tv Bloomberg Technology Bloomberg January 12, 2018 11:00pm-12:00am EST
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♪ watching bloomberg technology. hillary clinton is blasting president trump for his comments about immigrants from haiti and africa. on twitter, she noticed today is the eighth anniversary of a devastating earthquake in haiti. she says instead of remembering the tragedy and honoring the resilient people of haiti, we are subjected to donald trump's ignorant and racist views of anyone who doesn't look like him. the u.s. ambassador to panama is stepping down, reportedly saying he can no longer follow the -- he can no longer serve the from administration. the state department conference john feeley is leaving his post but says it is for personal
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reasons. e werechurches inchil attacked today. no one was hurt. capswn attackers through with messages for the pontiff. california, crews searching through rock and rubble hoping to find more survivors from tuesday's deadly mudslides. dead.ple are confirmed 100 homes were completely destroyed and another 300 badly damaged. global news 24 hours a day powered by our 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ ♪
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emily: this is "bloomberg technology," facebook shares fall after announcing a change -- after announcing big changes to the social network. mark zuckerberg says it did increase user engagement. tackling online extremism, congress wants to hear what facebook, google and twitter are doing to fight it. all three tech titans are set to testify on the hill once again. and screen time, is of a public health crisis when it comes to children? we look at why some apple shareholders seem to think so. but to our lead, shares of first, facebook falling more than 4% on friday, turning in the worst performance since september. in a post on late mark thursday, zuckerberg said it is residing the newsfeed to them -- include more content from friends and family ms from business, print and media and any by making these changes i spent the time people spend on facebook will go down but i also expect the time you do spent on facebook will be more valuable.
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concernmade a nod to over social media. walk us through what happened, what mark zuckerberg broke and what led us to this moment. >> this is all about mark zuckerberg bringing race but back to his roots. that is reprioritizing posts from friends and family. he is trying to tweak the algorithms so the stuff you see first will convince you to share, like and write comments back and forth. maybe a friend asking for advice on a vacation, that will be prioritized over articles that consist of this passive reading and facebook's own internal researchers found that the passive consumption is not good for people's health. it makes them feel bad. he wants to make social media feel good again. this follows some quarters where they have been declining consumption on facebook amid this pr crisis of fake news, dissemination of propaganda, zuckerberg wants to redirect the
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conversation around facebook. emily: i want to bring in brian. joining us from portland, what you make of this, how big of an impact will it have on the experience of facebook and the business of facebook? >> it all remains to be seen, it is pretty clear from my analysis of the data i have that uses per was already falling. in large part, this may be responded to trends that were already occurring and to the extent that they are recognizing that there were real problems with the experience, they are responding to that, that is positive. from a perspective of the that facebooktem has made itself a critical part of, this is bad news for publishers in general, at least initially to the extent that they have been relying on facebook for distribution of their content through organic
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means. facebook will just be a less important place to go and from an advertiser perspective, it is not clear but if there is less consumption, one might visibly assume that there will be less inventory for ads. that is not entirely clear, there may be the same amount of inventory as before. emily: what do you think this has to do with facebook's concerns about user engagement versus concerns about meddling in the election and facebook putting us in our respective ideological silos and create a more divisive feelings than less. >> i think it is a combination of them both be connected. there has already been increasing engagements of facebook is responding to that. they need to get those numbers up in the long-term, they were -- they want people to feel safe and make this a place they want to continually engage in. but as brian said, that could
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mean that brands and publishers will turn to other platforms like twitter, snap coupling in. this can be very good for them but i did speak to some marketers that said their clients plan on staying on facebook. the key is to focus on actual individuals and people to send a message versus the big public brand profile pages. emily: to that point, does it appear that this is more morally or business motivated? brian: i think that it is both, i think zuckerberg is thinking about the long-term impact of every decision they make on the platform. when they are looking at the long-term health of the whole enterprise, they are not so worried about the short term. emily what are we hearing from : advertisers and people who work with ? how do they feel about this? >> in terms of the people
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hurting the most from this change, there will be smaller companies with newer upstart publishers like buzzfeed and on facebook to spread their contents and their numbers and impresses, i did speak with a start up founder that says they were most of the business through facebook engagement. as a result of this, he realizes his content will no longer be prioritized to users and he will be looking toward other means. he is already starting to switch budget to -- his ad twitter and elsewhere. as a result of this, a lot of the startups are also very frustrated. a while ago he really change his strategy. does this mean for advertisers, small and large, as they react to the whims of facebook? brian: there is a couple of ways to look at it versus agile spenders of advertising, it may not change the budgets.
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facebook probably does have a fair amount of pricing power. on the margins the only , beneficiary might be google to the extent that nobody else has like the skill of facebook. snapchat are tiny by comparison. if there is a shift to spend on paid media, it would be to the google properties if not to premium publishers directly. i think one of the things that is not fully appreciated is that anyone who is been counting on facebook for organic reach of consumers now realizes more than ever that they need to own a direct relationship to the consumer, they need to own as much data as they can about customers, investing in their own crm systems investing in , their own web experiences on their own digital properties. that was actually good if you think about it for adobe or salesforce or anyone in that space.
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emily much to look forward to : and watch for. we are also watching twitter, shares gained, more than 4% heading its highest levels in over two years. they raised their price target to $25 from $35 and said the company is in the early stages of a multiyear turnaround. he added the company may prove too valuable to remain independent, the parent company of bloomberg television produces tick-tock, a global breaking news network for twitter. coming up, less time google, facebook and twitter on capitol hill, it was all about russia, next year, they will be fighting -- they will be grilled on fighting that online extremism. that is next, this is bloomberg. ♪
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♪ alyssa: jeff bezos is jumping into the dreamer five. with a huge scholarship gift. the amazon ceo is announcing donating $33 million toward a scholarship program geared towards young immigrants brought a legally to the country as children. bezos was one of the signatories to a january 10 letter more than 100 ceos urging lawmakers to pass legislation by january 19. the date the current government funding measure expires. capitol hill is far from done with google, facebook and twitter after grilling top lawyers from the tech giant over -- from the top -- from the tech
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giants over russian interference and the u.s. it present election. lawmakers want to hear from them again and this time to examine what the platforms are doing to fight the spread of online extremist propaganda. that will be on january 17. to discuss further, we are joined by someone intimately familiar with the relationship between the government and big tech. thank you so much for joining us. what do you want to hear from this company's next week? >> what have they done to address the concerns, today we had facebook announcing that they are changing their algorithms so that we don't have people being exposed to false brand advertising. what other steps have they done, third-party verification? are they increasing investments? are they hiring more reviewers? i think they have to be transparent about what went wrong and what steps they are taking.
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emily: what has been unsatisfying about the answers they have heard so far. >> i think they were slow to a -- i think they were slow to acknowledge their mistakes. what they should have said is when you have new technology, inevitably, people use that technology, the systems were exploited, we needed to do better, these things happen when -- new technology and we will be taking corrective action. i think it took too long to get there, think there was defensiveness when they were first confronted but i think is that they have been more transparent, i think the tone has changed. i think they recognize there is a problem and they are being responsive. -- y: >> it is funny you say that because anytime i talked to some of these companies they say we will do well but it is the other companies that are messing up and i said that is not how people around the country or on capitol hill look at it, they will not have the finer points of google, facebook or apple, they view this as a tech
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challenge or a silicon valley challenge and everyone is going to be painted with a brush so i don't think it is worth getting into who is doing better, i think they all have to do better on machine learning and having more human review. emily: do think it is regulation necessary here when it comes to monitoring online content or policing how these companies monitor online content? >> i think there is room for regulation, the regulations about disclosure of political ads, there were a lot of ads we didn't know was paid for them. there may be some regulations needed about know your customers and making sure they know who was advertising and making sure they aren't monetizing advertisements that may lead to inflammatory content but a lot of it is also some role for congress and self-regulation and standards these companies need to do in updating their terms of service and their own standards and guidelines.
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emily: we are coming into elections, what are your concerns with another election season upon us and many of these changes, if they're going to be made, not yet made. >> my hope is that we won't lose the positive of social media. there were so many candidates, barack obama, bernie sanders, dissident voices that were able to use social media as a platform to get their voice out so there was a lot of good, unfortunately it was also abused by propaganda and hate speech and hate speech that was terrible toward minorities or women, how can we fix that without censoring the good parts of the social media, how can we have that balance and i think the companies over the last few months have been working toward that, they don't want to censor the platform, but they do want to remove the offensive content. emily: there has been concern about the impact of some of these platforms on children, the idea of facebook addiction, online addiction and these companies might be perpetuating that, do you think that
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criticism is fair? >> i think is is always the case, i want my son watching television, he is six months old and i try to keep him away from the phone, so anytime you have television or new technologies, you have a concern, you want kids reading and playing and having interactions but what i think is important is that these companies have algorithms that encourage engagement, it doesn't just encourage passive learning and that is what facebook has been doing with their recent steps, they have been saying their algorithms have people spending less time online but be more engaged and their stock took a drop because this may not be good for business but it may be good for society and i am glad they took these kinds of steps. emily: how would you describe the glacier between silicon valley and washington? in the last demonstration there was a much cozy relationship, someone say to cozy and there is a greater divide down but there is also a risk to that. >> i think it is complex, on the
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one hand, every person would love to have tech in their districts, and you saw this with congressman and senator would compete for amazon. they associate silicon valley with the future, prosperity, they were those jobs, they with the technology. isaiah rogers refers to his region, there is a aspirational quality to silicon valley, on the other hand, they have seen the abuse of these platforms, there is a concern that social media is perpetuating false propaganda or inflaming them and they want to make sure these platforms are not abused. as the other point out, our approval rating in congress is at 11%. we are probably the last people that should be lecturing silicon valley about their popularity. emily: thank you very much for joining us. a reminder that bloomberg lp,
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♪ posted a third-quarter profit surge. it is coming on a tax benefit and investments in digital technologies for the indian software services company but the new ceo maintain forecast for slowing sales, is the first earning announcement since they took over the job last week, he assumed the reins after a board room tassel that ushered out vishal sikka. there were hand-in-hand with much of the pc era but news of the vulnerability of the intel processors has driven a wedge between the two.
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forcing microsoft to do much of the work patching security holes. they are disagreeing over the extent of the possible disruptions to customer operations. let us bring in alex. what does this mean for microsoft? what this means is that they have a chance to continue to show their customers that they are their partners. this helps transition customers to the club, i feel be very important. the customers that learn about these vulnerabilities in january, countries like -- companies like microsoft have had this information, and done a great job but overall, but we expect is this will drive more customers to go to the cloud, not less. emily so how much does this hurt : microsoft versus intel? >> it doesn't hurt microsoft all
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that much, our conversation suggests that the company has been really good about using software workarounds to address some of the potential performance issues on their cloud business, in the scenario where that is not enough and they have to purchase more capacity, that could affect margins. but on the positive side, this performance issues could be more pronounced in older systems. you could see a pc refresh cycle. that could be a good thing for microsoft. emily: what does this mean for the relationship between microsoft and intel? >> i think microsoft and intel have had a strong relationship for a while. i don't expect this to really meaningfully impact it one way or the other, i think that over time, as the hyper scale cloud vendors like microsoft and amazon have to differentiate more in the cloud and around ai, and computing they may pursue , more aggressive paths to design their own chips and all
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-- and own that part of the infrastructure stack. i don't see this an issue to microsoft outside of what we have talked about. emily how far-reaching do think : this chip security flaw is, thinkctual impact do you customers will see? >> we think it is very far-reaching. ceosonversations with point at their view as it being a big issue. we are not seeing any overreaction on that front, we have talked to companies, they seem to be doing fine from a performance standpoint, they have been able to write workarounds and there are certain benefits around, architecture that allow them to mitigate some of these impacts. we personally believe this is going to drive more clout adoptions. if you are a cio and your waking up to this january 3 leak and you have to deal with your idea
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-- with your i.t. organization patching or making updates, are you in a better position than microsoft or amazon or google that have had the opportunity to do this for six months and as companies like oracle and microsoft continue to push customers to the cloud this is , going to be another reason why. emily what is your outlook? :big tech has been on a high, how long can this keep up, it still keeps going up with some volatility here and there but what do you think the general trend will be? >> we made microsoft the topic, last year was a real catch up in terms of the race in the clouds in terms of microsoft and amazon. we think this year there is a lot more advanced computing workloads will move to the cloud. microsoft is well -- is on the software side and enterprise, both of the
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structure side to partner with their customers and drive much larger deals at much better margins which will lead to much better cash flow so we think that is just getting started. it is a generational shift that microsoft is at the heart and soul of, so we really like it, that is the short answer. emily: are you worried about your children's smartphone screen time? some apple shareholders are. if you like bloomberg news, check us out on the radio, this is bloomberg. ♪
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♪ parenti inm alyssa washington. here is a check of your first word news. the u.n. human rights office as -- says president trump's reported use of an expletive to describe african and other countries can damage and disrupt the lives of many people, speaking in geneva today, robert said trump's comments go against the universal values the world has been striving to establish since world war ii and the holocaust. >> these are shocking and shameful comments from the president of the united states. i'm sorry but there is no other word one can use but racist. alyssa: president trump denies
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he used foul language. richard durbin was present in the oval office when trump made the comment. richard durbin: you have seen the comments in the press, i am -- i have not read one of them that is inaccurate. no surprise, the president started tweeting, denying that he used those words, it is not true, he said these hate things and he said that repeatedly. alyssa: the chairman of the congressional black caucus said the president's statement reinforces concerns that we hear everyday that the president's slogans make america great again is really code for make america white again. president trump has canceled later to london to open it will $1 billion u.s. embassy, avoiding the protest promises. british lawmakers had trouble is now open that after he retweeted
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videos from a par} group and criticized london mayor's following a terror attack last year by the president said his decision was due to concerns bassy's move from the mayfair district to a less fashionable area of london. turkey is warning its citizens about traveling to the united states in retaliation for a new u.s. travel advisory that one americans about terror threats and arbitrary tensions in turkey. turkey says the u.s. travel wanting unfairly portrayed turkey as an unsafe country. in venezuela, two days of protest and loaded over food shortages have left people dead and 16 injured. businesses sayle at least two farms were attacked by moms of people slaughtered cows and opposition lawmakers posted a video on twitter showing a dozen attacking one cattle saying -- we are hungry. the european commission president is luckily the
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coalition agreement that was formed in germany, speaking to reporters in sofia today, some -- john claude called this agreement constructive. global news 24 hours a day powered by our 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ is "bloomberg i am emily" and chang. let us turn to our top story. this is major change to the platform's new split. this may cause a huge problem for publishers relying on facebook for its large user base, bloomberg intelligence joins us now with more. how do think this will change the facebook experience? >> i think it is a good thing for facebook because over the last couple of quarters, if you see the total time spent on the platform, it has been going down. that is because more people are relying on instagram and this issue of marketing content and
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lack of family content, they this issue is great for long-term impact on revenue. we feel instagram can handle the offset that they need to continue growth. emily how do you think this will : materially change how we experience facebook? will it feel like different? >> it should feel back when facebook was first out there with respect to all your friends and family and content that way and hopefully that helps them fight the fake news issue a little bit and from a publisher standpoint, what you might see is reduced content and information on facebook and they might have to rely more on alternatives, they might look at twitter, snap, linkedin, publishers are the ones where the risk is higher but some -- from a facebook effect standpoint, i think instagram could offset this. emily: how much do think this will impact the bottom line? >> if you look at instagram, the revenue was supposed to double
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this year. so expectations are on $8 billion and that should help them offset some of this. the other thing to keep in mind is pricing. -- price book on facebook has been increasing. zuckerberg has said it is more about quality of time and not quantity of time. so ad pricing increases, we can see what type of messenger this is. they have not figured out these. if you can some of these things, it should be a slight impact. >> that you for your analysis. -- emily: thank you so much for your analysis. sticking with social media and screen time, are such things actually fostering a public health crisis for kids? that is what two apple shareholders seem to think. they say there is a wrong body of evidence that for some of the most frequent users, they may be having unintentional they the -- unintentional consequences negative but there is also a growing societal unease about
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whether some people are getting too much of a good thing when it comes to technology. at some point, that is likely to impact even apple. i would like to welcome jim, ceo of common sense media. a nonprofit that provides information and advocacy to families and technology. what do you make of the claims that the shareholders are making? >> they are correct, they are absolute correct. plain and simple. there is a huge issue today and it is a public health issue addictiveoveruse and nature of cell phones and like facebook, the previous story you were reporting on. the issue is that families, parents -- all of us know that too much cell phone use for ourselves is a problem and so they are absolute correct in calling this out. emily: what is the problem? part of the problem is we don't term where weough see the effects of smartphones.
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i know you guys do a ton of research on it, what have you seen about the actual effect on children? >> our research shows that over 50% of young people feel they are addicted to their cell phones and over 60% of parents think they are addicted. that is a big issue because it has mental health and other kinds of issues that all of us as parents and citizens care about. i think the other thing is that you can see there is an arms race for attention. your previous story about how facebook wants you to spend more time on the facebook platform. so does netflix, so does instagram or snapchat and so the issue is how much time you want your kid in front of the screen. and our technology companies intentionally built devices and software to make your addicted and that is a very big issue so i think it is very important when shareholders call out large tech companies about their responsibility because that is what this is ultimately about, it is about the tech industry, whatever the company, taking responsibility for the health and well-being of their consumers.
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emily: what should the tech industry do? they can say we make these impactannot change or how you use them. >> three things, one, they -- the tech companies should design their platforms to make them less addictive. what is the incentive for them to do that when they are running a business? >> the quality of our lives. the fact that you have a broader value than just shareholder value although in this case, shareholders are calling up companies asking them to do more. i think the second thing is you mentioned more research. a million and a half on research and that is a
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tiny fraction of what should be spent but there is almost a lot of money spent on these issues. so we should be researching the impact on brain development, mental health, etc.. the third thing is, in apple's case, this should be a publication campaign that is focused on here is how you use the device wisely and in a balanced way. so i think this is a clarion call to the tech industry, broadly, that your users do love your product, they provide a lot of benefits but there are serious consequences here as well and you need to be responsible and accountable for the downsides as well. that is a positive message, particularly about kids and families and common sense. emily: the statement from shaun parker from a few months ago -- god only knows what it is doing to our children's brains, this is talking about facebook and social media, the thought process that went into building these applications, facebook being the first of them, it was all about how we consume as much -- how do we consume as much of your time and conscious attention as possible. you wonder if you are the person that is building this business, the people that are building this business, how they can make a compromise that would actually
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be worse for the business. >> here is the thing -- all good businesses balance public interest with their bottom-line profits. mark zuckerberg just talked about his two young children and how important it was that he build a society that was good for them. if you're talking about software for your children, that is a day of reckoning, whether it is sean -- these are issues that the tech industry needs -- need to face. at common sense media, we are happy to work with companies like apple or facebook or google to change the way that they both design their products but also urge their users to use them in moderation with balance, at the end of the day, you are a mom. we want our kids to grow up taking advantage of the
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technology but also not being who are addicted to and controlled by technology platforms and there is a balance in the middle which is where we should be heading as a society and with the tech industry, having the responsibility to help us go. emily i also have a question : about youtube and youtube kids specifically, there was a very well done medium article about some of these videos being suspect, some of them seeming to have no point like that is that surprised children by opening eggs or incredibly long compilations of cap a pig -- peppa pig. think youtube should
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be doing about these? >> that is a great question and since the story came out with susan who runs youtube and the other people who run that platform, youtube is the biggest pain point they have because of the fact that kids run into many unsuspected surprises on you to, including the youtube kids platform. what they are doing is devoted a lot more human resources, and in hiring a lot of people to combat -- to comb the platform to make sure that there aren't inappropriate surprises, here is the deal, in a world where all -- where algorithms rule the world as opposed to human beings and values, you run into a problem, i think this is the beginning of a much larger societal discussion. whether it is facebook, google about -- or any tech company -- what is the balance between the best, coolest, passive technology and profits with what is in the best interest of humanity. that is a very important conversation for all of us to have. and we all need a little common sense when it comes to finding the right balance in that. emily: common sense media ceo and founder, taking so much for joining us, jim.
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expansion. this did not reflect the protection efforts and cause the u.s. process deeply flawed televised, and politicized. the boston-based hybrid cultural tech firm, indigo, is dedicated to helping them sustain the planet. the company works to apply natural approaches and grow healthy food. indigo raised $47 million in a after another together $156 million. to push the company to a unit or status in late september. so how will the indigo use these funds? joining us now from boston, david perry, thanks a lot for joining us, how will you use these funds? >> during the business broadly, a lot of votes will be increased r&d spending. the core of the company is microbiology and applying that to agriculture and a lot of our investment goes into r&d
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spending. emily talk to us about how the : technology works. >> sure, microbes evolved with plants over hundreds of doing to beers to help those plans by our stress and that could be helping them feel that it would lack of water or it could be helping them resist attacks from insects or disease. modern agricultural practices have decimated a lot of those beneficial microbes. through the application of pesticides. it discovers those microbes that were originally evolved to help plants. we add them back to plants so plants yield more and need your -- and need fewer chemical fertilizers. emily what is next? : what is the hope? >> the hope is that we are able to grow agricultural crops, improve yields in order to be able to feed our growing population and do so in a way that is more environmentally sustainable.
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so we use less of our freshwater supply, we have less nitrogen runoff in that one supply and we -- in that water supply and we create fewer greenhouse gases through the application of chemicals. emily explain how all of this : factors is your business model. >> we use these microbes to coat the seeds and most of these modern agricultural crops, this is going into the ground. these go and get taken up by the plants, they multiply when the plant and produces a positive impact on the plan -- plant. we shall both treated seeds which improve the plant performance and we contract with farmers to grow more sustainable crops at a premium for the farmer so the varnish for money and we are empty cell is to
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people who are interested in more sustainable sources of food and fiber. emily: how many crops do you plan to offer? >> the five largest crops in the world are corn, wheat, soy, cotton and rice and that is the five we started on, we believe this technology will work on major agricultural crop and we expect to expand over time. emily: indigo's ceo, david. thank you very much for joining , us. coming up, we wrap the biggest trends in las vegas, what you may have missed, next, this is bloomberg. ♪
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emily: votto's fund is said to be investing in financial tech startups, the private investment firm is backing acorns grow, the stock investing cap that is for clients that have less than $500 on average to invest in eps and managed copies like vanguard and black rob. ashton kushner and kevin durant are also acorn backers. introducing new gadgets from , glasses, and vehicles. they attended the event, what you see?
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>> the blackout. that was the talk of the town but in all seriousness, it was basically, the reemergence of virtual reality. ins andlooking at the outs. in the same time, in the back room deals, we have apple, snapchat, other chinese makers, lenovo, samsung, lg, google, any company you can name, amazon, they're all working on ar -- on vr headsets but those are years away, that was the backdoor talking. emily which trends are products : do think are the most promising? >> augmented reality, everyone you talk to who understands technology and where the industry is going recognizes that vr will be a niche player, a very successful niche player until augmented reality comes down the road and becomes a successful technology on its own. a few years from now.
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stuff seeing very early the underpinnings of what is to , come down the road. emily: what is coming down the road? it is a big, open question, how ar change our lives and how we experience the world. >> the dream of these companies, amazon, apple, google, classes that are as lightweight as what you would wherefore reading or anything else, it has cameras on the front. i can look at you, get information about you, your wikipedia page and then i get a text message, or a phone call, i styley much google glass but cheaper, lighter and more effective. emily: what about when it comes to connected ones? i know that is a big scene, what you see on the horizon in 2018? >> as it has been, this was the car electronics show, there were
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a lot of booths related to cars, toyota announced that they partnered with alexa to have a alexaard populated by functionality. is googleat we have assisted functionality and perhaps apple corp. optionality in other carmakers vehicles, apple has car play, that we have alexa and android auto, this will be hundreds of different cars, you have android facing -- interfacing with your car, you have more of this technology so think i've for the third or fourth year in a row, it will be the connected car strategy. emily what is to come in 2018? gurman looking most forward to? >> it will be interesting to see what apple does in the. they pioneered this back in 2014 but i think they have since blown that lead to both amazon and google, who had this home pod delay.
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when the home pod comes out, we will see if the conversation shifts back to apple and apple is back on top. i'm really excited to see and we will find out what they have up their sleeves because they have to be doing something in the connected home market. emily thank you so much for that : roundup and your great covers this week and surviving the blackout, thank you, i know it was not painless. that does it for this edition of "bloomberg technology." we are live streaming twitter, check us out on technology, i've -- have a wonderful weekend everybody. this is bloomberg. ♪
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