♪ emily: i'm emily chang and this is the "best of bloomberg technology," where we bring you all our top interviews from this week in tech. coming up, big tech and the tax overhaul. how will washington plan for the sector's offshore profits impact silicon valley? we will discuss potential scenarios if the bill becomes law. plus, a bloomberg exclusive, coinbase ceo brian armstrong offers his take on bitcoin, which continued its spike this week. how the online platform has nearly tripled its user base

since it picked up the cryptocurrency. and as big tech races to control your living room, we will hear from the brain behind amazon's alexa. first, to our lead. after senate republicans passed their version of tax reform in the u.s., we spent the week exploring the ways the proposed legislation could affect the tech industry. take a listen. >> it was a round of applause on capitol hill for gop senators as they passed their version of a tax bill. pushing the trump administration closer to its first piece of signature legislation. donald trump: if they sent it to my desk, i promise all of the people in this room, my friends, so many friends in this room -- it is a great state -- i promise you i will sign it. i promise. i will not veto that bill. reporter: tech companies have spent big to make sure their interests are heard. big tech stands to benefit from the legislation in a few ways. the latest bill would slash the corporate rate from 35% to 20%. although according to goldman sachs, the tech sector already benefits from a 24% effective rate.

then there is the hordes of cash stockpiled overseas. big tech stands to benefit with this new tax legislation that allows them to defer taxes on foreign earnings until they bring them back to the u.s. at rates of 7.5% to 14.5%, down from the current 35%. donald trump: if we get this past, which i really believe we will, we have to as a country, it is going to bring back, i would say $4 trillion back into this country, which right now cannot come back. >> in our view, it should be a deemed repatriation. this means it should be a required tax, and so, you are not asking the people that have had earnings from their international subsidiaries if they would like to bring back money. reporter: the current bill would make it a voluntary repatriation, though the question stands whether bringing back this offshore money will go into anything other than buybacks or m&a. lastly, telecom firms could win big if enhanced deduction for

the capital expenditures make it into the final bill. theoretically allowing them to upgrade the fiber backbone of the nation. for now though, the waiting game goes on until the final bill hits the president's desk. emily: as you just saw, the trump administration wants tech companies to bring back their overseas stockpiles of cash and in turn keeping companies like apple from fleeing tax havens like ireland where apple reached a deal over $15.4 billion on unpaid taxes, to pay those back. bloomberg gadfly columnist shira ovide joins us now. let's start with the actual rate. it is a lower effective rate, but the effective rate is already fairly low. how much of an impact is this going to have? shira: i mean, look, every business wants lower taxes. i think that has been clear in all of the debate about the tax legislation this year. that companies in tech and outside of tech are very happy to have a lower tax rate, even as -- as you said -- a lot of companies are not paying the 35% statutory rate because of tax breaks and other reasons.

emily: so what about repatriation? how much money is this actually going to bring back? $4 trillion? shira: i'm not sure where he got the $4 trillion number. there are several million parked offshore that are considered permanently reinvested. therefore not taxed at 35%. but you have seen the ways companies like apple have basically done self repatriation. apple has $250 billion parked overseas, but they have also borrowed $100 billion in the last few years to do things like buying back their shares, issuing dividends, things like that. and you can look at that as a way to repatriate money without paying the tax, which is what apple might be able to do under this proposed legislation. emily: now there had been concern about stock option legislation that was not in the house bill and was dropped from the senate bill. where are we with that? shira: basically a startup community's worst nightmare.

saw ventureenture fred wilsonlike from union square, who basically spoke out and said this was a version in both houses for a while that looked like it was going to force start up companies to pay taxes on tax options and restricted stock effective immediately, even before they were able to sell those shares. that certainly would have put an undue burden on a lot of corporate workers here in silicon valley. emily: what you make of the deal apple has made with ireland? they have come to terms on an agreement, the terms of an escrow fund to pay back taxes they say they owe. shira: this dispute over irish taxes with apple is going to carry on for many, many more months. basically, if you remember last year, the e.u. antitrust authorities said to ireland, you have improperly given apple a tax break that has allowed the company to avoid something like $15 billion worth of taxes over the years, and you have to go get that back, ireland, from apple. and there is basically a dispute about what to do with the $15 billion while apple, ireland,

and the e.u. fight about that money. emily: how do you expect this to play out? shira: it is going to be in litigation for a long time. even if apple has to pay $15 billion, oddly for a company of apple's scale, $15 billion is not a big burden. emily: that was bloomberg gadfly columnist shira ovide. this week, prominent tech investor shervin pishevar, who has been accused of sexual misconduct, said he is taking a leave of absence from his duties at venture capital firm and transportation company hyperloop one. five women who met him in a professional context said they were sexually assaulted or harassed by him. current and former colleagues of a sixth woman say he groped her at an uber holiday party. pishevar has sued the definers, a research firm founded by republicans, for spreading false information about him. the definers has responded to the suit, saying they had nothing to do with his

accusations, and the suit should be dismissed. in a statement, pishevar wrote "as the legal case progresses, it is my priority to ensure the family is not adversely affected. i am confident i will be vindicated." this week, google won dismissal of a california action lawsuit saying the company systematically paid male employees more than females. san francisco superior court judge mary weiss wrote "the definition does not purport to distinguish between female employees who may have a valid claim against google versus those who do not." she allowed the women to file an amended complaint. the new complaint will make clear that google violates the equal pay act by paying women less than men for substantially equal work. coming up, just days away from it cboe debut, bitcoin kept climbing this week. how bitcoin futures could impact the online trading platform coinbase, that is next.

and if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com and in the u.s. on sirius xm. this is bloomberg. ♪

emily: bitcoin continued to climb this week. the largest cryptocurrency by market value was selling for less than $1000 at the start of the year. in recent days, several exchanges have come out with news on offering bitcoin futures. we caught up with coinbase ceo brian armstrong on wednesday. coinbase is an online platform that allows users to buy or sell bitcoin by connecting with their bank accounts. it has almost tripled its user base this year, now standing at 13 million accounts. brian: well, there has certainly been this new influx in new interest in digital currency. part of that has been driven by institutional money getting really interested in the space. so we have seen most of the large derivative exchanges out there -- cme and a number of others -- starting to say, they are going to list bitcoin futures. that has driven a lot of

interest. it is a big signal that traditional financial institutions are now starting to move into digital currency. emily: with the cboe, sme, nasdaq, what does it mean for you? does it create new challenges? brian: number one, it is a big endorsement of the digital currency space as a real asset class that more and more players are going to trade. but i think for us specifically what it means is we offer spot market data to a number of providers or we are discussing it with them. we run the largest institutional exchange in the united states called gdax for digital currency. the other thing is that we are offering a custodian product where a lot of institutional investors need a way to store digital currency on behalf of their lp's and their clients. we launched a product for coin-based custody. those of the ways it might influence our business. emily: are you at all worried your clients might decide to work with traditional main street wall street companies rather than coinbase?

brian: well, i mean, i think it is certainly an option. there will be more people involved in the digital currency space. we are not going to be the only ones, and i think that is a good thing. there is just going to be a diversity of players out there. there will be a lot of winners. digital currency is moving so fast that i do think a company dedicated to it with 200 people who have built up this industry knowledge over the last five years will have a competitive , sustainable advantage. emily: we have to talk about customer service. you have been experiencing a glitch, as you have with prior surges. why does this happen? brian: yeah. i mean, it is in a word, hypergrowth. we have hired from about 40 customer support agents to about 220 or so this year. by the end of next year, we will have another 400 or so. emily: in addition to the 200 that you already have? brian: yeah, and we also launched phone support this year. we are going through a period of growth that is almost never seen in business. you know, it is really difficult , to be honest, to keep up with this amount of demand, and we are not servicing our customers

to the level they deserve at the moment. that is really frustrating to see, but it is my job from the top to ensure we will get there. emily: can you explain why that happened? is it a glitch, is it a crash, what is happening technically? brian: oh, no, it is just a huge influx of new customers. so our volumes, whether you look at it as our trading volume, new sign-ups, everything, it has gone about 8x since june of this year, which is just unheard of. it is difficult to plan for that kind of capacity. emily: it is literally that you don't have enough humans behind the scenes to receive all of these complaints? brian: correct. emily: in addition to hiring new people, is there anything else that you can do? brian: certainly, we can always improve the product. right? i mean, improving the product is the way to reduce the number of customer support tickets that are coming inbound. the team is working really hard on that. the key metrics we are looking at is up time, average time to customer response, the core metrics we are looking at to make sure we are meeting our customer demands at this time. emily: do you have any concerns that this will decrease trust among your customers? or is that new customers you

will lose your customers as a result? brian: honestly, i do have that fear. yeah. it is really difficult to go through a period of this rapid growth and maintain the same level of service. we have been watching those metrics, and they are not where we want them to be. growth is a really high quality to have, but it doesn't mean it isn't a big problem. i think especially in financial services, we are held to a higher bar then say the twitter fail whale. we are storing people's money , and people are right to call us to a higher standard. emily: the irs has been asking for more information about your holdings and profits. what are you hearing from your clients about this? brian: yeah, well the irs sent us a subpoena for a large number of customer records -- in fact, all customer records over a several year period, which was pretty unprecedented. we did push back on that strongly. we took it to court. the judge, i think, gave us a big vote of confidence, and they reduced the scope of the request

by 97%. it wasn't down to 0%, which is where we think it should have been for something that broad, but it was certainly a partial victory. i think if you look long-term, look, we want to help people pay all of their taxes on digital currency gains. what i think this should look like is something like fidelity or charles schwab where everyone gets 1099 statements. the irs gets a copy, the customer gets a copy. it should be that simple. we are working with the irs now , thankfully, to make sure we come up with some kind of a solution where everybody pays their taxes. this is one of those new areas technology keeps finding a new box that doesn't fit into the existing framework quite perfectly, and we need to work with everybody out there to make sure we get there. emily: given the uncertainty currently as you work this out, are you giving any advice to your clients about how to report their gains to the irs? brian: obviously we try to stay away from any tax advice since that is not what we do, but we do provide a report to our customers, a cost basis report that they can send to their accountant. that is the solution we have in the interim until there are 1099's. emily: let's talk about what is happening with some of these

other cryptocurrencies, ethereum and lightcoin you can trade on coinbase. what do you see happening with ethereum versus bitcoin? brian: they evolved down different paths. bitcoin used to be 90% of the market cap of digital currency, and it has come down quite a bit. i think it is something like 50% or 60%. bitcoin is ending up, in my mind, being a little like digital gold, if you will. it is kind of the oldest digital currency. it is the one people flee to in times of uncertainty. but it has not scaled to become, for example, a payment network with the transaction put through people might want. so ethereum has kind of grown to do that, and ethereum is now doing more transactions per day than bitcoin. ethereum also has this really new, innovative concept of smart contracts. it is much more programmable than bitcoin. bitcoin, you can think of it as a function calculator. ethereum is almost like a program language where you can

write any software and run it on a globally decentralized computer. that is kind of a mindbending concept. let's say ethereum is much higher input per second and is much more programmable. emily: you have launched a new app called toshi, which seems sort of like an app store for ethereum. explain what you are trying to do. brian: the analogy i like to use is the internet. when the internet started, it was really difficult to use. and then a browser came out on top of the internet with netscape, and it made it easy for anyone to build an app and also access the internet. we are doing the same thing with toshi. toshi you can think of it as a browser for the ethereum network. we are trying to make it easy for any developer to build an app and users to use.

honestly, we are a little bit inspired by things like wechat in china and pay tm in india, even that one in kenya. mobile money is a big deal outside the united states. i think people in emerging markets could actually use digital currency to start to get access to financial services through something like toshi. emily: so when it comes to the price, how do you see bitcoin versus ethereum playing out? i mean, do you see the bitcoin spike continuing? do you see ethereum surpassing bitcoin? some have suggested it will. brian: i don't like to give investment advice, but in broad strokes the way i think of it, bitcoin does have a certain amount of guaranteed scarcity built-in. there is only ever going to be 21 million coins. if something is more scarce, the price can be driven up. ethereum has taken a different approach, which is that there may be a moderate inflation curve, almost like the u.s. dollar. it might target 2% to 3% inflation per year. they are actually still deciding what it is going to be. ethereum is not trying to be gold, which is what bitcoin is. it is trying to be more like a payment network, something more programmable.

that factors in to what the price will be. one other really broad thing you could look at is, where are the users going? you know, and where are the developers building the new apps? i personally see more developers building apps on top of ethereum today, so that is one other factor which could point to what it might be in the future. emily: we talk about this a lot on bloomberg. is bitcoin a fraud? is it not? are we in a bubble, or are we not? if it is not a fraud, is it a bubble? what do you think? brian: [laughs] certainly don't think it is a fraud. is it a bubble? maybe. digital currency has gone through a number of these periods where there is a plateau each time and it comes up and it comes back a little bit. so i think we are going through the most recent run-up period, it is probably the fourth one we have been through as a company. i expect it to correct at some point, but continue over time in an upward channel. emily: there is an update to the bitcoin network called segue, which would speed up transactions. you guys have not implemented that. do you plan to and when?

brian: yeah, it is one of the things we are looking at adding. it is probably not in the next top five things customers are requesting. emily: what are the top five next things? brian: people want more assets on the platform. they want a better experience, meaning identity verification, higher limits, the sign-up, onboarding experience, and they are asking for these new products. institutional customers are asking for a custodian product. you know, people are looking at a way to just trade more assets, have a better experience, and store it securely. emily: that is coinbase ceo brian armstrong. broadcom postso fourth-quarter numbers that beat across the board as it tries to pull off the biggest takeover in tech history. this is bloomberg. ♪

emily: google is ramping up for a hiring spree.

the company is recruiting thousands of reviewers to reduce the number of inappropriate videos on youtube. it is also introducing tougher restrictions on advertising and making greater use of smart technology. and by 2018, google aims to have more than 10,000 people to review questionable videos on the platform. the announcement comes as youtube looks to bounce back from a string of embarrassing incidents of questionable content that has been discovered on its site. now on the earnings front, broadcom beat across the board in the fourth quarter and gave an upbeat sales forecast, indicating that its smartphone customers are optimistic about demand. this as the chipmaker attempts to pull off the biggest tax deal tech deal ever with an acquisition of qualcomm. our bloomberg editor at large, cory johnson, joined us with more. cory: they are interesting because they have gobbled up lots of different parts. you mentioned qualcomm as a potential acquisition, but they have already gobbled up some interesting and big parts of the semi conductor world. avago buying broadcom. avago having great success with

the iphone. brocade, we were talking about someone who worked at brocade, who got acquired by broadcom, that company also dominates in the storage business. but the results we see today from broadcom, looking back at the quarter that ended in october, really strong iphone business. what we see here is really great strength in gathering more and more silicon not in the old iphone, but in the new iphone. and we see that business really showing up in the results. 17% year-over-year growth in the semiconductor space is very strong, very, very strong for a business this egg. -- big. emily: we have seen the danger of relying on apple as a customer. how much does broadcom rely on them as a customer as opposed to others? cory: it is absolutely the most important customer. and you know, looking forward to the qualcomm m&a, broadcom has been unsuccessful at getting apple to pay whereas others haven't. qualcomm has been unsuccessful at getting apple to add more

real estate in the phone. broadcom has been able to add more real estate in the phone. interestingly, you know the quality of the phone calls apple likes to boast about -- remember how crummy the phone was when it first came out? emily: i remember. cory: it was not just that the service was bad. it was actually hearing the calls was more difficult. broadcom has a great chip that sits at the bottom of the radio chip and helps understand or helps us to listen a little better to the signals that come in through the phone and understand what we are saying to the phone. it helps power siri. those kinds of chips are important to apple, and they are relying on broadcom. you can see those sales in this quarter. what we don't know about yet and , and we will learn about at this conference call goes in is selling new routers, selling and servers. think of the companies in technology that are really struggling now.

hewlett-packard having horrible problems, cisco just barely coming out of a turnaround having trouble selling hardware. oracle's sun business struggling. ibm hardware business, having a really hard time. yet we see this growth in amazon web services, in microsoft azure, in google's nascent efforts in the cloud. what we see there is they might be buying chips from broadcom themselves. not going to hewlett-packard or ibm to buy hardware but buying chips from broadcom. that is what i want to hear about in the conference call. what kind of success are they having selling into the white box manufacturers at amazon, at microsoft, and at apple and facebook? emily: what kind of update, if any, will we get on the progress of this potential takeover? cory: a lot of swimming upstream for broadcom. the thing that they could really do to sway the market, that would be to talk about financing and talk about how they can afford this. the financial guidance they just put out in this earnings report, the call that is just beginning right now, the guidance is nebulous. it is, hey, in the future, we are going to see margins go from 60% to 65%. we are going to see increased rate free cash flows as a

percentage of net income. we will have a much financially stronger business going forward. they are not putting dates on it, but they are telling us the business is going to get a lot -- will go from really good to really great. i don't know if we believe them or not. they don't have a history of missing targets. emily: it is more typical to -- emily: right, and it is more difficult to have a time frame. cory: it is difficult for companies to give us a time frame in guidance. they usually have a year or two out. they are saying it eventually. nevertheless, it suggests they see great things for this business and would give them the kind of financial leverage to do an acquisition and borrow the money to do so. emily: bloomberg's cory johnson there. still ahead, the brain behind amazon's alexa. our exclusive conversation with our guest ahead. and a reminder all episodes of "bloomberg technology" are live streaming on twitter. you can check us out at bloomberg tech tv, 5:00 in new york, 2:00 in san francisco. this is bloomberg. ♪

♪ emily: welcome back to "the best of bloomberg technology." i am emily chang. in 2014, amazon introduced the echo, a new category of device designed around your voice. the echo and alexa with it was only available for amazon invited prime members. that changed in 2015 when they were introduced to the general public, bringing ai into our living rooms and sparking competition between tech titans. we caught up with amazon vice president and head scientist at alexa rohit prasad for an exclusive interview. rohit: the set of skills will continue to improve daily communication as we know it. everything is changing with the behaviors and how we interact with alexa.

you set your alarms, you listen to your music through alexa, you control your smart devices through alexa. next what you will find, we are transforming from more natural transactions to more deep conversations. if you look at this, we have been working on -- together with the others the alexa price competition where the goal is to build social bots that can talk to you for 20 minutes in an engaging fashion. this is incredibly hard. even for a human in a party, at a party where you have to talk to a stranger, 20 minutes is a very hard barrier to beat. emily: so are you focused then on making alexa more humanlike and more conversational? rohit: absolutely. we are focused on making alexa smarter every day and humanlike as well. from that perspective we are looking into how alexa can understand many different types

of context. one of the common contexts that is humanlike, that we as humans are able to do quite well is how we carry information from the previous turn. if i say play -- what is the first album from adele, and play it, then you know the references. similarly, context comes in various forms in terms of geographical and regional context. if you are saying, when are the spurs playing next? we mean spurs in the u.s., it will mean the san antonio spurs, whereas in the u.k. it will mean the soccer team, tottenham spurs. these are some ways we are already making alexa smarter, and it will just keep getting better and better. emily: what trends are you seeing in how customers are using this to shop, and what are you doing to encourage them to shop more besides simply discounts?

rohit: alexa is about improving daily convenience. as part of everything we are doing to improve daily convenience, shopping is of course an important aspect but not the only aspect. one of the things as our tenet in general is to reduce friction or to make interactions as seamless as possible with alexa. where we are seeing that happen very well, if you're trying to buy the daily consumables, like in terms of, like if you said, alexa, reorder batteries, or alexa, order batteries, those are working very seamlessly. and now with devices like echo show, we are also making it possible for you to look at what you are buying. and if you said, alexa, buy a blue shirt, you can see the blue shirt on the screen, the multiple options that are available, and then browse just by voice or select by voice, which makes it seamless to buy things and making it easier when you are looking at stuff that needs to be on the screen for you to make the decision. emily: i am curious about

privacy. what information is alexa collecting and keeping, and then allowing developers to access? rohit: so privacy is first of all very important to us. and that tenet is based on being very transparent with our customers. so in terms of -- i will start with first, if you look at how transactions happen in the, alexa only listens for the weak word on the device. nothing else. it is listening for a particular step it of what you said with whatever sounds like alexa. then when it is confident a wake word was spoken, then it starts streaming to the cloud. you see clear visual indicators, on an echo for instance, a light comes on. on the echo show you see a light bar with a blue ring around it on this screen, which makes it very transparent. what we have also made clear is

that customers can go to their application, and the companion application that is on your smartphone or available through your web interface, you can look at every utterance you have spoken to alexa that has been recorded in our cloud services. and then you can choose to delete them, or delete all of them as an option for you. and the reason that audio is collected is for making ourselves better for the customers. emily: i am curious about partnerships. you have a partnership with microsoft. what can you tell us about the potential for more partnerships? when we spoke to someone who also works on alexa, she said anything is possible when it comes to a partnership with apple or even google for example. rohit: we spoke to them before. we are very open to partnering. we know our customers would want different choices. if you look at our partnership with microsoft, we are making it easy for microsoft customers who use cortana to use alexa, and vice versa.

so we are very open to this partnership because we want the best experiences for our customers. emily: and how do you view the competitive landscape? because some people are having rave reviews about google home, the home pod from apple is coming out next year, and it is getting more crowded. rohit: i think it is great that so many people and companies are interested in this space. i think that is great for our customers. but at amazon we are customer centric, and we work back from our customer needs. we have been privileged to have millions and millions of customers using alexa every day. that has given us clear needs that we need to solve for our customers, so we are focused on that. i would also point out that we are essentially a voice first interaction paradigm, and that is where our focus is. our mission is to get alexa everywhere.

in the homes, in cars, on the go, and now even in the workplace. emily: amazon vice president and head scientist at alexa rohit prasad. wework does not appear to be scared of any of the downturns from brexit. the office sharing startup is set to become london's private renter of offices, this according to data compiled by costar for bloomberg. wework currently operates 17 london facilities and has announced expansion plans at 10 additional locations. it is also in talks to buy a 12 building campus near the liverpool station for $800 million. and facebook will increase the size of its staff in the u.k. by 50%. the company is hiring 800 employees in london, predominantly in engineering rules. facebook is under scrutiny from british lawmakers who are concerned about russian interference in u.k. politics via social networks. and still ahead, autodesk shares have collapsed.

we sit down with the ceo for an exclusive interview. plus, airbnb wants to be the top destination for sustainable travel. a top exec joins us on their strategy ahead. this is bloomberg. ♪

♪ emily: a european union court has sided with apple in a trademark dispute with chinese phone maker xiaomi. judges ruled that it could easily be confused with the u.s. tech giant's ipad. xiaomi applied for a trademark and can appeal the decision one more time in the e.u.'s top court. well, the united nations designated 2017 as the international year of sustainable tourism for development. and airbnb is using the u.n.'s guidelines to showcase its potential as the top sustainable option. we sat down with chris lehane who heads airbnb's global and policy public affairs and began by looking at the company's growth. chris: what is really, really

interesting, we are seeing travel and what was traditionally called the flyover areas, and also an emerging economies. if you look at a recent report, it shows 250% growth in indianapolis, indiana. and i think what that really speaks to, the network effect of the platform as it spreads out, more and more people -- those are places that have been traditional accommodation options. hard for those hotels to justify buildouts. when you have the indianapolis 500 or the big ten football championship -- the big ten football championship was in indiana last week -- you see our platform spring to life. emily: you are expanding in asia, africa, the pacific. what has been the biggest challenge? chris: for us, it is just the pace of the growth. right? that is a high-class challenge. by the way, we just had our best quarter. we have now over 250 million able on the platform. this growth is just taking place underneath us. for us, it is incredibly important that we make sure it

is working as best as possible for our guests and our hosts because 60% of people who use airbnb do so on the recommendation of a friend or family member. and i just came back from jamaica, tough travel i realize. but the u.n. had a conference on inclusive travel, how you can use travel as it becomes a bigger part of the economy, and how you can make sure everyone is benefiting from it. and from a sustainability perspective and from a economic and quality perspective, a big part of what we talked about, by 2030, most travel will take place in these emerging markets. how can we begin to do things now to make sure entire communities are benefiting from it? folks see us, given that we are making travel accessible to traditionally nontraditional areas where people travel to, as part of that solution. it is exciting but an interesting thing to have a conversation with the front end. of this whole trend. emily: any insight into whether trump's policies will impact international tourism? chris: it is a great question.

i will say we have not seen that yet. we have been out front in terms of opposing the travel ban. we actually had a whole campaign called "we accept," which was really built around that. we have not seen that in terms of actual travel. with the u.s., i think what you potentially see that is the u.s. brand, the home of the statue of liberty, does that take a hit as a result of that? and then, as a derivative of that, travel and tourism, it is growing so fast, i am not sure that is going to be the case. you do see the reverse of it in the following way. which is when i was in jamaica, i had a number of countries came up to talk to us about how we could work with them to make our data accessible to them. in other ways to help inform their marketing because they are looking to diversify their travel or their inbound. where people are traveling from to go visit their countries.

they were specifically concerned about becoming overly dependent on the u.s. for travelers and wanting to diversify. i think that is really being driven by some concerns about issues that are taking place here in terms of how welcoming the u.s. is perceived to be. emily: you worked in the clinton administration. chris: i am an old guy. emily: we recently covered sexual misconduct of the mantra work, and also an investor from airbnb gave money to hillary clinton. what is your response to these allegations? chris: we believe what the women have said out there. it has been a long time coming, and it was very much needed. we are in the second transition in the world, particularly in this country in terms of people willing to speak up and stand up on an issue that has been taking place for forever. i just -- every day you read the stories, and i am incredibly impacted by the courage of these victims, these women to stand up and talk about these issues. and so obviously, they are hard to say. we condemn any of that type of activity. we certainly believe what the women are saying out there.

but i think you know even more broadly, we do see we are in the middle of a significant transition in what social mores are and how people look at these and how people accept it, and how the press covers it. how willing people are to talk about it and engage on it. and that is incredibly important if we are going to address the underlying substantive challenges. emily: that was chris lehane, head of airbnb's global policy and public affairs. autodesk shares tumbled after the fourth quarter report in november. the company has hit a rough patch with layoffs and slumping subscriptions. cory johnson speaks with ceo andrew anagnost for an exclusive interview. andrew: there are several markets that are quarter less. obviously the engineering market, that is the history. we are also a big player in the product and manufacturing space. we are becoming a super important emerging market is construction. we have always been big in the a, b, and c, but now also the c.

cory: it is interesting in the procurement, if you work in procurement and design, in the actual design process you have a lot faster and a lot cheaper projects. andrew: it is even more than that. what is happening in construction is it is industrializing. construction processes are starting to look a lot more like manufacturing processes. you know how digital manufacturing processes are. construction has got to be exactly the same. cory: you announced these big changes in the business model, particularly the move from maintenance to subscription, and how that is maybe a little bumpier than you may have thought. the stock took a hit last week. in context you sold about 72% in a two-year stretch. it is still a good run. andrew: it is a great run. corey, we announced great results because we hit our goals. we exceeded a few. 25% recurring revenue growth.

we returned to revenue growth. remember we were going to the dip, so we were negative for a while. we did exactly what we said we would do. i just think people expect this to do a little bit more. cory: why would a customer switch from maintenance to a subscription-based fee for your service, as opposed to just abandon it and go somewhere else? andrew: you probably talked to a lot of these companies all the time. most of our customers are seeing companies like salesforce, the way they buy software now is subscription based. it is the kind of subscription they like it, can turn it off and on as they need it. most customers are saying this is the way the software industry is going. there is really not a lot of resistance. maybe from smaller customers, but not the bigger ones. cory: so a lot of people worth thinking what of the call last week? i kept hearing questions about the timing of the restructuring. why do the restructuring now? and and what does it have to do with your long-term 2020 cash

flow goals? andrew: it was interesting these conspiracy theories. cory: there were a lot. i am a collector of conspiracy theories. andrew: there were a lot of ones around that. there is the famous john f. kennedy quote, the best time to fix your roof is when the sun is shining. we had been planning this for a while. we knew we needed to invest more strategically in digitizing the company and in particular in construction. the money just wasn't in the places we needed it. we are going to invest every penny back in the company over the next six to 12 months. this isn't a reduction in our office envelope. it is a reshuffling of where we are spending the money. cory: what does that mean for headcount? is headcount going to be the same? andrew: headcount-wise we will be as big a company as we were before the restructuring. cory: where do those resources have to be? where were they may be in the wrong place, and where do they have to go now?

andrew: we had a bunch of initiatives where we were not doing what we want to do. we were digitizing the company and becoming a super modern digital company. reimagining construction and manufacturing. we had projects that were not in alignment with that. we essentially took out entire projects and we are shifting the money over to those that are more important. cory: there is a concern over the subscription number, just how many customers are joining the subscription service. talk to us about what the story is there and what you expect it to be. andrew: i think that was the biggest piece of turbulence from last week. we delivered a solid result from the core. which is what matters. you cannot deliver without strength. cory: when analysts are modeling this out, you get down to a unit number, you get down to a a revenue per subscriber, maintenance per subscriber. and when those numbers come down, you are switching to a revenue recurring model, that starts to matter more. andrew: that is the exciting thing though. the revenue per subscriber for the subscriptions that matter is up 20% year-over-year. what they got spooked by, and it is natural because it is a complex transition, we just said we will do fewer clouds subscriptions.

those cloud subscriptions are not important to our two year goals. cory: why? andrew: that is what spooked them. they are small relative to the core. small revenue per customer too. but they are going to be bigger 3, 4, 5 years out. they are just small relative to the two year goals everyone is paying attention to. cory: what about product development and innovation and the kind of things you want to innovate around? andrew: in terms of what? cory: in terms of your investment. andrew: what it means is we are going to be investing a lot in how people reimagine and the construction and manufacturing processes. you probably know this. construction is the lowest invested in i.t. right next to agriculture in the u.s. i think in europe it is below agriculture. this industry needs to be transformed. and it is investing crazy in digital technologies now. when you look forward, what we are going to be doing is helping our construction customers become manufacturers of building. emily: our bloomberg editor at large cory johnson with the ceo

of autodesk. still ahead, jakarta-based go-jek has its eye on an ipo. our interview with the ceo and how he is fending off competition. this is bloomberg. ♪

♪ emily: this week lyft announced its most recent funding round -- that brings the total to $11.5 billion. this was led by alphabet which backed uber early on. but now uber and alphabet's waymo are in a lawsuit. lyft has gained significant u.s. market share as its main rival, uber, faces a string of scandals and legal battles. meantime, go-jek is facing competition from grab and uber in southeast asia, but the ceo

is not concerned. he says softbank and uber does not matter. he declared 2018 as the year his company's payment platform will take off. bloomberg's yvonne man spoke with him from the year ahead asia summit in jakarta. nadiem: i think it is one of the most epic and innovating battles in southeast asia. they are incredibly -- they are both incredible companies. it is an honor to compete with them. best technology in the sticks of ride hailing and the largest juggernaut with amount of funding. it is an incredible challenge to have for go-jek. i think a big reason why go-jek got to our place today is we have been pushed to our limits, so we have had to hyper innovate to adapt. we came on top in indonesia as a result. the urge and hunger to innovate. yvonne: they are encroaching into a lot of your market share as well as a lot of the services

you are providing. does go-jek have to change their strategy? nadiem: no, i think our product strategy, our entire competitive strategy is designed around flexibility, hyper diversification, and mitigating risk. right? because we have so many different verticals that interrelate with each other. it is very hard to deal with this animal called go-jek. you think you are competing with us on ride hailing, but actually you are competing with us with the user that uses food and ride hailing. you think you're competing on food, then, wait a minute, this is a wallet player that is leveraging that in order to further reinforce its food and transport. we are a difficult animal to get. as a result of that, a little bit of that business jiu-jitsu that we have, that is how we

survive and come out on top against some of the largest companies in the world. yvonne: your payment system you said is going to grow aggressively. what are the plans for 2018, especially given the fact it is becoming a very crowded and competitive market? there is many people really diving into this now. nadiem: sure. just to address that point, we are actually the only large tech player in indonesia that has an e-money license. right, and that scale? that is a pure tech player. or one of the few. so the rest of our large players in indonesia don't even have an e-money license. that is a good advantage in having some lead time to expand. so we are ahead of the curve a lot, but obviously competition will come in, and we are expecting it, and we are embracing competition, because that is what makes our product great.

so i think of 2018 will be the year of go pay for go-jek. that is when go-pay travels outside our app ecosystem and starts being accepted in a variety of off-line establishments and a variety of online establishments. so you are going to see 2018 as the year of partnership. there is a very, very long queue of partners that are trying to integrate to go pay right now. yvonne: what do you make of the investment that softbank has had and made on uber? for that lead to more consolidation in southeast asia? nadiem: to us it is extremely important to have the integrity to pursue our vision. that is the only way we are always going to be two steps ahead, by beating to our own drum. it doesn't really matter right now. we have always been the underdog in terms of funding. we have always been the underdog in terms of resources, and we still come up on top. it is not about how much funding you have, it is about how hungry you are to create exceptional product experiences. emily: that was bloomberg's yvonne man with go-jek's ceo. that does it for this edition of "best of "bloomberg technology." we will bring you all the latest in tech throughout the week. you can tune in each day, 5:00

p.m. in new york, 2:00 p.m. in san francisco. and remember all episodes of bloomberg tech are live streaming on twitter. check us out. that is all for now. this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. >> welcome to bloomberg businessweek. >> in this week's issue, why traders are beginning to worry about according. >> and a test lab for fake news. qwest and a casting call for beautiful people at a valid a party. >> all of that is ahead. ♪