good morning. it is 8:00 a.m. at facebook headquarters in menlo park, 11:00 a.m. on wall street. "squawk alley" is live. good monday morning. jon fortt is out. kayla tausche and myself for the

hour. also joining us, former apple evangelist, guy kawasaki. the headline on barrons, are unicorns killing the ipo market. 31 companies have gone public so far this year compared to 69 at this point last year. 115 in 2014. the article speculates that rising regulation along with an excessive amount of vc money as culprits for the slow-down. mike, as a barron's alum, what do you think they are trying to tell us? >> i think they are trying to weigh in on what this means for the markets and just what kind of market environment we're in. not so much about that kind of corporate strategic decision by a private company whether we should come public or not, but as this piece points out, typically when you have had one of these droughts in ipos it's been good for forward market returns because it means the market is not very frothy, not

looking for the next hot thing. i'm sure you can go to an opposite extreme and say it's kind of an unhealthy market if nobody feels as if it's worth going public. >> it's not necessarily a bad market for venture capitalists which is something that the article actually tries to point out, but we are seeing vcs raise a record amount of money. they are putting small pieces of these funds to work in small-ish companies and just because they haven't been able to liquidate something, should we really feel bad for them at this point? >> of all the sectors of people in the world, they are the least you should feel sorry for. they are only behind investment bankers in that spectrum. >> we got one of those right here, too. >> okay. >> so we don't feel sorry for the vcs because they are raising record amounts of money, they are spending record amounts of

money and they are still raising new funds. what do you think the culprit of this issue is and how do you think this plays out over the next few years? >> i think it's a function of the fact that private financing money has changed. venture capital used to finance high beta companies at relatively early stages. now there's money available at the growth and later stages so that companies can stay private and what it's meant has been a democraticization, the public can't participate in the upside but also the risk. that may reflect the fact that many public investors have to go to indices instead of individual stocks. >> do you believe there's the appetite to participate in that kind of risk, that kind of growth? >> i don't know. apparently not. last year's ipos average are down 2% so it may be a double-sided scenario here where there's little supply and also little demand. >> guy, i wonder, is there a

sense out there that at least among some companies that the window has closed or the opportunity, the optimal opportunity to go public has passed and now it's a matter of trying to figure out a way without that exit? >> arguably, there's always the cycle happening. but i think we have to step back a little bit further and understand that the purpose of a company is not to go public. the purpose of a company is to create a great product or service or to create a customer, so going public should be a natural outcome of success but it is not the definition of success. >> is it going to be harder for some of these companies to hire and retain people, though, because a lot of times this wealth or even just general compensation is tied up in relatively illiquid stock. without that, a lot of employees could get restless. >> sure. on the other hand, you would have to say if you're competing against google or apple for recruiting or facebook, those companies are mature, you're not

going to have the wild upside that you had when you got into those companies in the early public period. so it's more about i think career opportunity where you want to work and the kind of intellectual challenge that the company provides. it's not about just doing a spreadsheet to see which company will i make the most money at. i think it's all about the opportunity and all about the kind of project you'll be on. >> next up, mark zuckerberg has been hacked. his twitter, instagram and pinterest page have been hacked. zuckerberg hasn't actually tweeted since january of 2012. what does this say to you that this can happen to just about anyone? >> yeah, look, it's a great equalizer, the digital realm. in the physical world, mark zuckerberg and other billionaires have far greater security than the rest of us normal people. in digital it's exactly the

same. >> he pays millions of dollars to security detail in the real world. do high profile people need something like that on the internet, too? >> well, i have to say that my password is more complex than his password. but as soon as i get off this, i'm going to go change my linkedin password. it's kind of funny that someone would have this kind of password today. at least it wasn't like 1234 love or something. >> yes. although a lot of people on social are making fun of this one. although it wasn't the simplicity of the password that enabled them seemingly to get at his information. just it was in a data base that was leaked somewhere. i almost wonder if the news of this scale of leak kind of makes people inured to the idea that it's a threat. it's just kind of a funny thing, look at that, even he gets caught up in this and nothing really bad happens out of it. at least this time. >> first time we have heard the word pinterest in awhile, though. >> that's true.

>> it has me thinking about if i'm using one password for everywhere because let's face it, you can't come up with 300 passwords, one is hacked, you are basically vulnerable everywhere else. >> definitely crossing the moat. we are getting breaking news on markets. steve liesman has news. >> st. louis fed president saying in an interview that he thinks fair assessment, thinks june is not the time to raise rates. he says keep an open mind on july but says the chance of a rate hike now, if you do a fair assessment, is now much lower. he says it's possible the fed may still raise in july and he wants the fed to stop talking, by the way, about how many rate hikes could happen this year. this comes after lockhart said he did not support a rate hike and patience is the way to go. loretta mester over the weekend saying she thinks it may be

still appropriate to raise rates. >> thank you very much for that. high profile departure in nest. cofounder tony fidell is out two years after selling his company to google for $3 billion. josh lipton has been watching that story all weekend in san francisco. hey, josh. >> reporter: well, tony fidell didn't give a specific reason why he's leaving nest, only saying that this transition has been in progress since late last year, but it is a surprising turn. he is a celebrated silicon valley veteran, credited with helping to develop apple's ipod. he cofounded nest six years ago to sell smart home products such as thermostats that adapt to user preferences. today, the company says that fans in more than 190 countries use nest products and that sales have jumped more than 50% year over year. re/code says that nest raked in some $340 million in revenue last year. but there have been signs of trouble. the information report that

colleagues criticized fadell for his micromanaging style blamed him for a lack of new hardware products, key personnel we know had also recently exited the company. so what's next for nest? well, a former executive at motorola mobility has been named nest's new ceo. jan dawson notes that fawza has limited experience in retail and thinks this could signal a change in sales strategy for nest, away from the retail model towards more of a service model with a set of partners. more broadly, dawson thinks that with fadell now out, could make more sense to fold nest under google, given the ceo's obvious interest in smart home products of his own, creating one brand for the home rather than separate teams. nest, however, tells me there are no plans to make such changes. back to you. >> josh, thank you very much for

that. last week he didn't mention any of this although we probably knew it was coming. >> no, but the theme at code was going to be on the smartphone, to the iot world, the physical world, where digital and physical intersect. this is a classic example. i think it's way too early to call nest a failure. this would be akin to calling youtube a failed acquisition in 2008. this is clearly the future. there's a ton of data collection opportunities in the home, in the connected car, just look at the persistence of echo. it's the ultimate amazing trojan horse. >> when google paid $3 billion and change for this company, it was said that they were buying tony fadell. that was what made up that price tag. i'm wondering from a spectrum how expensive is his leaving for google? >> clearly expensive but there's no way to quantify what the

company has learned and what they feel is proprietary that's left after his departure. i think it does define the scale of how big google or alphabet can play when it's just experimenting. when it's just trying a new thing. $3 billion is a tremendous price tag for a 2-year-old startup. not a big amount of money for alphabet. >> finally, our new digital series "binge" launches today. before we go, what do you binge? what do you binge watch on television, anything? >> i binge "house of cards." >> guy? >> i binge the hbo series "silicon valley." >> two of the best shows on television as we -- i don't know why we call it television anymore. thank you, guys. good to see you both. for more, check out our live chat on the binge viewing phenomenon, facebook live today at 2:00 p.m. eastern time and

again, it goes live as of today. guys, thanks very much. when we come back, hilton moving closer to splitting into three publicly traded companies. we will talk exclusively to the ceo of hilton worldwide. plus we talked about barron's kr claim that unicorns are hurting the vc market. as we go to break, take a look at the markets in the green as janet yellen speaks in a little over an hour.

let's send it to simon hobbs in new york city with a special guest. >> yes, welcome back to the new york university hospitality conference where all the bigwigs from the lodging industry are a assembled including the ceo of hilton which of course is currently involved in moving to a more asset-light tax-free monetization of the assets with two spinoffs, notably the property reit for $10 billion. how is life? >> life is pretty good. people are talking about a lot of things around the conference but fundamentally, i think they're talking about the fact that the fundamentals are still pretty darned good in our industry. we are on the same store basis, we are continuing to see decent growth. on a new unit basis, speaking on behalf of hilton worldwide, we continue to set new records. >> signing up of new hotels,

developers. the virility of the business. >> we signed over 100,000 new rooms last year was the record. for us, i think a record in the industry. we are on pace to beat that this year. we continue to see new unit growth picking up. as you point out, it's a very exciting time for our company because we are in the process of taking what's a 100-year-old company and splitting it into three pieces. when that's done, i think we will have three industry-leading companies that are going to be very focused on the three individual businesses. pure play businesses. >> hopefully they will trade at a higher multiple. just on this signing up of the developers and the pipeline as you call it, are you going to be able to make hay over the starwood marriott merger? there is a suggestion out there they will be distracted, people will be fearful of their jobs. a lot of new developers may find themselves confused or locked out in certain local situations. what does that mean to you? >> i'm not going to comment on what's going on with our competition. i will comment about what we're doing. >> do you see opportunity?

>> i do see opportunity. we had a record year as i mentioned last year. we were on pace, we have already done 40,000 new rooms this year. we are on pace to have a record year this year. our strategy is different, okay? our strategy is really to have 13 purebred brands that are the leaders in their individual segments in each case, and as a result, have the highest level of market share which drives owners to want to build our brands which helps us drive industry-leading organic growth. we have chosen, we chose not to pursue the starwood deal, we chose not to pursue even though we look at just about everything out there when it comes up, any inorganic growth. we are leading the business in organic growth so great stat. hilton is about 5% of the world

in terms of existing stock. you look at all the rooms in the world under construction, we are 20% of all rooms under construction in the world. we are literally four times our existing supply of hotels in terms of where we are going and our growth rate. i think that's recognition that customers by driving high market share demonstrated by high market share and owners, because they can drive greater profitability, are continuing to sign up with us at greater numbers. our growth is at a pivot point and accelerating. >> the question is what's happening more broadly to the industry. your stock's down 25% over the past year. the new supply that's coming on, having been constrained for so long, it's been five great years. today we have the data that percentage occupancy for the first quarter fell for the first time in seven years because the supply coming on to the market is faster than the extra demand you are getting. let me ask the question. the question comes back to the

slowing metrics of the industry and whether the industry is about to turn down and you will lose -- >> i don't think so. let me debunk a couple of things. first of all, supply is still well below any historical averages. supply is in the mid ones against the 30-year average of supply growth of 2.5%. supply is not the issue. now, here in new york, supply is a bit of an issue but around the entire country, using the u.s. as a surrogate, supply is not the issue. what really is the issue and driving the lodging cycle is the broader economic cycle. so if you are confident that the business cycle, while it may be more tepid growth than we would like, if you are confident that you will see broader gdp growth continue, you are going to continue to see the cycle for lodging be quite positive and you will continue to see pricing gains. the first quarter did see a modest decline in occupancy. i think that was wholly the result of what was going on at the end of last year with the

fears of china, terrorist events and other things and into the first quarter of this year that really sort of shocked the system. by the way, the equity markets went down dramatically and have come back. i think you are starting to see that stabilize out. in the end i think you will see modest gains for the full year in occupancy as opposed to what you saw in the first quarter. that's what i would suggest to you. >> i wonder in the final minute we have, i want to bring you back to where the stock is and the spinoffs. notably you spin out the reit with 69 hotels to be called park as we learned on thursday, then the times share business. do you have the valuation, if they all trade according to the multiple that they should, where does the stock go? i ask the question because ubs is talking about $29, potentially 30% upside. >> as you would guess, i'm not going to comment on that. that's why we have analysts out there that can break it apart and do the math. we obviously think there's a lot of value imbedded in the breakup

of the company. it's really driven by three fundamental reasons. one, having dedicated management teams and frankly, dedicated shareholder bases that are more interested in those individual businesses because they're different businesses, fully activating all three businesses, the fact of the matter is our real estate business, we maximize what we have but we have not activated it fully in terms of new unit growth and there's huge opportunities throughout the cycle to buy assets, to be a consolidator in the industry. last but not least, and importantly, tax efficiencies and capital market efficiencies. when you take the benefits of those three categories of things, when this is done which it will be by the end of the year i think there's a significant amount of value to be garnered as a result of it. what exactly that is, the good news is markets are efficient and they will tell us. >> always great to see you. enjoy the rest of the conference. the ceo of hilton. guys, back to you. >> thanks, simon hobbs in new york. up next, what do venture

capitalists look for in companies before putting money on the line? some top names will take us behind closed doors on that process. plus a lot of talk lately about peak tv and whether we are in a content bubble. what about a social media bubble? >> are we in a social media bubble? will we look back at this in 20 years the way we looked at smoking? >> i hope so. >> you do? >> yeah. it would be fun if it all went away. then we could live our lives again. >> binge is streaming now. "squawk alley" will be right back.

tomorrow, cnbc will unveil our fourth annual disruptor 50 list, venture-backed companies changing the world and changing their respective industries. today, julia boreston talks to those investors who are helping bring the disruptive ideas to life. she is live in san francisco. >> reporter: startups are facing

all sorts of challenges. the lowest numbers of ipos since the last recession which is driving a slow-down in venture capital funding plus big questions about sky-high valuations of those startups. a partner at kleiner perkins which has backed disruptors such as uber says these challenges to taking their companies public puts even bigger pressure on finding truly disruptive companies. >> what that does for us is really make us double down and get even stronger conviction on our long-term strategy. again, we are not investing for a 12 month horizon or even 24 month horizon. we are thinking about how entrepreneurs and technologies and companies can be disruptive to the world for the next 10, 20, 100 years. >> reporter: though the ipo drought has raised concerns about venture funding drying up, that's making the established disruptors even more appealing. the companies on this year's list raising nearly twice

funding than last year's list. jerry chen's company has backed a number of companies on past lists and says there's more potential now than ever. >> now you are a car, a watch or phone, your house, now has technology in it. so when technology's everywhere, every industry should be a software business, every industry is a technology business which is why everything from health care to government to cars are all disruption now. >> reporter: that diversity will definitely be reflected on tomorrow's list. you don't want to miss it. >> thanks so much, julia. remember, that list gets revealed tomorrow, the 2016 disruptor 50, our exclusive list of the 50 most innovative, ambitious private companies around the world. that starts tomorrow, 6:00 a.m. eastern on "squawk box."

we have been doing this for four years and have learned about companies trying to disrupt mayonnaise, cybersecurity, cancer detection, it really runs the gamut. some of these are make-or-break companies. some are too disruptive. >> howe is one. you always know it's worth its weight when years later, we say originally was a cnbc disruptor four years ago. >> exactly. i guess the way this kind of reluctance or resistance to going public plays into that is i think almost more of them start disrupting one another along the way. you have these companies that are kind of gunning for the biggest private companies, at least initially before they go after the rest of the business. >> some of them make such waves that they end up getting acquired by some large scale tech companies. regardless, it is the way that we like to introduce our viewers to some of those names that you might otherwise not hear of. >> absolutely right. when we come back, check out shares of amazon today. once again, new all-time high.

what's driving that higher?

good morning. i'm sue herera and here's your cnbc news update at this hour. jordan says a terrorist attack on a local office of the national intelligence agency

killed five employees this morning. no one so far has claimed responsibility for the attack. a school bus plunged into a irrigation canal in southern turkey on sunday, killing 14 people, six of them children. 26 more were injured. the bus reportedly drove into oncoming traffic before being slammed by another car and then fell into the canal. hostess is recalling more than 700,000 cases of certain snack cakes and doughnuts out of concern for people with a severe peanut allergy. the items were made with flour that could contain undeclared peanut residue. dozens of people gathered for an interfaith service last night in louisville to celebrate muhammad ali, their hometown hero. ali passed away from septic shock on friday at the age of 74. a public funeral service will be held this friday in louisville and bill clinton will deliver the eulogy. that is our cnbc news update this hour. let's get back downtown to

"squawk alley." carl? >> thanks, sue. markets closing in the uk and across europe, of course, stocks finishing higher as minors continue to rally. uk pound under pressure. at least two new polls indicate rising support for britain to leave the eu. former london mayor boris johnson made that case for a brexit to wilfred frost. take a listen. >> we are working very hard now. i do think the message is definitely getting through to people that this is once in a generation chance to take back control from ainn institution tt is out of control, spending ever greater portions of tax payers' money and making it impossible for us to do all sorts of things you would expect a country to be able to do like control our borders, control our tax rates, help our energy companies, all sorts of things. >> obviously the worries weighing on home builders in

today's session. lot of discussion, increasing amount of discussion about that election coming up later in the month. amazon trading near all-time highs since its '97 ipo. the company at the forefront of a media industry in transition. new players, technologies and ways to interact and entertain. that's the focus of "binge" which launches today and leads us to a discussion we have with bravo's andy cohen whose job is to put content on traditional cable. take a listen. >> it's the wild west right now. we are now, we are not only competing with 500 other cable channels but netflix and amazon, who seem to have unending bales of money. amazon and netflix live at a bank and have all the money and they can spend anything. it's kind of terrifying, i would think. it is the wild west right now for programmers and developers.

>> isn't it a gold rush? >> it is a gold rush. >> how do investors cash in? joining us is foundation capital general partner paul holland. it is worth noting that foundation was one of netflix's earliest backers. good to have you back. good morning. >> thank you, carl. it's always great to be on with you. >> in light of cohen's comments, we all know where he's coming from, do you see it's a fair fight and for how long does netflix have that supposed advantage? >> well, i think netflix is a classic first mover advantage. they really came up with this. we invested w eed back in 1999. they had this strategy for a very long time and are executing on it very well. in fact, over the weekend, i spoke to some senior executives there and we were talking about the concept of your new show, this concept around binge and the comment i got back was binge is kind of leike a code word fo on demand. we have uber for transportation,

air bnb and home sweep for lodging and housing and netflix for on demand content. that's really what this generation of consumers is going to want to consume and how they want to be able to bring the information down. >> you know, i guess the question now for investors looking at netflix at this stage, is whether netflix has proven that exact concept that you just said. i know everybody else can kind of crowd in and try to steal i guess eyeball hours from netflix at least potentially. can netflix just be satisfied as being the first choice among many, if that's what it's going to be? >> yeah. the management of netflix is anything but satisfied. this is just a collection of ninjas that are running that company. i think you can expect to see some great things coming out of them going forward, just as you have seen over the last 15 years or so. we have taken this concept very deep. my partner has actually written a white paper called the sixth key of the decade of the cmo and

the title is called this revolution will not be televised, it will be streamed, snapped and viewed on virtual reality. i think we are entering kind of a new era here. there will be lots of new opportunities for venture funded startups and we are already beginning to see some of those cash in in the markets. >> paul, obviously the cash hoards that amazon and netflix have is one thing they have in common, but at code last week, jeff bezos said when we win a golden globe we sell more shoes. how different is amazon as a competitor because of their business makeup? >> well, i think anyone is going to be respectful of amazon as a competitor coming into this space or any other space. it's a very ferocious group of managers there and the way they kind of attack the market. i think we are beginning to see a bunch of different things come together. if you read the annual internet

report, she talked about the fact so many things are showing up in content and that content's ending up on places like pinterest and others where people are making purchase decisions around it. a lot of these things are linked. we have a number of investments we made along these lines as others have done, companies that are helping monetize video advertising, helping monetize mobile and so forth, and i think we are beginning to see, you mentioned the wild west, a conversation from andy cohen around content. we are seeing a new gold rush open up now around the infrastructure associated with this next generation of content and consumption. >> we were just talking about disruptors, disrupting other disruptors. is there a player that if they made a real commitment to content could steal netflix's lunch? >> i think there are a number of very small companies out there today that are working on variations of netflix's innovation and over the top programming. i don't see any of them that

have a chance at this point to be able to make a significant dent in their business. it's not something i think at least that we worry about so much. they really have that very very strong dominant position that's out in the marketplace. i think if you want to think about that, you might want to think differently. this whole notion of generation z consumers, as you know, i have three teenaged girls at home. so this notion that we used to live with of like the second screen, the second screen is really outmoded now. what we are seeing now is not the second screen. we are seeing the first screen might be linear tv, then the second screen might be netflix, then the third screen might be a social network like facebook or instagram. the fourth screen might be a messaging app like snapchat or others. i think what we are seeing now is things like messaging apps are beginning to overtake some of the social networks and content networks as ways for this next generation of consumers, middle school kids, high school age kids, to absorb content and news. >> that was terrifying, what you just said.

because there's no real way to historically go back and regress how these consumers are going to evolve because the tools, the building blocks that they are starting with, we have never seen before. >> but it's perfect. think about it. we love this kind of thing. what do we need to do now? we need to figure out how to monetize this, how to measure the target audience, how to segment. these are all the things that are happening under the covers right now. i think when you see this combination of what's happening around mobile, around social, and around this next generation of consumers, it's absolutely fascinating. the way that we absorb or certainly that i absorb content is fundamentally different than what we are beginning to see now with this next generation of people that are coming through. all those people are going to need new companies formed around their styles of consumption and these are some of the things we have tried to cover on the foundation capital website with this collection of white papers around how this explosion of

content, how this revolution will not be televised, how all these other things are going to come into play. i think it's a very very exciting time. i think for investors, you got to bone up in this area. you really have to read up. you can't simply look at the old favorites. there will be a lot of new exciting companies coming down the pipe. >> as old blockbuster executives can attest. paul, really appreciate you adding some insight to this. paul holland joining us from foundation. find "binge" starting today on youtube, hulu, apple tv or cnbc.com/binge. later today, a conversation with carl swanson of "new york" magazine and a.o. scott at facebook live, 2:00 p.m. google ventures was an original investor in nest before the company was then bought by google for $3 billion. what went wrong and what can google do to turn things around? a partner at google ventures will join us. investors waiting on janet yellen. the fed chair will speak at 12:30 eastern. we will bring it to you on cnbc.

coming up on the halftime report, we will be covering fed chair janet yellen's highly anticipated speech in philly and the instant market reaction. plus we are live at the super bowl of pharma, where we will talk to the ceo of roche pharmaceuticals. and barron's is calling for a 20% rally in whole foods. what do our experts think about

that? looking forward to seeing you guys in about 15 minutes. >> sounds good. see you then. speaking of barron's, are unicorns killing the 2016 ipo market? that's what the report published over the weekend said. the publication exploring whether or not highly valued startups are slowing down companies from going public. our next guest focuses on early stage investments, including medium, lack, john's and periscope. m.g. siegler joins us now. this article, how far-reaching are the consequences of any slow-down in the ipo market for the market as a whole? >> i mean, obviously things have been a little bit slow recently. i think there's two factors going on here. one, there's been an inundation of capital in the later stages of private companies and then of course, the few technology companies that have actually gone public have not been that well received by the market.

so those two things are playing into one another but i do think that these companies are using some of that money that's been in the later stage of the private side to be able to then take a little bit more time to get the business to where it need to be so when they do go public, things will look good hopefully in the public markets. >> as an investor who is putting money to work and as a board member who is advising ceos of some of these companies, are you more reticent about actually investing in some of these new companies because you don't know when you are going to be able to get the money out, and are you telling ceos that maybe talking about an acquisition or merger would be a better route than going public? >> i mean, i think in both cases, the situation has to be that the company gets to a place where it's in a sustainable way and it becomes either an attractive offering to go public or an attractive offering to a different company. i think the outcome we're always looking for is the biggest sort

of outcome in these companies to have the most far-reaching effect on the most number of pen people and whether that's being acquired by a larger company, it's a case by case basis, but always looking for what makes sense for that company to have the largest possible effect on the world. >> you mentioned a recent crop of tech ipos have not been received very well. do you interpret that as just a phase that we're in here in terms of startups and the product they are seizing on and whether they are ready to actually kind of take the public markets by storm? or is it something that i think back to when google went public, it wasn't as if there was this massive crop of great silicon valley companies coming public but google got out there and had something special. >> yeah. again, i think that what it comes down to is a lot of these companies need to be in a good place when they do go public. whether that's from the business perspective and also from the

story perspective, they need to really get their story down and figure out what it means to take this company, whichever company it is, to the next level. i don't necessarily think it matters on their peers but i do think there is some reticence around going public when they do see some of their peers, you know, just getting slammed and for what they might view as ways that are sort of unfair. they are being unfairly looked at in some ways. >> the smart home company nest which we have been talking about throughout the morning was an investment of google ventures before it was acquired by google. i know it wasn't your deal specifically, but we have been discussing the idea that tony fadell was the key man at nest, perhaps, he was the reason google paid $3 billion. given what you know about this situation, and the deal that was done, what can you tell us about how important he was to the strategy and what happens now? >> yeah. as you noted, google ventures, when it was called google ventures, now gv, was an early

vet investor in nest and saw it from the earlier stages and tony was very vital of course to getting the company to where it got to and being acquired by google, and you know, of course he was an important and vital part of that. but as he said in his letter to the world on the nest blog, this has been a transition that he's been thinking about for awhile and i think the company, seems like it's in a pretty good state right now. it's a very very large company within google, so they are bringing in a new person who they have experience with, who did a good job at motorola in order to run it and hopefully keep everything running just the way it has been under tony. >> finally before we go, the gv investments range from slack to john to periscope. you have such a wide range of sectors. i wonder if there is a theme or trend you think will be especially big in tech and for you going forward. >> yeah, so as you noted, sort of vr has been something we have been looking at pretty closely. one thing that's been getting a

lot of hype recently has been the chat bot phenomenon, if you want to call it that. i think the hype has gotten a little ahead of itself. there are some interesting things that are happening and i think we are starting to see that play out in a number of ways. certainly you saw it with facebook's conference, they took a lot, big step forward in making sure that these things are out there. i think we are going to start seeing a number of companies playing in this space. my recommendation would be just to take it very slowly. it's going to be awhile before we see any sort of major companies do this. but i think playing along with google and facebook, they can really take something and make a big business out of this. >> there's a sense we have to get to know a lot of really low quality bots before we get the really good ones. we will wait for that time. appreciate your time. >> of course. coming up, americans spend a ton of money on their pets, an estimated $62 billion this year. now some startups are trying to get a piece of that. we are live at a tech enhanced

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billionaire edhedge fund manager steve cohen tore down his house in the hamptons he bought in 2013 during a bidding war. he never actually lived in it. he plans to rebuild a two-floor mansion on the lot that will feature 9,700 square foot first

floor and the basement has equal dimensions. you are looking at the before picture. here's the after picture from the "new york post." he owns another house down the block in east hampton. pretty popular street, further lane, for new york's billionaires. >> yes. >> the wealthiest of the wealthy. the .01%. >> i'm guessing that's the minimum amount you have to leave standing to qualify as a renovation as opposed to new construction. >> unbelievable. amazing bubble in the housing market. this might not surprise pet owners but americans will spend an estimated $62 billion on their pets this year. we take a look at one company trying to get a piece of that action. >> reporter: so i'm sure you heard of a pop-up shop. what about a pop-up shop? startup bark and company is experimenting with a store where the dogs do the shopping. how it works is there's a

reservation-based system. five dogs at a time come into this bark shop live play space, wearing rfid vests so the owners can watch through a mobile app which products they are most engaged with and of course, the app offers a very easy way for those pet parents to buy the products. now, americans are going to spend an estimated $62 billion on their pets this year. that's up 4% from last year. it's an area of retail that continues to grow. the stats according to the american pet products association. >> dogs today are much more like kids than they are like hamster so we try to create products and service that really play into this idea that there's been a change in our attitude to our dogs. >> we want to bring disney to the dog world. so does he. so when none of that has been created, there's just a tremendous amount of innovation available to you. >> reporter: now, most pet

owners probably know bark and company for its monthly subscription bark box, which comes with products and treats that actually have been customized for the dog. it represents 75% of the company's revenue but they have expanded. they sold 25 million products to date. their website has ten million unique visitors every month. two of some of the more popular products for the humans is dog-nold and hillary kitten, depending which way your dog leans. >> that's a live shot for the ages. definitely closely watched by pet owners like myself. when we come back, another check on the markets as the markets are in the green to the tune of 118 points ahead of yellen in just over half an hour. eligibility? medicare you may think you can put off checking out your

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markets up 115 ahead of yellen. we'll see what she says in philadelphia in about half an hour's time. roundtable to follow on that. lot of fed speak to pay attention to throughout the course of the week. we invite you to watch "binge" and of course, 2:00 today, facebook live with a.o. scott of

the "new york times," carl wantson of "new york" magazine about what it means to binge watch anything in our culture, where critics fit in, what a good spoiler means. amazing how the discussion has changed the past few years. let's get over to headquarters. scott wapner and "the half." welcome to "the halftime report." we begin with breaking news. the countdown to the fed chair. janet yellen speaking at the bottom of the hour in philadelphia in what is no doubt one of her most anticipated speeches in some time. we will take you there live once it begins. we have a panel of experts with us today. joe terranova is here with stephen weiss, josh brown and pete najarian. stocks are higher ahead of the fed chair's comments. we are watching interest rates, we are watching the dollar today. there is the ten-year note at