emily: unarmed? kim: completely unarmed. emily: what did they take?im: thousands of servers, offline, that hosted the data of millions of users that have used our web services. emily: most of your assets are still frozen. kim: they are now saying everything they have seized here now belongs to the u.s. government. emily: i know you have said you are broke. would you call yourself broke now? kim: we recently had a judgment from the court releasing $4.6 million for legal fees and living expenses. so at the moment, if that judgment is not appealed, financially, i am in a better position now than i was a couple of weeks ago. emily: have you thought about moving to a cheaper place? kim: yeah, but that would also mean -- it is kind of my last stand, fighting for my castle, for my home. you know, i am also trying to send a message to them and show them i am not going to fold over. you know, that i am going to fight back. emily: right now you are wanted by the u.s. government in the biggest copyright case in history. the charges include racketeering, money la

emily: where did it end?ony: it ended at literally -- we are going to do this, and tony, we want you to lead it. i had been in other executive presentations, where it was like, oh, it will take four months to decide, or whatever, -- it was, no. from the beginning of the meeting, he was fully engaged, to the end of it, ok, commit and we are going to do it. emily: we are going to take on sony. tony: i said we have to deal with sony. he's like, we're going to get sony. i'm like, but sony is number one in every audio category, in the world for personal audio. how are we going to beat it? he is like, no, we're going to do it. emily: you have become known as the godfather of the ipod. which, in a way, makes you the father of the entire product line. the ipod, the iphone, the ipad, maybe the watch. but really, the ipod itself had such a dramatic impact on everything that apple has done since. tony: it was a big turning point, going from computers to consumer electronics, for the company. emily: what was your relatio

emily: really?tion i was going to ask is, how do you get on the top list for every entrepreneur? steve: when were first investing in space, there was that no one else saying they were in space, so what i try to do is be visible and vocal. and then they find us. we don't need the same sort of infrastructure to track down the opportunities to compete with everyone else. in fact, i think a venture term -- firm is ideally a small team of five to seven people, no more. i think almost every endeavor, whether it is creativity, or decision-making, or a state of ambiguity is needed, if you go bigger than seven, you are less effective. emily: so what is next for steve jurvetson? steve: i think you will find me learning. one of our companies is working on pigs. we want to harvest organs for humans by changing the immune system of a pig to be like a human. i think the field of biology and information technology -- we will grow technologies, we believe all technologies, we will build things that feel like brains

emily: why now? chris: why speak up about it now? emily: yes.hris: the way i see it, i think we have the team to execute on this stuff. i think dick finally has his squad. emily: why do this publicly? why didn't you pick up the phone and call dick? why not email them? chris: i have. i wanted to take a shot at doing it externally. the audience important for me was those working at the company, not just senior management. people who have been there a long time that are just, "yes, yes, yes." if the company starts delivering on it, i think everybody wins. emily: you are not an engineer, you're not a product guy. why should they listen to you? chris: that's a good question. i do not know. i have a track record that has worked out pretty well. uber, instagram, kickstarter, optimizely, gawker, twitter. these are all things i would like to think one or two of them would be lucky, but at scale, it is probably not an accident. at the same time, i think you have to trust your own intuition as a person. like to think one or two of them would be lucky, but

♪ emily: you are 30 -- drew: 32. emily: 32 years young.is the hardest lesson you have learned as a ceo? drew: well, i think the hardest challenges are really around people. you know, you bring 1300 people together and get them all pointed together in the same direction. in any group, there will be people who are unhappy. how do you get people to collaborate even if they have different backgrounds? emily: i know you are friends with mark zuckerberg. what kind of advice has he given you? drew: he has given me a lot of advice on company scaling. how do you organize people? how do you set up? with scale, you have to be a lot more thoughtful about how do you compensate people, how do you think about mundane things like their titles. you have early stage things, have more merger products, a -- you have more mature products, a portfolio. how do you keep that running when the challenges are so different at either end of the spectrum? a lot of things like that. emily: your cofounder arash -- i read that it was like married at first sight at the beg

emily: where did it end?ony: it ended at literally -- we are going to do this, and tony we want you to lead it. , i had been in other executive presentations, where it was like oh, it will take for one set aside -- no. from the beginning of the meeting, he was fully engaged at , the end of it, commit. emily: we are going to take on sony. tony: i said we have to deal with sony. sony is number one in every audio category, how are we going to beat it. he is like no, we're going to do it. emily: you have become known as the godfather of the ipod. which makes you, in a way the , father of the entire product line. the ipod, the ipad, maybe the iwatch. really, the ipod itself had such a dramatic impact on everything that apple has done since. tony: it was a big turning point, going from computers to consumer electronics. emily: what was your relationship with the stephen leicht? very professional. there were times it was friendly. i would not say we were friends, per se, in terms of hanging out. it was friendly, but

emily: some people say -- dick: you suck, get off. emily: exactly.hter] dick: i say i have heard that before. it was in an australian accent, though. emily: how do you deal with that? how does your team deal with that? and how do you, as a person, deal with that, when people say you should be fired? dick: i got invited to something a couple of years ago. and my daughter thinks that you should totally go to that. i said, i don't think i will because i got invited because of what i am, not who i am. i got invited to it because i'm the ceo of twitter, not because i am dick costolo. so i have always tried to make sure -- i have never paid too much attention to the, you know, ceo of the year stuff because the worst ceo of the year stuff is, you know, right around the corner. i therefore do not get worked up or, frankly, care too much when people say those things. in fact, i have had to make myself care a little bit about them only after i started realizing, oh, it could affect recruiting if people start thinking, well, i want to go to twitter but what if,

emily: on valentine's day. chad: so romantic. emily: describe the last 10 years.had: for me, it has surpassed all of my expectations. we were really simply trying to solve a problem for ourselves and our friends. how do you share videos that were sitting on your desktop? and despite observing our own problems and coming up with a simple way to re-encode these videos and allow people to share these videos on the web, it kind of unlocked the potential for everybody else. emily: the very first video on youtube really was one of you guys going to the zoo. [video clip] >> the cool thing about these guys is that they have really, really, really long trunks. chad: it's not a cat video, but it's not bad. [laughter] emily: 18 million views, almost 19 million views. chad: really, that video and many others, we were uploading internally to test the system. yeah, shortly after that, we started receiving quite a few other uploads from around the world. emily: who is that? chad: that's jawed, one of the three of us that started the site. there is also steve chen. unfortunately,

emily: what year was this? chris: 2007. emily: this was before drones were cool.hris: well, it was before drones were available to regular people. so there were military drones, but something had happened. in that moment, i got chills. it should not be possible for a dad and his kids to build a drone on the dining room table with toy parts. this was a moment -- 2007 turned out to be the key year. so this hardware renaissance that you have heard is all started in 2007. the guts of the smartphones -- the chips, the processors, they were being made in the millions. the reason regular people were able to make things like drones is that the essential enabling technologies were now available to everybody. the question was, what are we going to do with them? emily: and by drones you mean something that has its own brain. right? chris: exactly. the drones are aircraft that fly themselves. you can if you want manually control them, but you don't have to. they have gps, they have sensors, they have cameras. what that is is essentially a flying robot. you don't need any skil

emily: but does not like?nne: i think sergey and larry, they did not started as they wanted money. they had the dream of having a world of information on their laptop. they could have sold the company and then professors and life would've been good as well. i would complain to larry about the health care space and how much i felt like it was dysfunctional. you're either part of the solution or part of the problem. that was very much them. fix it. emily: he was predisposed to parkinson's disease. that became a critical part of the story of 23andme and how you communicated what you were trying to achieve. anne: it came out just around the time that we were starting 23andme. we were talking about getting him tested. i was talked out of it. they told me, what would you do with the information? i found that really offensive. how dare you tell me what information is valuable for me. it was convenient that we had a spectacular science team. they put the mutations we were looking for on the chip. i was looking at the

emily: three kids? chamath: three kids, you know, in a 2 bedroom, 400 square foot apartment, lived above a laundry mat. two bedroom apartment. they grinded it out. they did everything. they put us into good schools. they found a way to give us music lessons. how do you do that on $32,000? emily: your mother was a housekeeper. chamath: she was always trying to better her english to take equivalency exams to become a nurse. unfortunately, that never happened for her. she was able to become a nurse's aide. my dad struggled to find a job, worked in a photocopy store for a while. then finally got a good job as a civil servant. the best he could do was escape a difficult situation and try to set an example and, you know, hopefully the kids will learn and do the same thing. that is my motivation to say what is on my mind. the reality is, silicon valley trades on two things, right? one is lore, and the other is success. so in terms of lore, i think i've paid my dues. i have lore. i have worked in three of the t

emily: are you saying you will someday? hugo: of course. emily: what will it take?ugo: a sizable team to manage the process operationally, certification, ongoing engineering help. and so on. emily: months away, years away? hugo: no less than a year plus away. potentially much more than a year away. emily: you spent a long time at google. google is blocked in china, apps are blocked in china. is there a way forward for google in china? hugo: i don't know. it is a tricky issue. i do believe that it may not be the end of it. i personally don't think that it is the end of the road for google in china. purely thinking for how useful google is and the fact that people in china are universally study abroad. they depend heavily on google even despite the fact that it is blocked. that i just think at the end of the day someone is going to figure out a way to solve whatever issues exist to bring all of this innovation to the people in china. emily: how satisfied are you with the pace of innovation? hugo: i'm quite happy. undersan because i tand how hard it is to make progress

emily: tell me about when you met steve jobs. tony: there was a birthday party where i met him for the first time. the next time was to give the pitch for what would become the ipod. emily: you gave the pitch for the original ipod? tony: i was leading the charge in talking about what it was. it was literally a layout of what digital music could be, what the challenges were. there were three different concepts. the one we thought the best was the most expensive, the riskiest one, and steve was very engaged in it, very much driving. we had a presentation, but he flips through the deck and jumps around. there was no linear format. you just braced yourself for impact. you threw out conjectures and rolled with it. emily: where did it end? tony: we were going to do this and tony, we want you to lead it. i had been in other executive presentations where it would take four months to decide. at the end of it, commit. we have to deal with sony. sony is number one in every audio category, how are we going to beat it. emily: you have become

emily: right, right. you see dfj's place in the hierarchy today versus 20 years ago when you started? steve: i try not to compete with any of them. in a healthy economy, you are going to have different firms that do different things, have different strategies. if we are doing our job well, we will not come head-to-head with the same group over and over again, because that might imply we are doing the same thing they are, and why would we do that? i like looking for industry sectors that are not over -invested. frankly, no one else is competing for the deal. the vast majority of investments i have made, there was no competing offer. emily: really? the question i was going to ask is, how do you get on the good every entrepreneur? -- top list for every entrepreneur? steve: when were first investing in space, there was that no one else saying they were in space, so what i try to do is be visible and vocal. and then they find us. we don't need the same sort of infrastructure to track down the opportunities to

emily: what about layoffs?e things you are saying is that companies -- there is essentially a hiring freeze. george: a lot of them are silent. people are not announcing them across companies. the execs are telling people, hey, we are not going to hire more people. slowdown. we need to decrease the burn rate, even though there is a lot of capital. let's hang in there for a while until we figure out the financing environment. emily: how does this play out? george: i do not think it is a mass explosion like 2000. i think we will see the balloon slowly deflating. so we will see more employees that are available in san francisco to work in tech. there will be a slow deflation in the amount of companies. it means lower salaries. it means lower rent in that area, which is good. emily: it is really the employs who suffer, right? george: sure. the landlords suffer. i am not too sad about that. emily: thank you. you always give it to us straight. coming up, we will talk about drones. they describe themselves as the data-

emily: wow.teve: but just sending something to mars and not getting it back, they can do it a lot sooner, in a year or two. emily: you have a tesla model s and model x. do you have a preference? steve: i like them both. emily: you have the very first s ever made. steve: yeah, elon and i got the first production model x. emily: how is it performing? how many times has it been serviced? steve: not much. i have yet to replace the brakes. there is no spark plugs, no muffler, none of the usual stuff i used to get maintenance on, like tires. emily: so what features are you most excited about? steve: i get very excited about the future of driverless cars. for most of us, driving in one of these -- a lightning bolt goes off in your head. you look back and think, why do we let our teenage kids drive? 10 years from now, we will look act and think, wow, we thought that was ok? the weight will come to market is an uber or lyft-like service without a driver. in the abstract it is scary, but in the reality it'

emily: what happened?teve: it failed, but they can push that aside and put in a replacement design that won't have that problem. emily: will spacex get to mars? steve: absolutely, 20 years. emily: 20 years to get the colony started? steve: yes. if you just want to send something to mars and not get it back, you can do that sooner. i could do that in a year or two. steveemily: you have a tesla mol preference? steve: i like both tesla models. emily: you have the very first s ever made. how is it performing? steve: great. i have yet to replace the brakes. there is no spark plugs. there is no smog check. thingare really the only that has needed anything. ted abouty exci autopilot. to drive one of these is like a lightning bolt going off in your head. it is so obvious it will be awesome. we will be looking back and wondering, why did we let teenage kids drive. we will look at ththe present and think, wow. it will come to market as a service, and uber and lyft like service without the driver. vehicles that could

." ♪ emily: i'm emily chang and this is "bloomberg west."rocrastinators gave thanks for online delivery service this holiday. first to our lead. a short but busy week in tech news. the latest unicorn, jet.com announcing a $350 million funding round. fresh capital as holiday shopping ramps up. hewlett-packard posting its final earnings as a single entity -- and the results were not pretty. cory johnson joins us live on set. this is a massive round for jet.com. spencer: a lot of money heading into a critical time. this will be their first holiday shopping season. you are right to note some investors doubled down. they see something they like and they are throwing more money at it. emily: jet posting a growth rate of 65% between september and october. that is impressive. spencer: one investor i talked to was impressed that by the end of the year, they are expected to be on an annualized rate of 500 million in overall sales volume. they are growing and they are throwing money at it as long as it keeps growing. emily: they are offering steep disc

emily: tesla names a new cfo. higher after hours despite weaker than estimated third quarter results. i'm emily chang and this is "bloomberg west." etsy reports of mixed quarter with some warning signs ahead. a multibillion-dollar buyout. twitter hearts changed but existing users, not so much. we talked to a former board member about jack dorsey's latest move. first let's get caught up with our bloomberg first work news. u.s. stocks extended a rally today with the s&p 500 hitting a three month high. chevron gained as crude oil climbed to a three week high. the energy group has rebounded 22% from an august low. visa and apple helped send the nasdaq 100 to an all-time record, topping its previous record from march 2000 during the dot-com bubble. volkswagen said approach indicates an additional 800,000 cars showed your regular emissions output. the german carmaker said the economic risk amounts to -- volkswagen may be liable for fines of as high as 18 million dollars and faces further cost from lawsuits in the u.s. a

hugo: hi, emily, how are you? emily: it's so great to have you here. hugo: my pleasure.mily: how is your chinese? are you taking lessons? hugo: my chinese is coming along slowly. maybe next time, we can do it. emily: i am going to hold you to that. that is a big promise. hugo: next time may be two years from now, three years from now. it is a hard language. emily: i understand they call you tiger brother. "hu ga" is your chinese name? hugo: "hu ge." emily: how did you get that name? hugo: our ceo, lei jun, who is a social media rockstar, superstar in china, just did a simple post on weibo. and he said, "hey guys, hugo is joining us from google, we have to give him a name." then people went crazy. everyone started suggesting names. i had no say in it. i was communicated on my first day -- by the way, you are "tiger brother." emily: the big question is when are you going to start selling phones in the united states? hugo: i would tell you if i knew. but i don't. we don't have a set date yet. you know, selling phones is a big step up. it is a huge marketing undertaking. you

emily: did you consider selling? anne: the idea that genetic testing will be a foundation for health care in the future was core to my being. i am wedded to this company for the rest of my life and i was not interested in selling. i was not interested in closing up shop in saying this is too hard. we need to refocus. we need to hire the right people. we have a major miscommunication. we need to make sure we are executing the right way. emily: it was an arduous process. you hired people who could better interact with washington. how did you get there? anne: picking up the phone and called everyone i knew and said who are the right lawyers to talk to in d.c.? who should i talk to? how can we figure out the past moving forward? she understood genetics. she understood the fda and added a level of structure to the company. emily: there is so much more you want to accomplish. the test for breast cancer and alzheimer's, those of not been ve not been approved. anne: that is the top my priority list. customers really want tho

emily: the u.s.s more than any country in the world on education. $1.3 trillion a year. and yet still, we are 25th in math, 17th in science, 14th in reading. what's wrong? sal: if you went 50 years ago and you said, give me a list of the 10 most innovative companies in the world, maybe 30% would've been american. if you were to do that list now, probably 80% would be american. what i like to think about is how can we bring that spirit of entrepreneurship, that spirit of failure not being stigmatized, how can we bring that to the schools? the transcript of the future doesn't just need to be your gpa and your test scores, it can be your portfolio of creative works, it can be your peer feedback. being a engineer is a creative endeavor. being a designer is a naturally creative endeavor. show us what you have done. emily: the u.s. is the only developed country with a high percentage of top performers and bottom performers. we live in the heart of innovation in the world, and the public schools in san fran

emily: i am emily chang and you are watching "bloomberg west." tensions escalate between turkey and russia after the turks should down a russian fighter jet. a billionaire catfight in space. and, going mobile fast. watch the games and go shopping from the comfort of couches this weekend. first, to our lead. officially split into two separate companies earlier this month and today had the combined results. down year after year, combined airings 93% -- $.93, and down from last year. away, issued a separate outlooks for the first quarter and warned profits would be lower the end expect that. profits tumbling. it expects first-quarter earnings lower the yen estimates. hp enterprise shares flat. software enterprises headed by meg whitman expecting below estimates. joining us, crawford and here , ourme in san francisco editor-in-chief corey. down so much.es we see a business shrinking on every count. the topline shrinking, profitability shrinking. when we look at some of the businesses, print is down 14%. i went back and at every model. biggest decline

emily: facebook shares surging after hours. ♪ i am emily chang and this is "bloomberg west."xpedia books a multibillion-dollar merger. i sit down with nest ceo, the godfather of the ipod. we talk about steve jobs and his vision. worries about cord cutters from cable stocks. are they cannibalizing their own business by doing deals with netflix? first a check on our first word news. u.s. stocks retreated from a three-month high today, remarks from janet yellen indicating we may be closer to a hike in interest rates. the s&p 500 slipped about half a percent. the dow dropped 51 points. latest u.s. intelligence suggest the crash of the russian passenger jet in egypt was most likely caused by a bomb planted by the islamic state sinai affiliate. the u.k. has suspended flights to and from the sinai peninsula as a precaution. egypt confirms the voice recorder is damaged. information from the date of recorder was successfully copied. there was serious damage to the voice recorder. among u.s. election day winners - airbnb the company fought off a ballot measure to limit the service in i

that is next. ♪ emily: i am emily chang and mrs. "bloomberg west -- and this is "bloomberg west."aker of architectural and engineering design software is being targeted by an activist investor. a stake of about 6% in the company and says it thinks the stock is undervalued. investors and regulators put more pressure on volkswagen after the company said it understated the carbon dioxide emissions for 800,000 cars. it was the first full month results since pw admitted to cheating on diesel admissions -- diesel emissions test. kata's problem is more costly. honda will no longer use the airbags in its cars. honda was their biggest customer. honda says they miss right -- misrepresented test results. dropbox says it has 150,000 business customers. the clout first provider is facing stiff competition from the likes of google, microsoft, lots of skeptics questioning their business model. the company added 50,000 paying business customers. ventures, founded in 2009, it has quickly become one of the most active inter-capital firms in silicon valley with investments in over 300 companies. bee

traded companies. ♪ emily: i'm emily chang and this is "bloomberg west."oming up, a muscular third-quarter earnings report from fitness device maker fitbit, but shares slide after hours. plus, mobile payment firm square could hit the road early next week and likely investors will have tough questions for the c.e.o. and germany's infineon technology said to be the leading candidate to snap up fairchild semiconductor. first up, bloomberg news. more than half a million leave u.s. prisons every year, but with jobs and mental health services scarce, many are soon back behind bars. president obama today called for breaking the cycle of incarceration. president obama: millions of americans have difficulty even getting their foot in the door to try and get a job, much less actually hang on to that job. that's bad for not only those individuals. it is bad for our economy. we have to make sure that americans who have paid their debt to society can earn that second chance. emily: congress is considering legislation cutting sentences for nonviolent drug offenders. the