tv Bloomberg Technology Bloomberg March 7, 2019 11:00pm-12:00am EST
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♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up the next hour, the facebook's new mission. the social network is about to get a lot less social. what is the motivation behind the move? plus, follow the money. spending a record amount of cash to get the zte agenda on track. and recharge, tesla making moves for its model three rollout by
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revamping the charger network. the infrastructure in place to take demand for the next level. first, no surprise mark zuckerberg is finding ways for the social network to change after the company was besieged by scandals and bad press. what is surprising, he wants facebook to go from more open and public too much more private. he says facebook will emphasize communication among smaller andps, temporary posts, technology that keeps outsiders and facebook itself. fromsk from peering in -- peering in two whatsapp and facebook messenger. now.greenfield joins us thompson, whonick had an extensive q&a with mark zuckerberg right after he published the piece. uckerberg on facebook's
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future and what scares him most." sarah, walk us through the reaction to this stunning post from mark zuckerberg. sarah: some critics are calling it a victory after all this criticism that zuckerberg has faced over privacy. now he says it's really important. but the difference is really going to be in what we see facebook do with this. it doesn't change the fact their advertising business is built on personal user data. not a lot changes about how facebook's business works. he didn't talk about the advertising implications in his post the other day. you've been very bullish on facebook. he says the newsfeed will remain, but this will make ad targeting harder. does that concern you? rich: it's honestly absurd. what is facebook right now?
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you spend a lot of time browsing for newsfeeds, in groups. the one thing you don't do a lot of, especially in this country, you don't spend a lot of time messaging. i'm sure sarah or emily, if you go to message someone, you are generally using i message, maybe snapchat. you're not really using facebook messenger. somebody is using whatsapp overseas. but facebook messenger is not the principal form in which you communicate, nor is direct messaging and instagram. i think it's a rapidly growing part of facebook, but for mark zuckerberg and facebook, this is trying to reclaim messaging. they want to dominate messaging and combine it with what they already do with instagram stories, facebook stories, whatsapp stories. they want to capture more of your daily time spent, and the one big pace -- place they are missing is messaging. that's the next place to not
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only advertise, but in the commerce business. what they are taking seriously is how to close the loop between content and marketing and commerce. that's the holy grail, moving cars off lots and products off shelves. that's what this is about. nick, mark -- zuckerberg told you he wants private messaging. you astutely pointed out this raises a lot of questions. did he answer those questions when you spoke with him? nick: he answered some of the questions. he answered my central question. the post was unclear about whether he's building a new network or just going to evolve the tool facebook has. he was clear about that, which facebook tools will exist and involved in instruction, and he will also build something else. if people do move more towards
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messaging and if they do move off newsfeeds, especially to encrypted messaging, you monetize that. yes, it will probably be a payments processing. there will be a facebook going they will try to monetize. the most interesting question, how does a company that has -- $500nto $500 million billion, how do they make money in this new era? emily: the thinking is there needs to be two platforms, a more public platform, a digital town square where you interact with people, and another is a private space, the digital equivalent to the living room. you tried to press him on this. how do these two work together? one of the questions that you had, sarah, about the actual execution your. s -- here. sarah: the biggest question we have going into the living room
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type space, especially in encrypted type messaging, whether facebook will please that content. the answer is really they won't. we've seen with whatsapp, and encrypted messaging platform, and has contributed greatly to the spread of misinformation and a legal kind of content and countries where it's popular. facebook hasn't been able to do anything about it because they can't see it and they can't share information with governments. in some ways, in this new market facebook is trying to go into, they're washing their hands of that debate over what kind of content that should have oversight over. emily: given you said this sounds like snap, are you as bullish on facebook when it comes to revenue and engagement? is, if think the reality you think about the concept behind snapchat, remember going for a walk on the venice boardwalk with evan spiegel and
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he said think about it this way. you can communicate all the time just the way your sister or you, when you were younger, you would talk on the phone endlessly, not texting them. you would talk endlessly on the phone. in between, you would watch linear television. that was the goal of the left and right side of snapchat going back to the early days. messaging and content can live together. if you look at facebook and instagram, they principally have been content consumption platforms for news and information. video is growing quickly. look at instagram. it's going to be a bigger business than facebook. people are spending more and more time on instagram. yes, that's coming through stories, which isn't as monetize of all is the core newsfeed, but this is all about capturing more of your time. there's lots of ad dollars to grow on instagram for years to come. we are more bullish than we have been. a lot of the fear stoked by the
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media, broadly by the media and regulators that facebook is dying or end of facebook, look around you. people are using it more than ever in aggregate. my 15-year-old daughter is using facebook groups. i never would have assumed you have teenagers moving -- using facebook groups because they are interesting. you have tons of people at all ages. this is just the beginning for facebook and instagram. there's a lot of great growth for head -- ahead. while there's lots of things to tackle, which i think are not easy challenges, the reality is facebook has more resources than anyone else, other than probably google. emily: as a fellow proverbial member of the media, why do you think mark zuckerberg is doing this? interestingly, he told you he's not worried about the business. he's worried about safety and security because there will -- it will be less is a for them to track whether bad behavior is happening. cliche,'s not to be
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facebook doing this for the right reasons? is this just to avoid government scrutiny, to appease the stc? is it because of the media? incrediblyn, it's an interesting question and a hard one to answer. there are a couple of reasons facebook is doing this. number one, he does say this is what people are doing. he's got dashboards of how people are using their phones, how people are using facebook. he sees the trend people are going. number two, he's older now. when he started facebook he was very young. he didn't care about i was a. he's -- care about privacy. he's now mid 40's. there is a benefit with regulators. you look at the fundamental threat to facebook, it's antitrust regulation. many people pushing have proposed a solution where they are split apart.
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if you imagine them being integrated, suddenly the argument from the antitrust side becomes harder. i do think it involves public perception and employee perception. there's a sense facebook has been on the wrong side of history the last year. facebook cares about it. they don't want their engineers to leave. pivoting to privacy encryption that most people, particularly in the engineering community, think are the right way to go, is a boost to morale. it's a combination of personal motive, cynical government regulation motive, management motive, and financial motive. emily: so he did talk to you about the difficulty of getting the right leadership in place in facebook, and leaders who agreed these are the right priorities. it will be interesting to see how they manage this transition. nick thompson, thank you for stopping by. along with rich greenfield and
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emily: equifax and marriott were targets of two data breaches. sensitive data of 145 million people were stolen from equifax, including social security numbers, credit card details and more. marriott had 383 million guests reached, including passport numbers. permanent senate subcommittee on investigations questioned their ceo's and they were not happy. take a listen to senator tom
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carper of the ranking democrats. >> when actors are able to obtain personal information, the consequences are real. will we see year in and year out is assigned we could and should be doing a lot better. emily: to discuss, i want to bring in the vice president of research at the cybersecurity of jericho. before that, he was an engineer with the nsa. we've got bloomberg law and privacy data security reporter sarah merkin's here. i'll start with you. what was revelatory about these hearings? sarah: this was the first time that io testified. the lawmakers really were not happy about the steps the company step. hard about went what cybersecurity protocols they had in place and wanted to know what steps they took afterwards to notify consumers about what was revealed. emily: interestingly, the equifax ceo says they still
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don't know who stole the data. take a listen to a quote from him today. >> our analysis is that there is no evidence the data has been sold or no evidence of increased identity theft as a result of equifax data that was stolen in 2017. sara: even if there's no evidence the data was sold, what is the likelihood the data was taken and will be used? >> pretty unlikely. usually when we see a big data dump like that, you know it's being monetized and so. when you don't see it appear, there's a likelihood it's a nationstate actor and they are using it and a more targeted fashion. they're not looking to sell for a dollar or two dollars apiece, but more strategic way. emily: he's saying they still don't know who to get. is that unusual, now 18 months on from this breach? chris: it's a difficult task.
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if you look at the report, especially the senate came out with today that deals with the investigation in quite depth, they talk about how the server that was breached, they saw chinese traffic coming from it once they were able to monitor that traffic, and they were looking at what was happening. they don't have any operations there. it was weird there was so much traffic from china. that was one form of attribution that seems possible. emily: what does that mean? chris: what it means is either someone is bouncing through china or china state actors themselves, which may be using that information or thinking about using it, how are they going to target individuals, perhaps high-value individuals, with some of that information, whether social security numbers or personal information? anytime you have information otherwise difficult to come by, you can use it effectively in a social engineering attack, a phishing attack, weathers the
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nature of trust you try to establish with that person by virtue of knowing information about them. you can envisage this working in targeted attacks, phishing attacks and someone. emily: how does that differ from what we know about marriott? sara: with marriott, they acquired a system a few years ago. there is was different because they acquired a system that has already been breached since 2014. there's included passport information, some encrypted, some not encrypted. they are still looking to see how the data is being used, if at all. emily: do they know who stole it? sara: as far as i know, they do not. emily: chris, senator tom carper hit these companies very hard. he said the leadership running the company today when this happened, it wouldn't have happened. is this a leadership issue?
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chris: there certainly were a number of process and leadership in cultural gaps in equifax reach when you just look at the number of lapses that happened. nothing is one person's mistake. it's a cascading failure of multiple processes and things that happened. the number one role in security is if you don't know something is there, you can't secure it. they had very little visibility into their assets. they have little visibility and you have a software was built. these open-source components, where they were being used. if you don't know that, you can't secure those systems. clearly there's an increased focused on that today. new leadership is putting an emphasis on that. you realize that issue is something they need to focus on. emily: lots of open questions. thank you both. coming up, amazon growing its presence in washington with a record of amounts of lobbying
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supermarkets with the growing threat of online grocers. the cfo spoke to bloomberg about one of the issues on investors minds, and that is the rising threats from amazon. >> i have over 2700 food stores today, about 11 million customers a day on average coming to one of our properties. they live within a couple miles from our stores. we've been building out the digital platform. we feel we have the infrastructure with our brick-and-mortar to serve our customers conveniently. emily: speaking of amazon, they are stepping up their game in washington. federal records show amazon lobbied more government entities than any other tech company last year. in 2018, they spent $14.2 million on lobbying, outspending everybody except google. increase the past six years, as jeff bezos continues to clash with president trump. joining us to discuss, naomi next.
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talk to us about the trends you are seeing, as opposed to other tech companies. so amazon has been increasing its lobby spending, a lot in the last year. what we are seeing now these days, now that it has an established washington presence, is getting more aggressive and how it interacts with competitors. you are seeing amazon but heads with retailers over gsa proposed deal to sell office supplies to federal agencies. you're seeing amazon interact in the procurement and cloud space as it but heads with other companies on a cloud deal. in addition, we are seeing amazon higher more key people -- hire more key people to help it as it navigate antitrust inquiries and questions from lawmakers about the lack of diversity in its workforce.
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what we see now is a more aggressive amazon in washington. emily: why is amazon doing this? is it about the cloud contract? the pentagonnly cloud deal is part of it. expands into other markets and widens the scope of its business, it's getting more competitors. if it gets into the grocery store space and increases in that area, it's going to get more pushback from existing businesses in that market and washington, as well. facing inition it's the marketplace is translating to competition in washington. emily: how is amazon throwing its weight around? and what is the impact that is having? naomi: one really good example is in the trade group space. amazon was part of a trade group that was called iti, sort of a
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procurement division. essentially, amazon muscled its advocatingt group of against it and amazon pushed back, and that group eventually disbanded. in the meantime, amazon created an entirely new trade group to support its interests. that's just one example of how amazon is getting aggressive against its competitors while also supporting its own interest. emily: how is jeff bezos operating in washington aside from owning the washington post? post, in addition to the jeff bezos is building a mansion here in washington. you're really seeing him increasingly interacting with washington's elite. he's going to more exclusive parties, showing up at events. most recently he was at a club where he was one of the stars of the show. he did a whole skit and jokes about how he might by the
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national enquirer and alluding to some of his more public issues there. jeff bezos is no stranger to the nation's capital. and with the hq to coming to northern virginia, that will make amazon no stranger to an increasingly larger group of policymakers here. emily: interesting color there, naomi nix. thank you so much for that update. coming up, the topic of misinformation continues to spiral around twitter as a number of elections across asia take place. our conversation with twitters asia chief is next. later, store closings. the request to hold the ceo in contempt of court failed. tesla's rough start to 2019 continues. we will discuss. this is bloomberg. ♪
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emily: this is uber technology come over week -- bloomberg technology, -- this is bloomberg technology global link, where we join bloomberg australia with shery ahn. shery: the biggest acquisition yet. airbnb continues to increase hotel listings on the site before its public offering. airbnb did not disclose the terms of the deal, but hotel $463ht was valued at million in a venture capital deal two years ago.
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softbank launched a $5 billion fund focused on latin america and named marcella for eight to run it. they are committing $2 billion to the fund and will serve as the general partner. ceo of softbank latin america and continue his other roles, including -- and executive chairman of sprint. shares dropped during thursday after the company provided five your guidance that included a slowdown from revenue growth. it comes on the back of shares soaring near an all-time high as investors show faith in the company's efforts to woo more to the site, known for handmade crafts. those are the top tech stories we're watching. canada is taking to social media to pitch slogans
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ahead of campaign rallies. twitters asia chief tells juliette saly how it's looking to restrict fake news being spread across the platform. >> it is an interesting time for us this year. elections are important moments. we promise to be able to show every side of the story and what better way to do that when debates are happening in elections and so on and so forth? i'll give you an example, in markets like india and australia, we're bringing some larding from what we have -- learning from what we have done in the u.s. to be able to bring the level of transparency around whose advertising, what's being promoted on the platform, etc. while we continue to focus on our big pillar of strategy, which is health and being able to, you know, be able to enable people to have a free and open maliciouson with less
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arguments and other things. juliette: what is twitter doing to step up these concerns, in particular, privacy concerns as well? maya: privacy is incredibly important to us and has always been. if you ever heard jack dorsey talk about this, it's very close to our heart. when it comes to fake accounts and other things, hour effort has been on the pillar of health and improving healthy conversations on the platform. and between efforts on product, on policy, we've come, we've made tremendous steps. we've seen we're able to up the number of issues that we're catching in time by three times from last year to this year. there's a ton of effort being put across the policy, both human and ai driven, and we're seeing that we're making great
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strides. juliette:'s ai the front runner in terms of moving forward with trying to crack down on fake accounts and streamlining content? maya: we do believe for us to be in a position of healthy conversations on the platform, we need both manual privacy and ai effort. certainly, ai helps that effort scale. to the same extent, our efforts in video on the platform have our advertisers be able to get to healthy and brand safe advertising conversations. we use this approach across both sides. juliette: in terms of the headwinds we are seeing with global growth, how is twitter positioned to grow in a pack? maya: asia continues to be an engine of growth for us. we've had incredible success and momentum coming off earnings over the last quarter. we see our audience continue to grow in asia very helpfully.
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we have exciting -- healthily. we have exciting markets, as well as korea being exciting. and our revenue momentum continues to be strong. we see increasing demand for video and premium video, so our partnerships in the video space continue to thrive. juliette: is video the strongest contributor to revenue? been, over it has the last year, greater than 50% or more of our revenue. so clearly, that's where audiences are putting their time and their eyeballs. and it's also where advertisers are really driving engagement. particularly, we see strength in the areas in the times where marketeers want to launch new services. twitter, the platform, and twitter video, particularly, is exciting for them. juliette: in terms of how twitter has involved -- evolved
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from 140 characters tor less to push with the message is, and also video, how do you see twitter positioned to grow in the coming years? maya: we believe we are positioned in a great way to be the conversation of the internet. the conversations could be text or video or images. but essentially, enabling a connection in the world around topics that matter so people can come to twitter and see what's happening at any point, continues to be our strength and our value proposition. to that extent in asia, we're seeing partnerships in the video space with channel seven and networks in australia. my kitchen rules, an interesting programming. strength with sport across the board. we think it's going to be an exciting year ahead. juliette: in terms of growth,
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you mentioned a couple of countries earlier. i know the philippines is a huge one. you also mentioned korea. it's millennials, really, but what is driving them to the platform? maya: it is millennials. we see the trend play out. --k-pop is a you unifying trend across southeast asia, and we see bands really drive amazing engagement with these millennial tumors. but -- consumers. the southeast asia, we generally see as an area of growth. we see philippines engaging with tv content in interesting ways. you see tv trends becoming trends on twitter within the region, as well as globally. and k-pop seems to drive engagement and many markets, including thailand, which is an exciting growth market. emily: that was twitters
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asia-pacific vp. i want to bring in selina wang, who covers twitter for us. how big is asia-pacific for twitter? selina: international revenue in general has been big. if you look at the active user base, while it's been flat or negative in the united states, it's been pretty good growth internationally. and japan is twitter's second-largest market. and growth has been bolstering some of the declines in the u.s. the past several years, just in the fourth quarter, revenue grew 30%, outpacing domestically. they are all very important markets for twitter, and increasingly so. emily: we saw during that interview with juliette saly this question of how they will ofable to stop the spread faking news. have we seen them take measures to increase security and prevent
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that kind of thing from happening? announcer: there was an interesting disclosure from twitter that, compared to the 2016 presidential election, there was less interference from foreign actors. twitter did still find activity from iran, venezuela, and russia during the midterms. , they are getting -- what that says, they are getting better at fake accounts, but they still have a long way to go. as the vp mentioned in her interview, they are making stricter enforcement policies. they are combining human review checkers, as well as algorithms, to surface the most pressing and abusive content. and using those stricter policies to enforce that i get rid of the manipulation. this service is getting rid of spam accounts, malicious accounts, every week.
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emily: bloomberg learned the pentagon is reviewing elon musk's security clearance after learning he smoked marijuana on a podcast. he went on a joe rogan podcast and the moment quickly went viral. protocol requires a federal employee or contractor to knowledge any drug use for up to seven years prior to their clearance request. show, hewent on the has went on just, including one
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valued at $300 million. he refiled his security paperwork since he went on the show according to sources familiar with the matter. sticking with musk, a blog that follows tesla sales reports they are slowing down. they estimate the company sold around 5750 model threes in february, and about 6500 in january, a big job off from the record -- drop off from the record in december. dan, does this concern you? dan: this is not new news in terms of the direction. we knew the text of the roelofs in the u.s. demands wean. right now, it's really about europe. there are delivery issues we saw at first, but there's been a significant ram positive in europe that we should continue through march.
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this is a speed bump rather than start of a negative trend, especially with europe and china rolling on. emily: elon musk has pushed back on inside easy's numbers.last year , he said your numbers are wrong. tesla makes cars overseas, east coast. how correct do you believe this blog's estimate of the sales are? dan: we continue to believe that so far it's tracking and they spoke to investors, it's tracking slightly below expectations, but nonetheless, most investors are looking at 1q is really the trough quarter as a tradition -- transition into europe and china. production obviously has been steady. having demand will ramp up in
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march. europe is the key to 1q. so far, it's been pretty smooth, especially the last few weeks. obviously the stoxx had a lot of gut punches we've seen the last few weeks. emily: meantime, tesla is updating their charger networks. the goal to have wait times, to cut wait times in half. you have easy rollouts with their own infrastructures. what impacts will doubling down on the supercharger network have? dan: that's really, if you have the barriers to entry, it has been the supercharged network. that is something they do need to double down on, especially with competition increasing, not just in the u.s. but in europe. it speaks to 2019 as a major transitional year for tesla. not just as they invest in
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supercharger, but if you look at the bill down in shanghai, taking on debt there, the rollout in europe, especially the u.s., all about the midrange and 35 k. as you see the ev tax credit hurt the man on the high-end. it was expected, but no doubt this is a white knuckle period for investors in tesla and you see it in flight test reflect in stock. -- reflect in stock. emily: what is your read on this toutedeven after tesla its retail strategy? dan: it came down to, for $35,000 vehicle, there were going to do this where it would be neutral at first and ultimately something toward target margins, they needed to ultimately do something like ripped the band-aid off. online.ales are they have to think about the
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models coming out from the test drives and making sure there's no speed bumps there is consumers get the look and feel of the new models. but this is something where it's a risky move in the near term, but the right medicine for the long-term. from a margin perspective, but as well as the strategy, this is something where the knee-jerk reaction has been negative, but we believe this is the right move for the long-term for musk and tesla. emily: what is your outlook on tesla for this year, given the easy tax credit issued, given the other story emerging out of china, that there are model threes delayed and customs in the middle of a trade war and over the cfo of huawei, who is potentially being extradited to the united states? dan: just a few things for investors to be worried about. we continue to view this as 1q is going to be the quarter were you saw a trough in terms of sales for model three.
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transitional period, especially in europe. when you look at the ev tax credit, as they navigate out of this period, profits are building. it's a self funding model, only a 30-35% chance they have to raise $2 billion of capital. if they navigate through this, they will be a healthier company. that's why we view this as a name we're bullish on even though it's a handholding period. alwaysdan ives, good to have you with us. competition spacex to commercialize space flight is heating up. the industry space isn't so no. we look at private spaceflights next. this is bloomberg. ♪
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the social media tip-off wednesday after president trump flubbed at his name at the white house, referring to him as tim apple. cook joined in on the joke, changing his last name to the apple logo on twitter. love that one. jeff bezos, elon musk, and jeff branson are making their names known in the space race. while it's typically associated with nasa, this isn't the first time entrepreneurs have taken on the final frontier. here's a brief history of private spaceflight. >> the time has come when the human race will get to the moon with rockets. >> private companies won't want to do this. how will they make money? charging for the rights. >> crazy billionaires continue with each other. >> modern-day rocket men want to send you to mars. >> this looks dangerous. good chance you will die. >> the private industry space race is on.
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♪ >> we tend to think that's place exploration and -- that space exploration and spaceflight is about government agencies like nasa. it wasn't always like that. some of the first steps by the early pioneers were funded by the private sector. >> in the u.s., it begins with the university of park reverse of robert hard. -- professor robert goddard. you mentioned rockets can be used to carry payloads to the moon. >> they called him the moon men and last. the writer implied the husband didn't know high school physics. >> he did not let such things deter him. >> in 1926, he launches the first liquid fueled rocket. money from the family of guggenheim wallowed. -- followed. >>. they provided him funding
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today's dollars,. tens of millions of dollars at the start of this period, there was a great amount of enthusiasm. >> the german war machine gets underway. >> the second world war gives rockets a home meaning. -- whole new meaning. >> the knowledge became critical to cold war and in the 1950's and 1960's, almost exclusively governmental affair. the private sector was working as contractors to the u.s. government. >> it's not until 1982 serious effort is made to build a privately funded rocket. the idea comes from a texas businessman. it is repurposed. this may not have the majesty of an apollo or the thunder of a shovel, but it flew, and that's
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what counts. >> everything speeds up at the turn of the millennium. hopes,n't hold out great but if i can do anything, i would like to help explore space. >> a few months later, he sets up flu origin. it on musk starts spacex, and another millionaire promises to foot the bill. this is a $10 million award for reaching the holy grail, a reasonable man to space vehicle. -- in 2004,he went he wins the prize. richard branson buys the rights, turns it into virgin galactic, and starts accepting commercial reservations for future suborbital flights. >> although we are seeing a lot of billionaires have interest in spaceflights, their investments
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pale in comparison to government investments. they have now managed to partner with u.s. government agencies. nasa is spacex's primary customer. >> but there are setbacks. >> local companies missions for massive -- nasa explodes. >> deadly crash involving virgin galactic's two. >> as you can see there, it exploded. in 2015, blue origin's new shepherd market -- rocket becomes the first to take off and land successfully. shortly after, spacex goes further, spending alpha nine to orbit altitude. >> the other major milestone will be the first tourists on suborbital vehicles. i'm not going to predict who's going to be there first. but the hope is by having more competition among companies and
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by leveraging advanced technologies, we will reduce the possibilities of going to space. >> 2019 is the your spacex and boeing are finally gearing up to take astronauts to the space station. the first private lunar lander is on its way to the moon and chinese companies are joining the space race, as well. peopleover 400 years, have been dreaming and thinking and planning for future for humanity beyond this planet. and that includes a future for humanity on the surface of the moon, the future for humanity on mars, and even for other stuff. and as long as we have social goal of continuing to expand our knowledge of the cosmos, then the ambitions and dreams of individuals are an important part of realizing those goals. emily: and that does it for this edition of bloomberg technology. on friday's show, we've got a
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all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome.
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