>> let's start with a check of the first word news. fewerent trump has sent mexicans come this year than barack obama in 2016. but 150,000 mexican nationals were reportedly repatriated in november. the president will kick off the new year by meeting with top republicans. mitchl meet with mcconnell and paul ryan at camp david to draw up again.

for the 2018 legislative agenda. in jerusalem, plans are underway for a new train station next to the western wall, and it could be named for president trump. israel transportation minister says the move will be a thank you to president trump for recognizing jerusalem as israel's capital.

former president obama and hillary clinton remained the most admired men and women among americans. mr. obama beat out the current president 17% to 14%. pope francis rounds out the top three. hillary clinton is on top of the women's list for the 16th straight year, edging former first lady michelle obama. the current first lady, melania trump, garnered 1% of the vote. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. ♪ cory: this is "bloomberg technology." coming up, big tech, big success in 2017. the headwinds in the coming year. we will discuss. among the top cryptocurrencies of the year, it is breaking out from bitcoin. the ceo, brad garlinghouse. a look back at tech leaders who helped shape 2017. satya nadella, sheryl sandberg, and first, our lede. big-cap tech holding on historic gains thanks to record profits, a solid user base, and promising user growth. big gains for the biggest names in technology, but a big tech reckoning could come in 2018. here to wrap this up, a man who casts his own shadow, james cakmak. good to see you, as always. it's interesting.

i love the way you have covered these companies. you are at a lot of these very big companies, but with a skeptical eye. some of the tough issues we have seen them show. when you look at them, who has the toughest haul in the coming year? james: it's been an interesting year because all these companies have posted tremendous financial successes and have definitely grown much bigger than i think many thought at the beginning of the year in their own right. at the same time, we saw all this regulatory scrutiny across all the companies. the election didn't help with that scrutiny. as we look to 2018, i think you can handicap it as amazon is likely in the driver's seat when it comes to favorable tailwinds, winds when it comes to regulatory environment. as you move down that list within the same group, i think google is next. they used to be the politically

savviest. then you have facebook. it's going to get worse as we approach the midterm elections later in 2018. i think that scrutiny will only escalate from here, at least from a headline perspective. cory: so, twitter, facebook, youtube, part of google -- do you think that hurts financial results? over the weekend, facebook introduced a feature that lets you find out if you have retweeted or favorited or reposted something from a russian fake news site. it was done very quietly over the holiday weekend. james: financially speaking, it's full steam ahead for all of these companies. amazon continuing to gain share versus traditional retail. facebook continuing to gain share versus traditional media

outlets. google, the same story. twitter, they are trying to carve out a path of their own, going more niche. these companies will continue to grow. cory: so what you're saying is, a lot of headlines, who cares? it's not going to affect their financial results. james: it's not going to affect their financial results, but you do have to think about, from a stock perspective, the degree of multiple expansion. we have the earnings power, but at the same time valuations have been steadily rising for all of these companies. they are still relatively attractive for valuation relative to their growth rate. but i do think that is something that investors will definitely need to consider. cory: so, do we separate investment results from some of

those other companies? there is no company that -- they used to say when mike wallace would knock on the door, don't answer, because "60 minutes" is outside, trying to bust you for something. amazon scares every business. will regulatory concerns concern amazon, not least of which because this president does not like "the washington post," which is owned by jeff bezos? james: you have amazon moving closer to all the federal agencies with aws. you have them shopping around their second headquarters, where all these cities are clamoring for the attention to get that. cory: which means they will tick off every single city they didn't choose. it will make political problems. james: at the same time, you have all these new fulfillment centers that will open up. amazon is safe for now, i think. but once you trigger some major headlines, such as reaching $1 trillion in value, i think that will reopen the floodgates for regulators to come in. right now, i think regulators are more focused on things that could potentially affect the

election. because if this was actually an issue, the ftc would have scrutinized the whole foods acquisition a lot more than just a one sentence response, which we think was -- cory: you are putting your faith in government regulators, really, james? james: i'm just saying that there are priorities and there are incentives. what are the regulators incentivized to do? they are incentivized to attack the things that can affect their political prospects. cory: i will give you that. i was just giving you a hard time. james: the bigger story for 20 is all these companies have been growing in their own right, but in 2018 you will see them start

to encroach onto each other's territory. the google versus amazon battle is brewing. the google versus facebook battle is brewing. those battles will continue to escalate. it will be a question of not if these companies will get bigger, but will there be a zero-sum type of aspect. i think that will be interesting. cory: it is curious. with the duopoly in advertising between facebook and google, you have the devices like echo and you see amazon getting into search in its own way. james: you are eliminating the incentive to search on google explicitly when you can introduce a discovery mechanism on amazon. when you look at google, the product listing ads have been the bread and butter for the company in recent years. as you shift that away, and then you look at the content side of the equation, where they -- amazon is likely going to be the biggest content spender in the industry, potentially even eclipsing netflix. what are the implications there for youtube? cory: always a pleasure, james

cakmak. there is one headline for 2017 -- fake news. bloomberg's sarah frier takes a look at the hits and what social media companies are doing to curb their spread. sarah: 2017 is the year we realized how quick and easy spreading misinformation on social media is and how profitable the spread of fake news can be. for the u.s. presidential election, fake news -- we learned it is also a tool to disrupt democracy. it reached over 150 million americans on facebook with inflammatory postings, starting conflict over issues like race and religion. this was done with 80,000 posts

boosted by $100,000 in ad spending. >> these ads are just the tip of a very large iceberg. sarah: and it resulted in google, facebook, and twitter all testifying in hours of congressional hearings about russia's tactics and how they can try to stop them. but it's not limited to the u.s. the spread of fake news became a global issue in 2017. france and germany successfully fighting the scourge in their own elections. a genocide in myanmar and an attack in the philippines on a local news organization -- just what can big tech do to rein this in? facebook hires thousands of people to sift through that content. critics worry about social media companies going too far with their censorship. twitter said they shut down thousands of accounts and they

are taking steps to get tougher on extremists while investigating further. one thing is for sure -- fake news is going to get harder to stop. facebook often argues that it is a technology company, not a media company. well, to take on fake news in 2018, it may have to be both. cory: that was bloomberg's sarah frier. coming up, our exclusive conversation with satya nadella, on the dangers of ai, the importance of windows to microsoft's future. "bloomberg technology" is live streaming on twitter. go to @technology. this is bloomberg. ♪

cory: check this out.

new york city is thinking about adding an extra fee on every single uber ride in manhattan. there are 68,000 cars affiliated with ridesharing services in new york city streets. cities like chicago, seattle, portland have implemented their own ridesharing fees to encourage public transportation. we bring you the highlights from the best interviews of 2017. emily chang sat down with satya nadella. satya: to us, one of the key things, i guess -- there is some truth to it. we will always invest in hardware to create new categories. emily: would you ever make a phone again, and under what conditions? satya: at this point, what is needed is for us to not be obsessed about categories that are well served.

not at least on current rules. what is considered a phone today will be very different in the future. is it a mobile device? yes, it is. it is untethered. it is battery-powered. you wear it on your eyes. what is the future of those kinds of devices. to me, microsoft will always be in the end to end computer experiencing business, but our goal is to invent categories and reinvent categories. emily: you talk about three big strategic bets, mixed reality, ai, and quantum computing. on the issue of ai, are you at all concerned that facebook, google, apple could outpace

microsoft on ai? satya: to me, what is microsoft's approach will be all around how do we take ai. it's not about any power trick of ours. the most important thing to us is are we democratizing so that every customer of ours can build their own ai? we better figure out a way to democratize it so that every company, whether it's a small nonprofit or a large multinational can use ai in the context of their endeavor. that's kind of what we want to do. emily: is elon musk right to be warning about the dangers of ai, whether it be military applications or otherwise?

satya: like any new technology, there are a lot of good things that come with it and we should grab hold of it, but be clear-eyed about any unintended consequences. wherever ai runs amok or we lose control, that could be dangerous. so, i think the first responsibility we have instead of thinking that's going to happen, let us enshrine a set of design principles. i think that we shouldn't abdicate our responsibility, like good user experience, there is such a thing called good ai. i'm a firm believer that what is the need of the hour is to enshrine those principles. emily: so it could take over the world, but hopefully not? satya: it's up to us. emily: what is one technology that the competition got to first that microsoft would have wished to invent? satya: i wish we had gotten to the relational database before oracle. one of the most amazing pieces

of technology, or before ibm -- i just don't worry as much about looking at the product or the technology somebody else got to it. the question is, are we able to go back to that sense of purpose that we have, what we can do with the technology, something that fits with our identity? even if somebody else gets to a quantum computer first, what are they going to do with it versus what we are going to do with it will be very different. emily: you build several of your products for several different operating systems. what's the future importance of windows to the microsoft future in general? satya: there are one billion users of windows. it continues to be a very significant part of what we do, but it's not the only part. i think that's the change for

us. we now have a much more diverse, robust business. we have xbox in gaming, which spans both pc gaming and console gaming. we have 55 million xbox live subscribers. we have the windows business. we have office 365. we have azure. microsoft, in that sense, is a much more diversified portfolio. there are linkages between them. that's how i think we are going to keep going forward. cory: that was microsoft ceo satya nadella. a valuation of $1.2 billion without revenue. how can that be possible? blockchain. a reminder of our interactive tv function. find tv . send the producers a message, even while the show is going on. they along with the charts we bring you on air. this is for bloomberg

subscribers only. this is bloomberg. ♪

cory: bitcoin's freakish surge in the last few months of the year saw a lot of companies trying to cash in on the crypto craze. it includes a hong kong startup. stock has seen massive gains, up more than 1000% for the year. i wrote about investor interest in the company for bloomberg. we will talk about this story with a bloomberg news reporter, who is up on all these things. it's really interesting to me that this isn't just about speculation on currencies and stores of value.

we have stocks and companies renaming themselves, announcing new business plans, like this one i wrote about, that used to be called j.a. energy, that was something like a plant-to-energy business, reverse merger, then it becomes a blockchain company. >> there is a juice maker who puts blockchain in its name, a sports bra maker -- cory: sports bras and blockchain? >> who would have thought blockchain could help the manufacturing process for sports bras. the thing is, none of them are doing anything and blockchain is just added to the name. it's like the late-19 90's and early-2000's when companies were adding dot-com to their name, not really doing anything with the internet, but their stocks would surge. it is deja vu all over again. cory: when i was a money manager and looking for stocks i didn't

believe in, i would look for things that were in line with the trend. a social media company that didn't have a social network, a wireless company that didn't have a wireless product. when i saw this, that it has both internet of things and blockchain in its description, and has zero revenue and over $1 billion in valuation, i thought this one is worth kicking around a little bit. julie: not even know revenues, it has $15,000 of cash on hand. they are burning through $220,000 per month. it doesn't seem like a company that was one that should be soaring in valuation. i think there is a quote in your story from a professor saying the profile of the company is scary, and that basically is the summation of what this whole thing is. cory: the professor, charles

lee, at stanford business school, has written very positively about chinese reverse mortgages. even then, he finds this one concerning. i looked back at the progeny, who was behind this deal. they only list we talked to executives, and three of the people at the company, one, a former director, two former executives -- their product was called the urine stopper. their expertise was in stopping bedwetting. julie: you managed to get bedwetting in the headline at bloomberg. cory: it's my finest achievement. i talked to one of the lawyers for the company. if these guys have expertise in bedwetting, how can they have a company based on blockchain? the bedwetting products had radioactive protons -- nothing turned out to be true. what's the connection between

bedwetting and bitcoin? they said, well, no one has experience in bitcoin. that's the greatest thing about it. julie: blockchain has been around for a while, so i might take a little bit of an argument with it at that point. if you do have experience, you would want to have that on your resume. it sounds like they weren't easy to get in contact with when you were writing this story. cory: yeah. the main phone number listed in the most recent filing didn't have the full phone number. the previous one was disconnected. it's an interesting company with a billion-dollar market cap. it's split three-to-one today. julie, thank you very much. we appreciate your time. up next, we continue the cryptocurrency conversation. the ceo of ripple is actually using blockchain to field a banking. this is bloomberg. ♪

opponent who filed his papers on sunday but the election commission banned him from standing as he has a criminal conviction. the he says this was political ly motivated. nd a device containing ploseiffs went off. no one has admitted to setting

the device. and a tip from the c.i.a. foiled to bomb the. bitcoin is a bubble in the current currency. so says the head of south career service. nd and after its biggest rally ended a route of 44% of its value.

and best year since 2004. and the best annual gain in seffven years and the most since july. and on a stronger footing when it comes to the 2017 session and it is sliding along with indian bonds given the government would make up for a revenue shortfall. and we have a communication. the stocks rose as much as 20% d and commodities and gold climbing to a four-week higher. and we do have oil seeking higher as well. and rally on the lib yap pipeline explosion. set. is

in nd copper is near that the london. keep your eye on that. and money is imagining ground. >> breaking out of bitcoin shadow. look at the last year. leading the currency of the entire year. nd we are in new york. and falking to you. i didn't have idea that would be the kind of thing it has become here. and you are so focused on having a functioning block chain and have this currency. >> there is no question.

and earlier participants. there is a lot of hype. >> you think. >> there is a lot of reality. and how do we create and cross order payments and if we could reduce the friction there and create a lot of value for consumers and banks. and i know i traveled overseas and see the massive fees from the same bank they use in their native country let alone that western union has and you are looking far beyond that. >> even within the banking community, there are a few rpgs that sit on top and and help settle the liquid for small passes, retail ap across the board, we still live in a

rld to send money to london, ap the fastest thing is fly the money to london. that's crazy. we live in the age of the internet and can't move money in real-time and the cost could be really high. >> and it seems like it should be like moving email. when you make the sale for this business, to whom do you make the sale? >> we are selling it to banks. and for customers that wan to take advantage to using s.r.p. for liquid. instead of pre-funding the trillions of dollars, they pre-fund that amount and dorm apartment cash, with digital

assets and make it more real-time to make it into another currency. and companies are spappeding with other customers. >> how much money is prefunding and how long does it sit there. >> there is $27 trillion in these barning accounts. the bilateral relationship. you could put as much money in the bank of brad. >> since this is the holiday. as much as you want? >> i appreciate that. it is a problem if we can reduce the time, the friction and the cost. and you accelerate that engine and good for companies in the united states and across africa. t can change the way the

demronal financial infrastructure -- fascinating thing. >> barpgswan to serve customers. if they captain serve a customer, they aren't go to go do it. a migrant workforce in africa that isn't making a lot of money and the cost of using the would exceed the system they have. and if we make it easier to hold assets to move the assets without costing they will ever them lots of money, they proximate cause part of the global financial economy. nd ripples is a 0-year vision, how do we move information today like email. it is bringing those those communities to participate and

benefit. to take you want into bloomberg. when we created this monitor on the bloomberg and looked low and behold is ripple and what that has done over the last queer, holy cow, look at that. that is a stunning gain particularly in the last few weeks. 23, hat price about a buck ow many s.r.p.'s does ripple own? >> 61%. we own about 61% of them. there is no doubt 2017 has been amongst other things about the year of criptoof. and it has outperformed.

o year to date, 20,000%. > that gives you a what, $75 billion of coin right now? >> huge strategic asset. for me this is all about an opportunity to participate and accelerate a vision we have had some time. there is excitement. people have realized that we have real customers and have the best performing technology and to complete a bitcoin transaction takes about $40 and the transaction costs and takes several hours in contrast xr seconds. s in 3-4

there are a lot of utilities. there isn't going to be a payment solution. and there is value there. -- and we talk about comes back to what is the ult and real customers that can take vange of that. if you are sitting on $75 billion of an asset, can you sell any of it? >> we invest in the ecosystem. in december, we produced a quarrel market report what is going on in the s.r.p. market. we want to make sure we have tight liquid between s.r. pfment and f inch a tmp. want to go into the mexican peso and other currencies.

e work with exchanges globally to make sure there is liquidity on that. we'll see you. and need for more corporate openings. ♪

rsh not just for the policies

and the i encourage other people to do it. let's talk about public policy. the only developed country in the world. the family act, senator gillibrand and congressman elawyero covers 12 weeks and and it covers all forms. that's the kind of public policy we need. washington state last month became the sixth state to offer it and i don't think they can offer it. we need strong national policy. >> and 100,000 square foot gym, no child care. should companies with the

resources offer things like child care? >> child care is complicated and a lot of places aren't going for it. so i talked to a lot of companies that have ways of dealing with it. employees are paid enough, that they can afford great child care or the child care is offered. employees have the flexibility when a child is sick and not worried about losing their jobs. and people who are employees of companies like facebook, they can provide those and we need to think about all the workers. > option b and the mess. share is great pu can it help

more? >> and if they did, i would applaud them. people who have a son or daughter, babies cry the same amount. we social eyed that and our culture needs to change. i really believe that the managers do not shy away from amowings. that doesn't mean we say have tears. but it does mean when someone has lost a child, how are you today, i'm thinking of you and what can i do? are you sure you want to be here, but you know what? you made a great point. and that is a great manager. the best managers are doing it. >> there has been ar explosion of stories of sexual uber ment the c.e.o. of

s re-signed, are you disappointed? it's abominable that it exists. people know better. that is what will get people to t do it in the future and as a leader of a company there is no toll raps for it. no one should go to work. >> part of the problem is that it is male dominated. has it bep harded to change the ratios? >> they are low for women and underrepresented minorities because it its hurting us. diverse teams. we are having some success. our committee is more than half women on the bits side ap i'm proud of that and on the tech

side, it is a struggle. eye.n 1990 blacks and his pan is are not represented. we have to per wade more women to go into computer science. we take that very seriously ap we hire people of all back grouped and we created facebook university and tried to find women that weren't in the field or starting in the field to get them earlier and we have a very computer uter and program. trying to get women to field they have peers right from the gick. if you could be in a circle of

computer science activities and seeing more women, we need to do more because we aren't seeing the numbers enough. coming up, a plan to invest $93 billion on the map to put e of the most important tk investors on the planet

congress will no longer add every tweet to its archives. the volume of tweets has doubled the character message rom 140 to 80 characters. and one huge tech deal looming. and uber shares this thursday. but did they offer enough to

offer the $48 billion. and that is one the questions. a deal in ed about the current pass challenges. >> one of the investments you made is considered to be one of the most successful investments. you invested in $20 bill i don't know and it was worth roughly $90 billion. at is a return and that is one of the most successful interviewers in the word, what was it worth? >> he had no business plan. and d little revenue employees maybe 35, 40

employees. but his eyes were very strong. very strong eyes. i could tell from the way he talked, the way he looked at me, he has the charies ma and leadership. it's the way he talked, the way he can bring young chinese people following him. >> before yahoo! was famous. yahoo!?ear of >> i took $100 million of our investment. at the time we agreed to go from 15 to 35 people. and we invest $1 mirks million at the same time

joint ced him to start venture. we put $1.2 million. $ million startup capital. > one big mistake you made overall. and almost successful. you were making internet 01. stments from 19995 to 20 and it is said that you personal lost $70 billion of net loss, the greatest loss that anyone has suffered. how did you feel losing that? my personal net worth was increasing $10 billion a week

[laughter] . >> three days i became richer than bill gates. >> did that upset him? >> before i told him -- [laughter] , so in six months after that 99% and went down to almost went bankrupt but somehow i survived. "bloomberg technology" and we are live and 2:00 out west. this it bloomberg. ♪ cannot live without it.

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