> i can't see the future. the things i can comment on, the company has done a good job of setting expectations at the right levels. i think you see strong investor sentiment behind the company. what happens in the next few days is hard for me to predict, but so far so good. >> the reason i ask is that it could go the way of facebook where it did not have a great debut but the stock is done very well. or twitter, which did better, but fell below its ipo price. what is your confidence that evan spiegel and bobby murphy can guide snap to not go in the way of twitter? >> this is the key question everybody talks about in silicon valley as well. the reality is that every one of these companies is different from each other.
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twitter is still a 140 character method for broadcast, but it is different from what snap does which is communication for every day life. there are hundreds of millions of people use in multiple times, 10 times to 20 times a day. so, i look at how evan and bobby executed over the last six years and have many interesting products they have launched, and that is a testament to how different the company is from twitter and even facebook. caroline: that does it for this edition of the "best of bloomberg technology". we will bring you the latest in tech throughout the week to come including our exclusive interview with the head of google's learning group. that is on wednesday. tune in each day. remember all episodes of "bloomberg technology" are live streaming on twitter. check us out at @bloombergtechtv weekdays. that is all for now.
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anna: cryan changes course. the deutsche bank ceo scraps is turnaround plan and starts afresh. the bank plans an 8 billion euro share sale. you can see our interview with him at age: 15 a.m. london time. china sets growth targets. the world's's second-largest economy aims for 6.5% growth, emphasizing stability. tensions flare as north korea fires ballistic missiles. the yen strengthens. driving towards a deal. general motors is said to be poised to sell its vauxhall dealers, in an announcement this morning. we are live at their headquarters.
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