to cooperating with russian agents. bloomberg view columnist eli lake has learned jared kushner, the president's senior adviser and son-in-law, is said to have told michael flynn to contact russia. includeto the tax bill a larger tax break for so-called pass through businesses. shows 51rg count senators now favor the legislation. an attorney for one of the women alleging sexual harassment by john conyers says her client is expected to testify next week before the house ethics committee. house democrats have called on 88-year-old conyers to step down. officials have said that the plan is to replace rex tillerson

pompeo,ia director mike but tillerson and president trump deny reports. ♪ emily: this is "bloomberg technology." coming up, bitcoin's have to the mainstream. u.s. regulators have cleared the theto allow future specs on company. we will discuss legitimacy of cryptocurrency. plus, taking stock of uber.

joining us now, poly chain capital cost ceo. ceo.ly chain capital's great to have you here on the show. what a week it was. i imagine it has been crazy for you as well. >> i imagine it has been a crazy week and here for everyone in the cryptocurrency space. massive.

it gives access to anyone who wants to have access to bitcoin without actually having to hold bitcoins. it also means it opens new financial products so people can shorten it and that against the .rice for a first time i think there is an increasing understanding that this is a massive technology, perhaps larger than anything we've seen since the creation of the internet itself, and it's important we create careful, pragmatic regulation about this industry and technology. this: we've had conversation earlier, but i think it is important to have it again. as a price continues to go up and up and up, you don't want to over hype, but there are still a lot skeptics and a lot of uncertainty. : there have always been skeptics, and i think what we have seen recently is nothing compared to what we will see

over the next i did 10 years. many other technologies are growing at a faster clip than bitcoin. i think going forward, we will see many new ecosystems developed. many of these things will grow even faster than bitcoin has in the past year. some ofet's talk about the comments we've heard -- a bubble, a fraud -- what do you think? think people have been saying that since the beginning. i think the folks saying those things do not understand the technology may be as well as they could. i also think that whenever something is this large of a breakthrough, it challenges established world views and ideas about the world, so i think that a lot of folks see their existing worldview challenged about maybe what is possible, and it scares them a little bit. oftentimes, the response to understanding bitcoin for the

first time can be backlash. many of those folks over the last five years were originally skeptical, but as they learn more about the technology, they come around and read this is a massive breakthrough. what about bitcoin itself ? how will it be used? what will it be used for? olaf: i think it is acting as a sort of digital gold. you can transmit it over the internet digitally. this means lots of people want to use it as a diversified asset class so they can get uncorrelated exposure. a lot of people want to store their money in something other than their regional currency, soy think there's a lot of different reasons why people might use it, but a lot of it boils down to that digital use case. emily: bitcoin job postings have spiked on linkedin. are you guys hiring?

olaf: we are definitely part of that. emily: what is the war for talent like? there must not be that many people who are experts. has grown 10and times. the number of people in the space that are genuine experts is pretty small. now is a good time to be an expert in cryptocurrency technologies. emily: how many people are you hiring? olaf: we are looking to hire about 10 people. basically anyone with a deep understanding of cryptography, distributing network game therapy -- distributing network, game theory. it is not very deep, but the reason is because those folks who have the skills have very lucrative other opportunities. i think the competition for these types of folks will only increase for the next five years. more: there was a lot optimism around ethereum. fred wilson told me he thought

it would surpass bitcoin, and now it is not even close. olaf: i think over time, many other technologies in this area will grow essentially. the reason is they actually name also its of new behaviors that are not possible with bitcoin. --ngs like a theory of -- what we have seen happen with largeum, they build a ecosystem of developers that are all building applications and infrastructure on top of the online protocol, so this is the type of thing we have seen never possible. emily: do you think other cryptocurrencies will surpass bitcoin? olaf: yes, i do. last time i was here, i said it would surpass bitcoin by 2018. i stand by that.

the types of things we're seeing eum, they arer almost a bit sci-fi, beyond anything you would reasonably think is possible. i'm interested in the applications that will be natively enabled by the technology. services that offer an improvement in storage fromalth, but most things the internet were not possible in an analog world. there was not an off-line version of facebook. what are looking for an excited that our those native uses are capable. i am very excited about many cryptocurrencies that are up-and-coming. .efinity, polkadot i know you're looking at me like you have never heard of these things, but you probably have not heard of a theory of -- a eum a couple- ether

of years ago. fail? which ones will olaf: i think easily 99% will a any new i think that fast-moving start of ecosystem, that is basically what is going to happen. emily: great to have you here. you are charting the bitcoin history for us. you will be part of it. a story we are watching -- redbook is being sued by disney for selling digital downloads of .he studio's films disney said in a statement red box is selling their digital films and they have taken action to stop the unauthorized

conduct. coming up, with so many scandals, it is easy to lose track of the biggest problems behind the scenes at uber -- figuring out how to make money or at least lose less of it. we break down over -- uber's financials next. ♪

emily: this week, we learned that over -- uber's losses continue to mount. next? happens let's bring in our bloomberg tech executive editor and a

bloomberg tech newcomer. lots of talk about the deal. -- the deal with softbank. it's been going on for months. if any have to decide implied $48 billion valuation is enough. a 30% discount. >> but for a lot of people, it is a huge increase over what they got before. people are deciding if they should offer the shares and by how much, and based on how many people do it, softbank will either accept that, say they need to of the price to get more people, or walk away from the deal. we are waiting for the clock to wind down. and we have new information about their financials as well. >> we always knew they lost money, but we are seeing on a gaap basis that it's astronomical. they lost about 1.5 billion dollars in three months. besides the accounting information we're getting, their losses have started to grow again.

they have been decreasing quarter of a quarter, and now they are going up again. tom, you have covered the tech industry for many years. i joined this company and started working with you when over did not eat -- when uber did not even exist. it was just a black car service. how unusual is the story of this company? tom: it really met a deeply felt need. venture capitalists are looking for -- does this meet the need i had? for a lot of people, yes. but how do you scale that? how did you go from city to city and region to region and do that in a very silicon valley way? what we saw in early stages was its ability to enter a market and flout the rules. we're going to go in and move into this new territory and ask questions later. as they ask those questions and

regulators asked those questions, it just got harder and harder. we have seen them expand and now they have had a really retrench in a lot of areas. you are seeing the cost that that provides to the bottom line. emily: i want to talk about another story we broke last night about a prominent investor who had invested in uber and airbnb, shervin pishevar, has , being accusedod of sexual misconduct. we have documented six cases of unwanted advances or sexual harassment. one of those people is a long telling usxecutive he groped her at a party in 2014. he has denied these allegations the -- via a representative, saying he maintained a friendly

relationship with her. the denial was interesting. another person who was at the party talked about how he showed up with a live pony on a leash wearing a santa hat and could not have touched anyone because he had the leash in one hand and a drink in the other. similarly, he has denied allegations from five other women who we talked to who did not want to be named that he either sexually assaulted or harassed them. >> this is our opportunity to ask you questions or a change. you were really the author of this story. you really drove the story. it took a long time to come together. we've heard a lot of stories about sexual misconduct across silicon valley. why does it take so long to pull a story like this together? tell us about that. was involved in reporting the story as well. this has been a difficult story to do, the stories of misconduct related to men in power have

been difficult, but this one in particular was very hard. we started looking for the story back in july when we got a tip about a sexual assault that he was involved in allegedly in london. he was never charged. around the same time, we started talking to women and started collecting story after story of women who had unwanted advances from him, and we spent a lot of time trying to talk to these women about their experiences and to convince them to come forward, and some of these women had agreed to speak to us on the record -- tom: right. you wrote about this in the story. what changed their mind? emily: before any stories about this alleged sexual assault in sued ahappened, pishevar london research firm for being part of a broader smear campaign against him, and that very much discouraged more women from coming forward. the women that had agreed to give their names decided not to, and we ultimately told their stories on background, which was incredibly difficult.

successfullso the effort against the son to get an injunction on them to stop them from according the alleged rape in london. it has just been at every turn. this super powerful figure in silicon valley, someone who has donated more than $500,000 to top democrats -- hillary clinton, cory booker, kamala harris, president barack obama. this super connected figure, and i think it took a lot of courage or you and your sources to get the story out, and it has been a long time in the works and has been supercop located because of the situation in london and sort of an effort to muddy the water there, so getting these women who had experiences with him outside of the legal system was i think super important. we've been spending a lot of time today colin shepard capital, the venture capital callingcofounded,

calling thee, politicians he donated money to to ask what kind of action if any they are going to take. i did hear from uber who told me in a statement today they fully support those who have felt harassed speaking out whenever and however they choose and they commend their bravery. tom cole in his response is also -- i would like to go back a little to the denial. the denial focused on this idea "you later maintained contact with me," "we were on friendly terms." tell me about that one employee,t, newish and outside investor. you can imagine that she must have felt as if this is a person who had power and influence over her and that perhaps she wanted to maintain the cordiality of that relationship.

taking aishevar different approach than some of these other men who have been accused. he has outright denied some of the allegations. his attorney said they are confident the allegations will be shown to be untrue. we are doing as much is possible to get more statements from the people who are still connected to him. thank you guys so much for joining us. and for a team effort on this story. amazing bloomberg tech team reporters. ok, coming up, the largest proposed tech deal ever still has not gone through. we look at the latest delay in broadcom's effort to acquire one of its rival chipmakers next. this is bloomberg. ♪

"the new york times" is revamping its pay wall access.

the paper has scaled back the .umber of articles you can read those not subscribe will be able to read five free articles per month. more than that will require a subscription. the publication added 154,000 digital-only subscribers to the publication, a 14% jump from a year earlier. now to a story we continue to watch, broadcom's pursuit to acquire rival chipmaker qualcomm . an upped bid may not come until closer to march, when broadcom's board meeting takes place. the question is why? >> we think it is tactical. there has been consideration of a couple of options, esther if you put the directors forward first or up the money.

we understand qualcomm is also in the middle of its own attempt to make a huge acquisition. what is the status of that? >> shareholders do not like the price and qualcomm needs 80% of them to agree. probably not going to happen at that price point. they are most likely going to have to up that amount. toshiba's attempt to rescue itself. >> it has devolved into a very bitter legal fight. it looks like they are getting , whicho resolving that means western digital has a future in the chip business. emily: how do you expect this to

play out? if the broadcom/qualcomm deal happens, it would be the biggest ever in the tech industry. >> it is difficult to say. if all content get that in xp deal done, that would put them into position to much they should be worth more. if that does not happen, then maybe broadcom's offer to qualcomm shareholders looks attractive. looks like they could get almost $80 and be happy. emily: how long could this dragged on? goes all the way into a hostile takeover, we're looking at quite a long time. emily: years? >> i don't know about years, but we know the meeting coming up in march will be the main indicator of what will happen. king covers the chip industry for bloomberg technology. great to have you on the show. coming up, vmware has been

diversifying to keep up with demand for cloud services. we will talk to the ceo about managing its performance. that's next. this is bloomberg. ♪

♪ >> you are watching "bloomberg technology." a white house lawyer says michael flynn is the only one implicated by his guilty plea.

michael flynn admitted making false statements to the fbi. >> this is epic. this is seismic and proportion frankly. it means director robert mueller is getting high up in the food chain. there are few people left for generalet to between flynn and president trump, so it is all closing in on the president. a bloomberg columnist says president trump son-in-law and -- jarederod kircher kushner directed michael flynn to contact moscow. tennessee's bob corker will not vote for the tax overhaul. 51 senators are in favor of the legislation, and that includes the susan collins, who says to date she will vote yes. the european console president donald tusk says theresa may has

until monday to present her final offer on brexit divorce terms. a major impasse has been a hard border in northern ireland. u.k. said it must keep the irish border open. >> i have addressed the border many times. the best solution would be for the united kingdom to remain in the union and single markets, but as that option was thrown out, it must offer credible, concrete, workable solutions that guarantee there will be no hard border. the eu was behind ireland on the need for a border plan. argentina has called off the rescue mission for its missing some burying. -- missing submarine. this one disappeared off the coast of patagonia. continue, butl

without international assistance and only in waters up to 500 meters deep. welcomed then world cup at the kremlin palace. the teams gathered in moscow for the big draw. the team will be split into eight groups. russia will play saudi arabia in the opening game on june 14. the u.s. failed to qualify. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. emily: this is the "bloomberg technology."

vmware with stronger-than-expected numbers th. the company is embracing cloud services and the company's stock have shot up 50% over the last year. joining me now is the ceo from stanford. what you think is driving results right now? >> always great to have the chance to be with you. we would say three things are driving our performance. out,trategy we have laid the cloud strategy, partnerships with amazon, ibm, really resonated with customers. , and sales execution breaking out of tech. it is a good market for technology companies moving into

every business and every aspect of every business. so those three together, good results, and we are are excited about the benefits we are bringing to our customers. is the benefit of the deal so far? reallybenefit does not materialize in a substantive way this year or next year will but when we announced it, the customer said i understand how my vmware franchise will move a hybrid cloud world. the benefit of that is enormous for customers and they said now i know i can continue to invest in vmware and had you will give me the seamless ability to go to the cloud and take advantage of it in ways nobody else can, so

we have seen that be a driver since the end of last year. customers are really getting excited about it. we just announced the second version, general availability's number two. we will be expanding internationally next year. is customers say this something i can take advantage of for my business-critical application, let's go. talked over the last several months about the big being under the dell under ella and whether figure is really better. do you believe -- under the dell umbrella and whether bigger is really better. >> we described this synergy that dell vmware would bring to. -- would bring to vmware. i upgraded our guidance because we are seeing that acceleration.

we are seeing that in a variety of ways. marketsell can reach that we are not penetrated in two. local, so theyd are taking us into spaces we don't have the reach four. secondly, we are bringing solutions that bring customers more value. one example is the solution we built together with dell is having great success in expanding our storage-defined search products. very tangible results and benefits as part of the bigger dell technology family and michael and i are getting along well as we dream of the future together, so overall dell and vmware working extremely well together. emily: we have seen an opposite approach from hp, which has gotten split up, slimmer,

leaner. meg whitman will now be leaving hpe in february. do you think they took the wrong direction, or do think that approach can work as well? >> they have a very different business profile of where they are, and clearly michael has said bigger is better and meg whitman said we have to get smaller and more focused. they have taken different strategies, but they started with different assets and position in the industry, and obviously michael's strategy is working and he is having great success with that. a shareholder perspective, hp shareholders have been favorably benefited by the different moves they have made, and obviously we have a good partnership with hp as well. antonio taking over there, we have a great working relationship with him and look for to expand our relationship with hp and work with them and

other oem partners as we have a broad and multifaceted ecosystem. ability to work across the industry is a very important of our overall strategy. emily: thank you so much for joining us. in other news, twitter said it allowed anti-muslim videos retweeted by president trump because they did not break rules on for bid and content. that statement is a backtrack from an earlier rationale that said they were newsworthy. joining us now is alex webb. remind us what happened here. >> president trump reach we did three videos posted by britain first, a far right party on the fringes of british politics. they purported to show egregious acts by what it said were muslims. there is no evidence this is the case according to politico asked --

the prime minister condemned donald trump for re-tweaking them. notter was ask why they are taking these videos down. twitter's rationale is that this is newsworthy, which led people to think they were giving the president a free pass. he defines news by being president himself. what they have done now is look at it more closely and said it does not contravene the policies at all. tweeted it,account and jack dorsey retweeted it with a comment on top here at it shows the levels to which executives are getting involved with it and is something considered at the c-suite level, not middle managers for example. emily: what are the implications

of this?the criticism of twitter the rules andn enforcement have always been inconsistent, but clearly they are trying to work on what the rules are and how they enforce them. >> they are trying to create some elements of consistency and treading a difficult path because they don't want to see as having political leanings either way. of the page where they stipulate policy on videos, a comet now says the policy will be updated later this year to symbols andful hateful imagery, which suggests it might include this kind of thing going forward. emily: which would mean they will be deleted? >> it seems to be a tacit don't have the greatest rules right now and they need to change them but we don't quite know what will be defined in this new policy. emily: a fascinating story.

watching this all play out on twitter. thank you. we appreciate it. coming up, reports that two -- aheadeaming giants of their ipos. this is bloomberg. ♪

♪ emily: tencent posted its biggest weekly loss amid concern a rally was excessive. it retreated 3% friday, taking it's a decline this week to 7.5%. valueonth, the market topped facebook. , talks toth tencent

with spotify according to the wall street journal. investorst comes as anticipate both to hype he owed next year. will own an equal stake in each other's businesses. bloomberg reached out for comment. joining us now is lucas shaw, our entertainment reporter. how will this work? >> i do not know. heard reports of $.10 interest in spotify for some time and had reached out. aboutare often rumors companies, whether tencent or a tech giant wanting to buy spotify. it is a very appealing asset come and running a music service , it is hard making money to do that.

it sounds like tencent is interested in buying a piece of spotify, and this would be an opportunity to get a piece of the china market it will not be able to enter on its own. ,ou have seen u.s. services something similar with uber, so if you are spotify you take a 10% in tencent music, the only dominant player on the music scene. do we what information have or don't we have about these two companies and their potential ipos come spotify and tencent music? >> spotify will go public next year. as far as they have indicated, it will not be an ipo. they are trying to go the unconventional path of direct listing. this is being reviewed by the sec.

they are having to negotiate with major stakeholders because it is not clear how that would affect some of the existing deals, for example with tpg. is not trying this direct listing route, but tencent music is supposed to go public sometime next year. what sort of optimism is there around both of these ipos? in come up optimism more optimism in the music sector than there has been for some time because you are seeing real growth and you are seeing consumers pick up. revenue for example, from digital music has quadrupled over the past four years and overall revenue has passed $200 million. this is a country where piracy dominated. and for the first time in a long time you are seeing music companies excited about the music market in china and similar optimism in the u.s. thes cautious because

growth comes after two decades of decline, but these streaming services have driven a recovery of the market, so some investors would be excited about the prospect of investing in one of the companies. no music service seems to make money on its own, which is why tencent music has been part of rotter tencent, shielding -- broader tencent, shielding it from some problems there. the need to be profitable is not as great. spotify increasing time spent there, whereas pandora decreasing. tell us about it. a of whya is exhibit it is dangerous to be an independent music company. they came on the scene and where the first real online music streaming company. they got a lot of users, and then spotify, youtube, and other

started chipping away at it and it never became this profitable self-sustaining business because so much of the money goes out the door to the rights holders, so how do you stand on your own? emily: always great to have you here on the show. thank you. coming up, just in time for holiday shopping season. online luxury shoe startup is pushing into brick-and-mortar we speak with the ceo next. this is bloomberg. ♪

♪ a big takeover in the movie theater business could be agreed on by monday. regal entertainment will be bought by $3.6 billion by cine

world, allowing it to expand beyond its home market. expanding its brick-and-mortar reach in time for the holiday season. retailer of traditionally crafted italian shoes opened its third store in new york city. sat down with the founder of the company's headquarters in boston to talk about strategy. a market thated seemingly had no huge opportunities. we identified this shoe business as a great market to innovate and disrupt. the shoe business has been around forever and there are a lot of people doing it. that is why we thought the opportunity was unique. at the same time, we look at luxury industry, an industry that has seen years and years of rates excess from a business model perspective, but has not been innovated much, so we look

at the opportunity to innovate through the leverage of shoes and mixing great products, great tech knowledge he come a great supply chain in a very theatrical retail experience. >> do you consider? yourself a retailer or tech startup we are a consumer facing business that it is leveraging the best and most emerging technologies and supply chain innovations to drive a whole new consumer experience. it is the marriage of those two things that make this expense unique. we are a retailer because we want to sell things to the customer in incredibly innovative ways. so it really is the best of both worlds. >> let's talk about inventory. if you are introducing new shoes --ry week, how do you afford >> in the eye of the consumer, this is a fun, new, sexy retail brand you have to have.

if you pull back the curtain, we are much more of a data-driven supply chain business than anything else. we use real-time data to help us understand what inventory will sell and will not sell. the only reason we are able to do that is because our supply chain is so tight. manufacturing products for-six weeks before it hit the shelves of our store, versus the historical model where a luxury brand will start the design process and by the time it hits the stores, that data they may have captured is irrelevant. >> online returns are more common than in-store returns, how do combat that? >> it can happen. we can run a profitable business with return rates at the level they are. the trick is how do you make sure a return always equals a repurchase? so what we have invested in the most is, yes, you want to

mitigate returns, but you want returns equal retries, and that is where the team has excelled the most. investors,llion from what have you done with the latest round? any plans for expansion? expand in the physical retail world and open up locations next year. we have three stores, boston at the prudential center, soho, and columbus circle. >> why open retail stores? >> the physical world was important for two reasons. one, the brand we created is rich and full of content, and we want to have places where the customer can tangibly feel it and interact with it, our people, the expression, the material. and second, it is sometimes nice to try shoes on. our stores are not normal retail stores. and we them fit shops

have all sizes of the issues in the stores and incredible client services people that help you find the right shoe perfect for your foot and that you fall in love with, but we ship that to you two days later. the purpose for that is we don't want inventory across the country in all different locations because we don't think that allows for efficiency, and it turns out the customer loves the idea of not caring the stuff home with him. >> how do produce controlled growth? >> there is good revenue and bad revenue. bad revenue was expensive to get customers and those customers did not repeat. >> any plans for acquisitions or being acquired. >> not today. we are focused on building. >> ipo? >> not today. we are focused on building. we are in a good place financially, growth rates are good, and now we are obsessed

with the customer. the business is more than doubling and all of the metrics are headed in a really exciting direction. it sherage customer repeats, she buys over four so fascination and excitement and up session the client has for the brand is real. emily: that was bloomberg with the ceo of m.gemi. that does it for this edition of "bloomberg technology." next week, brian armstrong and the latest in the cryptocurrency craze. this is bloomberg. ♪

♪ david: did you ever think you would be chairman of the joint chiefs? colin: it was beyond any possible level of aspiration. david: people said this man should be president of the united states. colin: it never occurred to me. david: any regrets about never having run? some say it is a great job. colin: prove it. [laughter] david: a new national security advisor wanted you as his deputy. colin: hello, general powell. this is ronald reagan. yes, sir.