grown photographer eric chang joins me this morning to talk about drone policy and the future of automated flight. daniel bet his savings, you'll change your internet address. and the smallest of startups. inside first floor labs. our reporters venture meets. this week on press: here.

good morning. i'm scott mcgrew. drones are an inkrezbly sensitive and misunderstood topic. they're not illegal to fly, though there are specific rules about who can use them to record video. you're not supposed to fly them near airports, though someone did last week near l.a.x. >> one of those radio control helicopter things. it went right over the top of us at 4,000. >> when we talk about drones we're often speaking specifically about this brand. the drones feature an incredible amount of technology including gps, auto pilot and a camera for relatively little money. it was one of these drones that made an unexpected visit to the white house earlier this year. here to talk to us about drones

is eric chang, a stanford computer science grad. and a former photographer. joined by dylan tweetty of venture beat. this television show, we've done two, 300 episodes. and my bosses let me do this tv show any way i want. they trust me to do a tv show. this time they found out we were talking about drones and they wanted more information. they wanted to know what video we were running, how we got that video. even on a television station people are very sensitive about how these drones are used. >> yeah, absolutely. we have found that to be the case. it's mostly because here in the u.s. the regulatory landscape for commercial use is still sort of up in the air. >> i'm not to use drones in a commercial sense, is that right? >> yes but it depends who you ask as well. all this is being figured out

right now. >> is that not as much as an issue in other countries? >> it's in fact not as much of an issue because most countries say across europe australia canada, have already figured out how to use these commercially and are allowing people to use them commercially. here in the u.s., we're trying to catch up because it's been really clear how useful these tools can be. and we want to encourage everyone to do so responsibly. >> how long do you think it will be before the faa catches up to the rest of the world? >> it's relatively unknown. there have been repeated delays. after that, there will be a common period. so it could be as much as a year or two years before whatever is proposed -- >> it's a very strange place to be in. it's not, you know did you break the rules or did you not break the rules, will somebody please tell me what the rules

are. and nobody seems to be able to do that because they're still figuring them out. >> there are suggested guidelines. and we try to push our users into following those guidelines. one of them in the 400 foot aboveground level. if you just go straight up -- you buy this thing, you get excited, go outside. at 4 feet it will stop. >> that's got to be easy to hack though. >> it's totally easy to hack. we don't want to prevent people from flying above 400 feet necessarily, we want to encourage them in a strong way not to. >> why are we behind here? this is a huge market for you guys. this is one of your biggest. >> the u.s. is absolutely our biggest market. we're behind here because technology has been moving so fast in this space, it's hard for any regulatory environment to keep up. the faa's mandate is not to

allow drone use. it is to have safe skies. their only mandate is safety. >> is the fact that the company's based in china part of the holdup here? we've seen what has happened to other chinese companies trying to come into the american market and being shut out in many ways. >> not that i know. so far, it hasn't been an issue at all. most electronic goods are made in china. we're in coalitions here in the u.s. with all sorts of companies trying to do other things than just take pictures in the air. >> the fact that they are electronic where you can build in safety. assuming you're not hack k them or using them the way they're designed. the one that landed on the white house grounds, you then updated the firmware so they can't fly over the white house anymore is that correct? >> quite some time ago, we

implemented no fly zones around airports. how do we access that data and make it consistent across the platforms. so we're continually adjusting from a technology standpoint. but the responsibility really lies upon everybody. >> of course. with any tool. i mean, obviously, the user. with that said if i take a dji drone into the parking lot of sfo and turn it on it won't fly is that correct? >> wasn't there a problem with the software though? the geo sensing software? >> well, there are continuous updates. if you have old firmware you take a product you bought two years ago and unwrap it it doesn't have that geo sensing in there. >> also being flown by the nsa i believe. >> they got their own rules. >> really what i meant by

everyone being responsible, not just consumers. it's the regulatory bodies involved, it's the people using the products. if you go to the u.k. for example, and someone buys one everybody knows you're not supposed to fly in certain areas. the rules are very well established. >> kids model airplane, you also not supposed to fly next to the airport. >> right. >> nothing changed with drones. i was looking at an older article that was saying back when the first camera phones came out, people were really generally upset over the potential of everybody carrying a camera. >> privacy. >> those are conversations we have to have about new technologies. then you do sort of look backwards and say you know what, we somehow managed to survive. >> this is a little different because it's a flying camera basically. >> yeah. >> it has the potential to be more invasive because you're not up there holding it in

somebody's face. >> or dangerous. although it captures a lot less data than your phone does. your phone is capturing your location at all times. we're taking pictures with a gps stamp. for some reason people are much more concerned about a picture coming out of something that is unexpected. in fact, a helicopter, hot air balloon, stepladder next to your fence, they're all sort of similar tools and air space is very complicated. >> so i want to know about the backlash. it was rand paul that said if somebody tried to fly a drone over his air space he would shoot it out of the air. >> especially carrying vaccines. >> do people shoot drones out of the air? >> there have been a couple instances of it. those people have been prosecuted because you can't just discharge a firearm into the air. this is something the ntsb said

in november you're flying at an aircraft which is a federal offense. don't shoot these things out of the sky. >> once again using a tool responsibly. one last quick question. the people who buy your drones who use them beyond photography. hey, what does my house look like from the air, what can you do with it once you've take an picture of your house from the air? >> vacation videos are very common. you can imagine it as a freeing -- unlocking the third dimension for a camera and movement. people want to feel creative all the time they're looking for new ways to document something. drones are a very good way to do that. roof inspection these are practical things to do as well. the line between hobby and commercial use is not hard you know. when you have a tool that's very useful it might become obvious

one day that you can do something with it that will save you one. you may not have to climb up on a ladder. utility inspection. these sorts of things from companies. >> eric chang with dji drones. we wish you the best of luck and your industry as well. up next can anyone really buy an internet address. meet a guy who essentially bought all of them when %:here continues.

welcome back. we've talked about the new top level domains on this show before. things like dot store and dot buzz and even dot ninja. you can buy internet addresses using these domain names now. you buy them from people who paid $185,000 to manage them. daniel owns .xyz. he is the youngest registry operator in the world. explain to me how this works. is it that xyz was available and you bought it or you said i want to invent .xyz. >> i can -- which is the regulatory body that governs the internet had an application process where anybody could apply for any new top level domain name.

>> it was something you came up with. >> it was my baby. i figured you end the alphabet with xyz, you should end a domain name the same way. >> so if i want scott mcgrew don't xyz i'm buying it from you. >> that registrar buys that domain from the registry. >> how many of these have you sold so far? >> we've sold about 800,000 domain names since we launched june 2nd of last year. >> how much do you get per domain? have you paid off that 185 k. >> i paid it off the first month. our wholesale price is $8. >> the thing that's going to bother all three of us i don't think any of us have gone to

a .xyz website. >> not yet. >> to whom did you sell them? they have terrible websites because we're not going to them. >> it takes more than a few months to build a website. it can be incredibly complicated. people forget dot come was started 30 years ago. we are selling domain names all over the world. we're about 30% in the americas. about 35% in asia. we have retailers who are selling .xyz domain names and they're building websites every day. we found that almost a third of all .xyz domain names are currently being used today. >> are these mostly small businesses? >> with xyz we're trying to really appeal to everybody,

whether it would be a business or individual. we are more utilized by small businesses around the world that want a top level domain that provides them truly like a worldwide brand that doesn't fit them into any specific box. they have no borders with a a .xyz. >> which other top level domain names have been most popular? i've seen so many and which ones have taken off. >> all of the original top level domain names and there's about 700 new top level domain names that started coming out last year and they are still coming out. so there are some coming out like a .web or .store. there's about 500 of them out today. some of the more popular ones would be like a .photography or

a .supply. most of the new extensions that have come out are specific for some specific industry where we're trying to change the game a little bit and really trying to be for everybody by having no meaning. the meaning is to the left of the dot. >> i'm just not seeing any of these. >> is it possible that -- clorox is buying clorox .xyz out of safety. >> 8 bucks right? >> most retailers are selling it for less than $10 a year. most of the registrants are the new internet users. we're really trying to target that next generation internet user. somebody coming online for the first time that maybe didn't have the privilege of coming online 20 years ago and securing

nbc.com. >> they can't have nbc.xyz. >> that said you don't have to come up with absurd ones either. you can have actual words, or has somebody taken pretty much all of those. >> there's a lot of dictionary terms available today. there's a lot of three letter, three number. about 98% of all four-character xyzs are still available today. there's 800,000 registered. and there's 116 million dot comes that have been registered. >> they register domain names and don't use them immediately. they're holding onto them because they might be useful later or might want to sell

them. >> made a couple bucks himself doing that. >> of those two-thirds of your registrants, i mean, it's sort of a question what those people are doing with them how much they're concentrated in a few domain name land or what have you. >> there obviously is speculation in any market. and with .xyz we've seen an above average utilization rate. for one-third of them to be used when we launched seven months ago, i think that's pretty good. most people are using these for future ideas or new startups or businesses that they're coming up with. we're seeing this use case happen especially in the emerging markets. somebody in china when they're being presented the option to buy, a lot of times they're choose an xyz. for them xyz being the last

three letters of the alphabet it's really transcendent. the letter com doesn't mean much to them. >> it actually makes more sense. >> when they're coming online they're choosing an xyz as their brand. and we're also seeing a lot of people rebrand completely. a great example might be homeless-international.org. you've probably never heard of that. they completely rebranded on an xyz. that's really what i'm trying to do is provide competition and choice in the name space. i'm seeing other registries slash their prices because we're so affordable. it's awesome to see people completely rebrand sflg we wish you the best of luck with the .xyz boom. >> thank you very much for having me. >> if you'd like more information, we have an interview with the head of

domains, for ican. up next inside first floor labs when press:here continues.

first floor labs on a tour with an aol executive a number of years akboe, back when aol

had less need for office space. they'd given that space to local kids mostly from stanford. now, while aol gets no equity in these kids the company does get to keep an eye on them as they work on the next hot thing. first floor labs has grown over the past few years as aol has gotten smaller. this is also a graduate of a price checking company got its start there. one of the first things i want to clarify it was on the first floor. it's not anymore. >> thank you so much. we started on the first floor but we've graduated and we're on the third floor. >> kept the old name. >> domain and everything. e-mail addresses. >> the way it was explained to me is aol thinks it's smart to have younger, smart, go-getters in the building so what the

heck, give them a couple offices. >> our goal really is to help people do their startup. we know doing startups is hard. there's a lot of shared knowledge that happens when you're around a bunch of other people also trying to do startups. >> this seems a little different from most incubators though. most of them have this rigorous program, they have mentors and a demo day, they want a piece of your equity. you don't have any of that. >> we say -- we're not going to assign you a mentor. there's no pressure in three months to get to a demo day. there is a six-month program, but as a result we get teams that are more -- they have seasoned professionals. people who used to work at google. >> i did say kids but it doesn't have to be. it could be people working in their garages, it could be older people who say, office space.

>> how do you pick them? >> we have a vetting process. they submit an application. it's a six-month program. so everyone starts for the beginning of six months and is around for the whole six-month class. >> is there one i would know? a graduate i would say, i didn't realize that. >> aifuate was one of the teams that came through the program. we said great we'd love to have you in the space. they recently sold to yahoo. another one is pixel apps. they just got bought by drop box. we also have some that haven't exited yet. earnest is one of those. >> oh, yes. >> he's been on the show. they've raised $15 million so far. we're really excited that they were part of the program. we have osmos. >> and you've got your own.

what is smoopa do? >> our goal is to help people shop with confidence and not over pay. we saw the proliferation of mobile devices really was going to change the retail industry and the commerce space in general. we said we want to be part of this. and really to help people with information to make better purchasing decisions. >> you guys have the cutest name in the world. >> there are things like fandango and google for that matter, that now you don't even think about them anymore. >> smoopa. >> yeah. what did first floor labs give you that you wouldn't have gotten out of a garage? >> one thing is you know we were working out of my apartment. we think ourselves, one step above apartment, one step above a coffee shop. without office space, you're trying to go to a coffee shop.

so it's a place where you can be and actually work on your startup. the other part that's helpful is the network of people. so you're surrounded by other entrepreneurs trying to do their own startup. so there's a lot of shared knowledge. when we were trying to launch our app, it was one of those cases where one of the other teams had already done this. we could go to them and share that information. same thing goes for fundraising. there's a lot of information that can be shared between our teams. >> does aol have any association with the companies? >> so aol is a sponsor of the program. they provide the space. there are some of them that will help us. but they're a sponsor of the program. but they don't take equity in the companies. there's no vested interest. >> what does it cost the companies? >> so it's a free program. it's a free six-month program. our goal really is to help them. you're getting started.

it's a really hard time as a startup to get the company going. >> and what's in it for aol? >> i do have an idea for you that i'm going to leave you with and that is smoopa.xyz. >> not yet, but maybe i will. >> thank you for being with us. we'll be back in just a minute.

that's our show for this week. thanks to my guests. i'm scott mcgrew and thank you for making us part of your sunday morning.

a moment of pure magic. >> intercepted at the goal line! >> announcer: the following is a presentation of nbc sports. the city of big shoulders, chicago. those shoulders are all cover up today because of sub zero chill. in the warmth of qulited center the proud warrior head is worn by jonathan toews. eight years in the league. two stanley cups. two olympic gold medals. about to face the man wearing the triangled penguin of pittsburgh. sidney crosby. challenging for for a world class title.