tv Bloomberg Technology Bloomberg August 17, 2017 5:00pm-6:00pm EDT
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pedestrians and wounded about 100 others. a van jumped a sidewalk and plowed into a crowd. islamic state is calling for more attacks. police say troopers killed a man in a car that hit two officers at a blockade. spain has condemned the attack saying the nation will not be terrorized. the prime minister denounced the violence. other leaders including tracy mae, donald trump and others have spoken out. tennessee senator bob corker delivered his harshest criticism of president trump. they said he has yet to show the kiwi -- require dense to lead the notion. he says trump's moral authority is compromised. mccray's ome of the
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day, al news 24 hours a powered by more than 2,00 journalist and analysts in 27 countries. this is bloomberg. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org emily: i am emily chang, and this is "bloomberg technology." coming up, tech mobilizes against hate with new game plans in the wake of the charlottesville tragedy. how companies plan to draw a harder line without compromising core values. . us cloud flair the c.e.o. joins us with why the time was now to make a stand. and ali bulba's massive growth
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fueled bite cloud. the rift on online shopping and the monster first quarter that beat across the board. first to our lead. it has been a chaotic couple of days following the tragic attack in charlottesville, virginia, and tech companies of coming together, committed to fight off who use hate speech. newer startups like uber and air b and b are facing a newer challenge. for more, i want to bring in our bloomberg tech reporter, who covers facebook and other companies. i want to start with facebook and twitter. this is something they have been struggling with for a long time. the rules have been vague. they are still vague, but what are they doing now that is new? >> well, these companies have for the longest time try to say listen, we are a platform for people to share their views openly. we may disagree with them, but we will only delete them from
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our platform if they are olent in nature, if they are inciting hate or something that makes other users feel uncomfortable. that hasn't always been the practice for a the lot of these accounts. a lot of the white supremacists activity has gone untouched because people haven't flagged it as much or there haven't been event like this in charlottesville, which really highlight the risk here. now these companies are being a little bit more proactive. we saw facebook take down eight groups that are were related to neo-nazi that they thought were prop gating hate. air b and b are being very proactive. they deleted some people's reservations because they cross referenced their user names with what they were saying on social media sites. >> let's start with the content sites like facebook. some of these white supremacy groups have been using facebook
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to organize events. they have been using facebook for the purpose of coming together. i spoke with a partner at nters sewers about whether content companies should be going into the business of policing. >> there are some constraint about content, particularly inciting violence, but outside of that, it is a difficult place to be. i don't think companies can censor content legally or prudely. i don't think content should be send i don't remembered. >> even if it is not the consent, he is saying these companies shouldn't sensor it. where will they draw the line? >> right now it is subjective. that is one of the problems with policies, is they all happen behind closed do you understand. facebook says it has always had very consistent policy, those policies tend to be enforced
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whitner users report them. we were talking about facebook groups earlier. groups are places that sort of hide outside the moderation on facebook. it is like-minded people talking to each other. it is a place where these kind of stories can go viral. they can go viral there, and then people may not report each other to cause them to take it down. what uber and air b and b are doing, how do you tell us a guest is a racist or a passenger is a racist. >> we have learned that air b and b actually cross researched the user accounts with what people were saying outside on social media. it is a very unconventional approach they took where people were not actually espousing these views on the site, but off the site. air b and b took that too account, probably for the safety of the people holding
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them in their homes. emily: we have been talking about paypal cutting off relationships when it comes to payments on their site, apple cracking down with apple pay. employees yesterday saying i disagree with the president and others who believe there is a moral equivalent between white supremacists and nazis by opposing those and standing up for human rights. they run counter to our ideals as americans. where does it stop? >> i think a lot of the tech leaders are having to come out and say something like what tim cook is saying. we saw mark zuckerberg yesterday. we saw the cloud c.e.o. coming out. when you have these ideas prop gated on your platform, you do sort of have to think where do we fit into this? are we a tool that is helping us grow? and i think a lot of the executives are grappling with
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it. it is a subjective problem right now, but a lot of the free speech advocates i was talking to say when you have a small set of companies and leaders deciding what should be on the web, there should be a little bit more transparency down the line for exactly how decidings get made. emily: we are going to talk to matthew prince about how he made that decision and what that means going forward of the cloud. thank you so much. we are tipping this conversation, as i said with matthew prince coming up later in the show. why he decided to cancel the account of the neo-nazi sigh, the daily stormer. they spoke out thursday between the relationship between president trump and business leader, this after multiple c.e.o.'s left the advisory councils when he didn't sufficiently condemn white supremacy. they spoke about executives in the current climate. >> it is incumbent upon the
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business leaders here to continue to work on making sure that the things this country needs to be successful over the next few years, that we are still making sure we are playing a role in making that happen. emily: coming up, china's largest online mark played boosted it's e-commerce. well break down the results next. this is plerk. ♪
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terror incidents in barcelona and the controversies surrounding the trump administration. alibaba hit a record high after posting record quarterly earnings. revenue jumped 56%, and profit nearly doubled in the june quarter, fueled by a core e-commerce business. joining us to discuss these ner ers, the managing part at capital and one other. are you impressed that a company of this size can continue to post such strong numbers? >> of course we are being impressed with the growth at this time. we also feel very vindicated, because for the last two years we have been stating that alibaba was going to be great. a lot of people had skepticism given the china downturn in economy, the stock market crash from two years ago, and alibaba has continued to grow and grow. >> i want to look at how
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revenue growth has progressed. btv t your bloomberg z # 474. it shows how revenue has grown over the last several quarters. they have spent time on the call talking about a new retail strategy, another area we are expecting significance growth. what does that really mean? >> alibaba, like amazon and many other giants have been talking about how really the future of commerce is when you k-9 offline shopping with online shopping. so alibaba wants to leverage the millions of consumers it has as well as data to deliver a mobile and that offers a seamless experience when you are in a brick and mortar story. they have had billions of ollars poured into this oliver $this off line commerce. they have rolled out more than 10 stars around china. basically you take the app,
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download the app, walk into the story, scan the goods with the bar code, check out with ali pay and you can have your own seafood there, cooked on the spot there or delivered to your home in 30 minutes. the executives are betting on this type of strategy to drive growth in the future. >> how do you compare what alibaba is doing here with these super market stores, which double as warehouses for orders. how do you compare to what they are doing with amazon? >> trite now china, e-commerce is roughly 15%. that penetration rate is growing by 1% year on year. for alibaba to grow 3% on the year, they need to figure out how to tap sbe the other 85% of spending. ey are doing that by combining off line with online.
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you look at what has happened ingentleman. you go to tokyo, you go to osaka, you see the high speed rail and subsway stations and tons of stations in there. in tokyo, you can check in your luggage at the airport, and it will get sent to your hotel. china has learned from that and applied that to e-commerce. >> i find it that alibaba is taking on grocery the same time that amazon it. >> amazon did it after alibaba. >> how do they compare. >> you look at the mobile payment market in china. 2016 it is about $790 billion. that is seven times the american market. chinese consumers are used to paying with the phone. they go to a story and see something they like, they can make a purchase. if the inventory is not
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available, no problem. the warehouse can send take to their home in the next po minutes. that is something we don't see in the u.s. you will see it happen more and more in china going forward. >> cloud, another biand growing part of alibaba's business, but they are losing money there. talk about what is happening when it comes to cloud computing? >> they reached a milestone. they had more than a million paying customers, but we do see growth slow down. digital media entertainment, we saw growth slow from triple digit growth to just 30%, which is still good. but in comparison to previous quarters, it is considerably less. a lot of the reason for the grows costs in those areas is because with the cloud area they need to spend on data center and with the entertainment division, they are spending heavily on content. ere is a big war being waged between companies. they are bidding higher and higher prices for con end it.
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it is likely the prices will continue to widen. >> hans shares have been on a tear. is it warranted? >> i think there is a chance that e-commerce in china will move from 15% to 30 pass over the next to years. that will be a good foundation area for growth for alibaba. >> we will have to check in with you in two decades thank you hans and salena. coming up, we bring you a company with big plans to take digital currency to the stars. how they plan to do it, next. if you look bleering news, check us out on the radio. on the app, bloomberg talk and sirius seniors, this is bloomberg. ♪
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be popular among message fund. so much so that 52 of the fund have more than 5% of their snowsed equity investments in the stock. that represents 2 with respect of shares. facebook peers have an average of five hedge funds that own more than 5%. well, bitcoin showing no signs of slowing down. the digital currency climbed above $4,400 and hit a high on thursday. the rise coming despite the recent split resulting in the emergence of bitcoin cash. we sent it to caroline hyde in lone do not, who is joined by the head of a company with plans to take the digital currency to new heights. >> great to see you. and new heights in every since sense of work. i am here with ad. is a bitcoin infrastructure
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coy. the move allows them to offer a free satellite conditions to offer service to the bitcoin network even without an internet connection. ad, wonderful that we can catch you while you were passing through london. first of all, let's talkle the emerging market element of all this. his is often cited as a utopia of bitcoin. it is the democratization of finance. how can people as far away as africa access bitcoin? >> today, we take it for granted in the western parts of the world that we can spend $is00 or less a month or things. that kind of staple infrastructure often doesn't exist in emerging markets so cost of participation is high. with satellite note work, we are bring the cost of
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participation down to basically free. goes from $100 to less than $20 by renting satellite tv conviction. >> it is important when perhaps your foreign currency is not that. i am thinking nigeria and venezuela. is this where you see a lot of the demand coming from? >> right. there happens to be a coincidence of countries with weak infrastructure or poor network services, and maybe political instability, and also having weak currencies or currencies suffering hyper inflation. >> there is also a purpose it could be used in the developed world as well. sometimes the internet connections aren't always that great. >> it is not unheard of for internet connections for whole countries to go down for hours when a fishing boat digs
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through a transatlantic cable. for bitcoin, it is important to have a view of the global ledger. one way in which you can do that is have redundant connectivity. satellite is an independent form of connectivity. today we have three satellites and four coverage zones. but the additional satellite are going on by the end of the year to cover the full globe. today, it is 2/3 of the world's surface, but by the owned of the year, full coverage. we end up with a ring of satellites where each satellite is able to retransmit data to a previous one. >> are you doing this out of the goodness of your hard? >> block stream is a block chain infrastructure provider. we provide services to companies. by boot strapping this, we can grow the ecosystem.
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the companies that provide substance to users will buy mauer technology from us. >> it is interesting that you are just supporting bitcoin here. is the theorem not up to it? is your view that bitcoin is his going to be the digital assess of choice? >> it has the best track record. when people think about money, digital cold, they are looking for stable, predictable conservative k-9 of things. i -- kind of things. it is fine that people are experimenting with new technologies, but bitcoin is the key. we are focused on that element, and we emphasize block chains, and because of dependability and security record, we build stability to build contracts. >> you have always made bitcoin more flexible in the ways in which it can be used.
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we have seen a volatile year. suddenly a spike in the prays because the underlying technology has been upgraded, and everyone is following along with it. but there is an upgrade under debate. does that mean bitcoin will forever be dependable? >> i think bitcoin is a bearer technology. ultimately it is the users and market that defines what bitcoin is. the miners are a very important party. ultimately they provide a service to the mark. it is the market that decides. as a user, you hold your own candidates. if you run a full mode, which is what the block stream satellite is about. >> what is that? >> if you want to participate directly in the bitcoin network, you should run a noticed that listens to the transactions around it. if you use a simplified client to the network, you are actually relying ton a third party. by using your own form of
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software, which is what bitcoin companies do, you are not relying on anybody else at all. in that circumstance, it is not really possible for somebody to make a change to your ownership or force a non-opt-in upgrade to you. you have to opt in. >> ad, great to have -- ad, great to have you. he is the c.e.o. of block stream. to you in san francisco. yoiment thank you. coming up, standing up for principles or censorship? matthew prince joins us on cutting ties with the neo-nazi site the daily stormer next. and a feature i want to tell you about, our interactive tv function. you can watch us live, check out old interviews, playing along with the charts we bring you on air. this is for bloomberg subscribers only. check it out at tv go.
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13 people were killed and 100 others injured when a van jumped the curb and mowed down pedestrians in barcelona, in what officials are calling an act of terror. the death toll is expected to rise. islamic state has claimed responsibility. police say troopers also killed a man inside a car that hit two officers at a traffic blockade. some harsh criticism today of president trump from tennessee republican center bob corker. >> i do think there need to be some rad caggiula changes. -- some radical changes. he has not coyote.able to demonstrate the ability nor some of the competence that he needs to demonstrate in order to be successful. >> senator corker's remarks came two days after the resident declared that white supremacists don't bear all the lame for this weekend.
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president trump called senator flake called him toxic and weak on borders. he called him a principled legislator. it is just after 5:30 p.m. ear in new york, 7:30 friday morning in sydney. paul allen has a look at the markets. >> good morning, mark. no surprises really that futures in the asian pacific are looking weak. we have nick futures down -- nicka futures down. all weighed down by the political scene in the u.s. mixed earnings, and topping it all over, the tragic incident in barcelona. quieter day for earnings in australia and ramps up next week. ron other up to $73 per ton. pig iron will be in focus. irst half income, 43.5 yuan,
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$6.5 billion. surging market. that had been want to watch today. other earnings out. china merchants back and resource gas group. elsewhere, open hearings continue in japan into whether or not to allow casinos. we will have g.d.p. figures from taiwan and malaysia as well. i am paul allen in sydney. more from "bloomberg technology" next. ♪ emily: this is "bloomberg technology." i am emily chang. returning to our top story, tech companies from facebook to air bnb are going on the offensive against white
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supremacists and nazis. the rebuke comes in the wake of the violent rally in charlottesville, virginia, that eft one home, health heyer dead. flair decided to end its business with the daily stormer, a known neo-nazi website after go daddy and google severed ties. it was an unexpected move as cloud flair has prided itself to an unwavering excitement to free speech. joining us now to discuss cloud flair, c.e.o. matthew prince. you have said in the past a website is speech, not a bomb. what is different? time? >> the daily stormer was the exception that proved we needed to rethink a lot of the rules, not just with cloud player, but he tech industry in generally.
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they got put on probation a few month ago when we started to get reports that they were harassing people who were submitting abuse reports. earlier this week they were bragging on their bulletin boards that people on flawed flair were actually supporters of theirs. we think the content of their site was abhorrent and vial. that was the last straw for us. there is an important piece that we need though think about who it is as a technology company or society in general that can regulate content online. privileged ry position that sees about 10% of all internet requests. i am not sure i am the right person that should be making that place. >> just because you pulled the plug doesn't take the site down. but it makes it more vulnerable
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to attack the >> we provide services. we help make sites faster, stop big cyberattacks launched own them. a huge portion of the spernt, most of our customers are big fortune 500 commerce, but we have small customers like the daily stormer that get attacked all the time. the reality of the internet today is it has become such a dangerous place, if you don't have something sitting in front of your infrastructure and you do anything controversial, chances are that hackers are going to be able to knock you off. >> the daily stormer isn't the only nazi group online. there are other hate groups online. are those groups still up and running thanks to cloud flair services in part? >> we still believe the right policy is to be a content neutral network. >> so this is not a precedent? is a one-time thing? >> that's right. we hope this is a way for us to
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say let's stop and say what is the right place for internet content to be regulated. google terminated the daily stormer from using their registrar service. they didn't kick them off their o.p., they didn't stop stop answering the d.n.s. queries or pull the search results. what that tells me is not that google made a mistake, but where in the internet stack is being restricted or controlled matters. the rules for someone like facebook, twitter or youtube are i hank aaron going to be different be a company like filetflare or level three. we need to have that conversation about where is the right place for content to be regulated and how they make those decisions. cloud flair has been called many things. even if it is different for you, how do you respond to the
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accusations? >> the nature of being neutral is that there is going to be someone who you upset all the time. we have a project called project gal lay yo. >> but that is different than upsetting someone else. >> when we hear there is an allegation, we hear there is terrorist content, illegal other otherwise, we turn to the experts in terrorism and legal content, which is law enforcement and regulators. here is this content, what do you wants us to do? that is the due process. they are enshrined organization who can make these decisions, as opposed to the decisions being made on the whips of me, mark zuckerberg and others are. >> so you think it should be regular layed like utilities? >> i think we need to have a conversation between the stake holder. that means technology companies, regulators, content
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creators and consumers and civil society originals. at this point it is the wild west where people are making those decisions, and they aren't transparent. it has been framed a lot as a freedom of speesm issue. i am the son of a journalist, and i think freedom of speech is absolutely critical. but it is a uniquely american concept and idea. on the other hand, due process is something that spans the globe and something people really believe in. part of due process requires there is transparency, and acontiability. i don't think that is what is going on with technology companies right now. >> you have warned this is dangerous territory and a slippery slope. what is the worst-case scenario? >> i think the worst-case scenario is you have a kabal of 5-10 tech executives who basically are choosing what content can or can't be on the internet, based on personal
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agendas, or worst case, economic agendas. even as someone who sits in that privileged thing, i am worried as an internet consumer. there is an understanding and accountability for when companies are making decisions. >> these people would find each other if the internet didn't exist. but some people have argued that technology has given these groups oxygen, to find ep each other more easily and allowed them to grow. your company, which handles 10% of all interpret requests, do you think by taking a moral stand, even if it is a stand the companies haven't taken before, they can actually make a dent on the fight on terror? can tech companies make a difference with their policies? and if so, does make that moral choice worth it? >> i am skeptical that censors content makes content go away.
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on the other hand, i do think that taking content and saying this is something we believe in, and we will help promote that. >> it's a double edged sword, right? promoting things you like versus condemning things you hate? >> well, people learn to hate. if we can teach them how that isn't productive and part of a modern civil society, then that makes a ton of sense. what we do at cloud fla everyone e, we work ith about over 100 groups that may be under attack. it may not be from hackers, but government. lgbt in the middle east, human rights workers in china, where they may be trying to be silenced. we say we will lend our services to make sure they stay dwronl. that is the roll that technology companies can really play, in saying here is an alternative way of looking at the world, which again is more
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progressive and aligns with the moral values of those companies. >> are you still uncomfortable with the decision you made with the daily stormer? >> absolutely. again, i woke up one morning and got sick of these jerks using our platform, and i flipped a switch, and they were no longer on the internet. i am not sure that is a power that any individual -- especially any individual that isn't -- has a political legitimacy to them, that any individual should be making. tim: matthew prince, c.e.o. of cloud flare. thank for stopping out. coming up, a top peer to peer lender looking to branch out. that is next. this is bloomberg. ♪
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>> wal-mart gave a luke warm forecast for the third quarter. they have been spending heavily to catch up with amazon. the c.e.o. has channeled a third of the budget into digital initiatives, like a special aized ee-commerce distribution center, the investments seem to be paying off. wal-mart online sales jumped 60%. a vote of confidence for one of the international players in business of peer to peer lending. u.k. founded founding circle is get money from agon. it will be loans that could reach more than 2 thoirblings 500 small and medium size businesses in the u.k. is shows how institutions like insurers are attracted to the yields on offer. funding circle c.e.o. spoke with caroline hyde in london, where she asked if more
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financial institutions will be using the services of companies like funding circle. >> if you look at the funding circle platform, we have 70,000 retail investors that lend through us. we have government institutions, the british business bank, k.f.w., the european investment bank, local governments and councils, and we have a number of other institutions. we have our own listed funds, the funding circle income from a number of blueprint offers. from our perspective, we want as many different types of investors as possible to be using the platform to get money to small businesses. i think as every year or every lone that we do -- every loan that goes on, the track record becomes more established and more and more large institutions will want access. >> the supply is coming thick and farce. what about the demand side? how about small businesses still wanting to borrow from the funding circle rather than going to banks? >> on the small business side,
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we have had incredible demand. we think we are about % market share of gross lending in the u.k. but actually if you look at net lending, which is the lending less repayments, a measure of new money going into the economy, we actually think we are about a third of the market. around a third of new money going into new businesses come through the circle platform. i think it is increasingly being proven as a good way to get money to small business. the reason is it is faster. businesses get decisions within 24 hours, funds in a few days. we deal in much better levels of service. 94% of businesses tell us they would always come back to us. we are cheaper as well. we're able to use vast amounts of data. >> they are trying to make processes more efficient, and trying to make sure they do the
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credit risk faster, or is that something you leave up to yourself? >> i think banks will always get better and improve. we have partnerships with sert banks to help them fund customers that couldn't go through their platform. the vast majority of customers are ones are those that both we or the bank could fund, through there are pocks where we help them. we are a small sotomayor. even if we went to 20% or 30% of the market, i am not sure how much banks would take it at that point. >> it is interesting. bloomberg had a story out showing how much money going is start ups at the moment coming from banks and institutions rather than venture d'antoni. are banks trying to put money to work? are banks trying to get on the side of this digital movement, or do you think that they are still head in the sand? >> well, i think they are. i think if you look at the more
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forward thinking institutions like agon, which has started prfing our lones. others i am sure will start soon as well. you can see that there is a big move. there is this part of the market where consumers or small businesses, they just want a choice. they want things on banks. you either decide you want to get involved and play in that area and work with players like ourselves, or you cede that part of the market. on the same way as online retailers and choices coming to the market, it is something that customers won. >> and you think that the banks and institutions will always go through yourself rather than building their own? >> i think some people will try to build their own. that is natural. i think for most it is a very simple easy thing to partner with someone like us. we are a small business lone specialist. that is what we do, that is all
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we have ever done. that is one part, though, of a bank's business. though will be doing corporate loans, credit cards, personal lines, all sorts of things. actually by partnering with specialists, it is a very cost effective way of accessing the market and access to the yield. >> you have such a bird's eye perspective of what is happening whether it be the u.s. economy, germany, netherlands and the u.k. from a brexit perspective, how are we in terms of the u.k.? are you still feeling that demand is there, smasmubse are growing, that your company can continuing to thrive in the united kingdom? we have so much headline risk that hits us day to day. >> if you look at our business, we have grown 80% year on year since the referendum. we still continue to see strong demand from small businesses. we haven't soon an increase in solvency rates or bad deteriorates on our platform.
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if anything, the fact that the big insurance perhaps like agon have looked at that data and have decided to purchase in. it is probably a good validation of strength of the u.k. economy. i think there is still a way to go before article 50 is triggered. t it is broadly across the u.s., germany and us. it is strong. >> the funding circle c.e.o. with kara line hyde. coming up, a total eclipse of the sun. we will tell you how tech companies from air bnb to google are fearing up for monday's solar eclipse event, including passing out 14,000 pairs of these. this is bloomberg. ♪
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>> for those of you who won't get out to sigh the solar channel he weather and others are teaming up to stream it live. it begins over oregon and makes its way across the country to south carolina. meantime, for those wanting to see the event in real live, a narrow trajectory from salem, oregon, to charleston, south carolina will have the best view. they are finding a way to cash in. here is olivia our tech reporter. there are some mall towns on the route of this eclipse. some of those people are going to be making money, aren't they? >> small is an understatement. these are tiny towns. we are talking of a population of less than 49,000 people. these towns, rig biidaho had one person stay in an air bnb this weekend last year. now 700 people are going to
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stay at an air bnb this weekend for the eclipse. about 50,000 people are expected to stay in air bnb's in this narrow path that is about 70 miles wide that stretches coast to "denver post." >> is air bnb doing anything to host a free-throwing number of pair? >> it did a sweepstakes. but a lot of people felt like there aren't a lot of lodging opportunities in these tiny towns. rig biidaho has one moultrie. it is a middleton 6. it is charging $330 a night. they say i can rent a room in my house. some people are renting out their back yards. patches of grass are going for about an average of $150 in rig bi. >> wow. >> as high as $150. i think the average is closer to $120. you can park your car there and pitch a tent. >> now hertz is bringing in extra cars. they had gotten some backlash r canceling overbooked
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reservations. google is partnering with science and giving these out? >> yes. they are giving them out to students along path. lots of excitement around the eclipse. >> it is coming up on monday. san francisco isn't the best place to see it, but can you still enjoy. >> i will be wanting. >> olivia, our bloomberg tech reporter, thanks so much for stopping by. that does it for this edition of "bloomberg technology." ming up, essential present nicalo will discuss the launch of the new phone. for now, this is bloomberg. ♪
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announcer: from our studios in new york city, this is "charlie rose." charlie: we continue this evening with the events in charlottesville, virginia and the aftermath and the president's response. last week's violence continues to reverberate throughout the entire country. president trump yesterday defended his initial statement, reiterating that there is "blame on both sides." president trump: what about the alt-left that came charging at the alt-right? do they have any semblance of guilt? let me ask you this -- what about the fact they came charging with clubs in their hands, swinging clubs, do they have any problem?
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