the paypal network is what i would call it.t probably started six to 12 months after the ebay acquisition. >> linkedin, tesla, youtube, yelp, yammer, and spacex. all founded by members of the paypal mafia. what was special about all of you? what did you have in common? >> paypal selected a lot of people who were young, and intense, and were entrepreneurial themselves. then they were bought by ebay. so all of these folks were like, what do i do next? some of them go to youtube, some go to spacex, some of them do yelp, i do linkedin. and yet, because we had this intense experience together, we all still have really tight networks. we are calling each other going, i'm thinking about doing this, what do you think? >> who do you call for what? >> macroeconomic bold models, i will call peter. the intersection of interesting business models or business technology, things like big data, i call max. or for a willingness to just think super big, with risk as not a variable, elon. >> what do they call you for? >> laughs. [laughter] >> i h

up next, more on paypal when i speak with former paypal president david marcus. he will also tell us about his new job, growing facebook's messaging services. ♪ >> welcome back to the best of "bloomberg west." i'm emily chang. former paypal president david marcus is settling into his new role as facebook vice president of messaging services. they have 500 million active users. i asked why he would leave a job as paypal president to become a vice president at facebook. here is what he told me about leaving the company. >> it is overrated because most of the things you do every day are not actually that much fun. that is the truth. that's what you do for a living. you get to a place where, you know, there is nowhere up to go. and as a result, you have a lot of social pressure to stay in the job and continue doing the things you do. but you know, if you're an entrepreneur like me, you'd rather go build things than manage things. that's why i couldn't resist the opportunity to go build something large at a scale of over 1 billion-plus people. i wasn't able to resist

i mean, ebay and paypal have had an interesting year.e other members of the paypal mafia think they are better apart. >> it was absolutely the right decision at the time. and we made it collaboratively. and part of the reason was because to really get to the right kind of level of mass of the payments transaction system, it required a much closer connection with ebay. now that it has gotten to a certain level, you can say, look, is it better inside or outside? one could make good arguments both ways. the argument with is, for example, actually, in fact, there is still a lot of density of value between ebay and paypal. on the other hand, the argument against it is to say well, actually, in fact, maybe paypal should become a bank. ebay is not a bank holding company. the natural evolution is to head there in some direction. and that's also possible with the right management team. >> it's time for another quick break. we will be right back. ♪ >> after you sold paypal, you could've retired a few times over probably. some other members of the

ebay and paypal have had interesting year. some members of the mafia thinks they're better apart. > the right decision at the time. we made it collaboratively. to really get to the right level payments transaction system, it required a much closer connection with ebay. ow that it's gotten to a certain level, they say, look, is it better inside or outside. you could make good arguments ways. the argument with, for example, density till a lot of of value between ebay and paypal. paypal should ct natural bank, but the evolution is to head there in some direction. that's also possible with team. r management >> time for a quick break. >> i think for paypal, you could over, tired a few times probably, some of the members or the paypal bought ferraris, you bought an acura, it's a nice kafr. going to lean i'm back. >> i was thinking of buying an audi sa. it's a nice car and so forth. a friend pitched by acura.e on the i would rather invest in the sa or the startup. what's the cheapest nice car i buy.d i would rather spend my money in

a partner in the paypal mafia. i spoke with hofmann and started by asking about paypal's looming split from eby a and if some of the paypal mafia members should return to the company. >> to be successful, a leader has to say i understand these are the kinds of things that have gotten us to success and that have worked so far, but this new thing, which could involve a lot of technical change or a lot of organizational change to get there, and you will not be successful without a founder to do that. >> i am surprised you have not met him yet. other members of the paypal mafia, i have heard the same from others. that they didn't get to meet him. >> it is a public company, because ebay is a public company, with the hiring process, so as soon as he could, he called me, and my schedule is also a little bit complicated, so we are having dinner in a few weeks. i'm sure my schedule is one of those complicated things. but he was talking to me about what the characteristics should be, what kind of person he should be looking

be interested in paypal?ntionedjoe m is that he is interested in alipay, because there is a lot of growth there. joe and his management team are very focused on that. he is looking at paypal as a reflection of what is going on with alipay. apple alibaba and potential partnership. we do not have apple ever being clear about the future, and here and they are both saying they would be open to a partnership. something ise going to happen there. like i think something is already happening. if you take the perspective the all about apple and what happened there last week. ,hey are continuing to boom despite what you hear from london here. pundits here. ofna is a huge portion apple's growth. million plus 300 people buying on their platform. anyone who was to sell in china will pay a lot of attention to alibaba. >> what does alibaba want out of hollywood? what does hollywood want out of alibaba? this is an e-commerce company, it marketplace really matters to them. they need to add liquidity every day to add value to

but next, the cofounder of linkedin and paypal. what should the e-commerce giant do next?e and only here, next on "bloomberg west." ♪ bloombergw for television on the markets. i am julie hyman. take a look at where stocks traded today after three straight weeks of gains for the major averages, and gaining once again on this monday, the s&p and the dow rising to a record, even though the gains were not that large, with corporate earnings, and economic data is what drove things higher. ♪ ♪ >> you are watching "bloomberg ont," where we focus innovation, technology, and the future of business. i am cory johnson. some of the biggest names gathered in the sun at half moon bay, and emily chang, my partner, is there with the best of the conference. what? you are shaking your head? no sun still? >> i am cold. yes, a great conference. we are having a wonderful time out here. a really interesting conversation yesterday from the original members of the paypal group. the ideological spectrum, and peter thiel more extreme. one of the interesting things they were talking about is a found

are you paypal will become more vulnerable?t will certainly be considered as an acquisition target. whether or not anything will happen will depend a little bit forhat the strategies are the acquiring companies and what the price point of a valuable asset is. are a lot of discharge is for an independent paypal that would then play a network effect across these companies and create a lot of value for the ecosystem. a good university plays out that way. of,s also a question innovating a google, or maybe there are complexities around alibaba, but if you integrated with another company, maybe something interesting would happen as well. if you want my adulation him a i have zero inside information, i would expect alibaba to be more likely to go after the marketplace first year he they first. information, but if i look at how they're trying to play in terms of the global market, that might be the first step. >> i wonder if twitter is a company where, we all know about that rusher is under. a lot of talk of management reshuffling. a p

. >> peter thiel, how is your company paypal zero to one? >> it was the first one to combine e-mail with money, a sort of breakthrough product idea and then it turned out that to make the product work you had to solve tricky fraud issues. so that people could transact in a way that was fast, easy, and secure and was definitely the first of its kind to move -- and a group very quickly and -- and it grew very quickly and it represented a real breakthrough. it is often, one measure i get for these companies are things where you have an order of magnitude improvement on some important dimension. amazon had more than 10 times as many books as the next biggest book store. paypal, the alternative was to send checks to these ebay power sellers which took 7-10 days. with paypal, you got the money through a much faster process. >> where did you come up with the idea of online payments? >> well, it is often not the -- not that you come up with the whole idea in a single, flash inspiration. i was interested in this question a digital currency, all of th

rund marcus left paypal to messaging products at facebook.efore the split of a paypal and ebay. what is he up to? emily chang will find out. they are neither -- they are at the techonomy conference. >> just got off stage, speaking with david marcus. he is kind enough to join us here outside. the last time we spoke we were at ebay headquarters a year ago, talking about paypal. you said some thing interesting when it came to why you made the decision to leave. you said being a ceo, public or private, is overrated. why do you feel that way? >> is overrated because most of the things you do every day are not that much fun. that's the truth. if that's you do for a living, you get to a place where there is nowhere up to go. as a result, you have a a lot of social pressure to stay in the job and continue doing the things you do. if you are an entrepreneur, you would rather go build things than manage things. that's why i couldn't resist the opportunity to go build something large, at the scale of one billion plus people. i wasn't able to resist that

at paypal itself, they are on the cusp of changing the world using payments. >> reporter: wu joined paypal last year. >> i was shocked. i was surprised. i felt like crying. >> reporter: like this one in las vegas, many of the tools paypal now uses to recruit the hundreds of technologists it needs. >> they get to learn more about our products and our company and we get to see what they are able to produce. >> reporter: to meet the needs of companies like paypal, the company needs to produce more technologists. the need is only expected to grow. the bureau of labor statics says from 2012 to 2022, 700,000 i.t. jobs will be added. >> we want to hire software engineers, product managers, we're looking for people who might have specialty in mobile engineering. >> reporter: chief technologist notes the market is increasingly competitive as paypal isn't alone in looking for talent. companies of all sizes across all industries needs technologists and that could put smaller companies at a disadvantage because they can't compete with the pay bigger companies can offer. the blf says i.t. jobs can pay

paypal as a payment source.hing that has made it harder for, i think, issuers to want to come into the space where paypal has competed they do have that greater convenience and the ability to authenticate. and that scale was needed to do so. but now whether it's apple pay, providing it from the os layer or google in terms of integrating with merchants on back end how buying key words and search traffic for marketplace players say, one click you can buy and here are store payment credentials, they have a number of changes how to integrate the solution. brain tree is one of them. notice that brain tree doesn't provide a lot of branding in terms of what the consumer sees. it not a question of whether or not brain tree owns the consumer, it's the demand chan that owns it. >> people are puzzled when all is said and done you pull the sell rating on unusually but took the price target down from 52 to 49. >> ebay's not an expensive stock in a lot of metrics. we're not trying to say this is going to happen tomorrow. but

we are heads-down, working on that. >> have to ask you about paypal.portive are you of paypal being spun off as a public company? is this the right decision? >> it deserves to be a standalone company. the big question is will it remain an independent company after it is spun off of ebay. >> paypal is not a partner with apple pay. how big a problem is that? >> braintree works with apple day, i do not think it is a big problem. >> you have been clear that whatsapp and messenger will be separate. can you envision a future where they are not? >> we don't spend a lot of time thinking about that. whatsapp is on the path to get to one billion monthly users. once they passed a half-billion mark, next up is one billion for us as well. we are approaching this in different ways. i think, thinking about rationalizing this right now would be a mistake. whatsapp is fairly independent. they are in mountain view, on campus. we are building different product experiences. i think some experiences will cater to some users, others to others. we will see how it plays out.

and electronic funds such as paypal and google. and back to al roker, a great person who happens to do a whole lot of weather. >> no kidding. >> if you're going to concede the floor to anyone, al roker is not a bad option. and christina loren. >> our show is just filled with dapper gentlemen for today. before we talk to al, i just want to put this on your radar. we want to make you a big part of this roker-thon. usual the #on twitter, and let him know we are rooting him on. speaking of which, let's talk to al roker right now. >> how are you doing? >> he doesn't hear me. can you hear me now? can you hear me now? >> it's live television. >> hello! >> roker, mr. roker, my favorite weatherman of all times. can you hear me? well, it's all right, they're working on it. he's talking to all the affiliates around the country, small markets like bakers fooba and in our area. we have more rain on the way for this morning, but the showers are light and spotty. let's see what's happening now in al roker's neck of the woods. flip the script on y

mark is aby asking little bit more about his position to leave paypal. why.said to me as being a ceo public or private is overrated. take a listen. >> most of the things you do are not actually that much fun. that is the truth. that is what you do for a living. you get to a place where there is nowhere up paired a lot of social pressure to stem a job and continue doing the things you do. if you are an entrepreneur like this -- like me, you would rather build and manage things. that is where i could not resist the opportunity to build something large. of overtime, one billion plus people. >> he told me he is now happier than he has ever been, even since ebay start -- decided to take -- to -- decided to spin off of paypal. where he wants to take facebook messenger, he wants to make messaging a destination, a place for richer and more fulfilling content. a big question is how they differentiate messenger from things like whatsapp, which remains a standalone project separate from facebook and all the other projects out there whether it is snapchat or e-mail or te

. >> reid hoffman, and am original member of the paypal mafia. people have been saying yesterday is is is the right time for paypal to become a newly public company as soon as it spins off from ebay? reid hoffman said it would be great if they did not have to stand up to the scrutiny of quarterly earnings reports, but on the other hand, it will be good for investors to get an idea of what those reports look like. i asked him will paypal be an acquisition target and if he is concerned about that. he said of course. companies like google and alibaba will be interested in taking a look at alibaba. but when it comes to alibaba, he thinks alibaba might be more interested in something else. >> if you want my speculation, have zero inside information. i think alibaba would be more likely to go after the marketplace first. >> what do you mean? >> ebay. and again, have zero information. but if i look at how they are trying to play in terms of the global market, that might be the first step. >> i thought that was interesting, that alibaba would be more int

certainly the experiences we had at paypal were incredibly formative. it was a crazy 3 1/2 years and you had just about every single challenge you could imagine. i think this is one of the reasons there's been this so-called paypal mafia in silicon valley of all these people who started all these companies like tesla, space ex. i was involved in reed hoffman, linked in, yelp, yammer, youtube, they were all started by ex-paypal people. the lesson learned at pay pal was it was hard but possible to build a great company. normally people learn a lesson that it's impossible because they're in a company that fails and they aim for something less ambitious the next time around or if you're in a super successful company like a microsoft or google, you will learn the lesson that it's easy, and the lesson that something is impossible or easy is an equally incorrect lesson because if it's impossible, there's no point in trying. if it's easy, there's no need to try. and so whether you think it's impossible or easy, either way you won't really try. >> and do you thi

paypal hadn't grown. but my understanding is what they are discontinuing is basically the online portal for merchants. if you have it as an app you can still use wit nfc technology. if you have a google mastercard enabled debit cards you can still use that. but it does seem to be admitting defeat at least in one part of this product that they were hoping would compete against paypal. and i'm wondering when you see an announcement like this that is primarily going to effect merchants and not consumers, what do you think this is this is saying google has lost ground to? >> it's saying nobody is using it. it didn't get traction. and it's been trying a the variety of executives and attempts and they have pt been able to make ground here. so they have given up. they declared victory and moved on. >> knowing what we know about droid market share versus apple, why would this happen? failure of execution? >> failure of the focus probably. they are doing 109 other things and this is an area they tried a variety of

we're doing that inside of paypal, apple pay. that will likely ride on much of the existing financial rails. i think there's new financial rails being built. we build some of those at paypal. bitcoin is an interesting one of those. so i don't think any of those are going to overtake the current financial system. i think a lot is going to be built on top of that. but interesting new alternatives coming in that are likely more prevalent over the coming years. >> what do you make of snap cash? that's this new snap chat sort of disappearing transfer system. >> you know, we have our product is person to person payments. we've been doing this for many years of blending mobile payments and socially $3 billion of that on an annualized basis. it's something we've been doing for a long time. it's exciting to see others coming into the space to familiarize consumers with more ways they can use their mobile device to pay. the more we have major players coming in, the more it helps to shift us from that, you know, less than 1% of payments on

digital payment providers, paypal and square, they are now extending loans.ns million to over 40,000 merchants over the past year. >> i love the story. it makes perfect sense and it would be so easy for them to get a good picture of what your sales are like. they are processing all of your sales, so they know how well you're doing. if you need a loan to boost growth, you can look at what they have done and yes, it is like a risk. usually, they charge 2% or 3%. 12 percent to give you alone. it makes a lot of sense. >> it is a murky industry. you have a lot of bad actors in the industry who are charging exorbitant fees. deckat profile called on bloomberg news we did last week. brokers and businesses who are desperately in need of cash. >> this does away with that. you're saying the loansharking industry is a murky industry and that is true. but this is not that. >> banks are very stringent now on the loan. >> we need to move onto number eight. global standards for airlines are set to be announced. airliners may soon have to automatically report their position a

matt is the head of global launch for paypal joins us at post nine.d morning to you. >> happy singles day. >> same to you. >> can you -- how do you leverage this if you're outside of china but not a chinese vendor? >> chinese consumers 240 to 290 million on-line, right, want ways to pay securely and safely and they pay often with china unipay card. what we're trying to do is help them pay and buy from merchants outside of china. 60 plus merchants we've partnered with to put up a portal where consumers can get deals, pay..wugigo.com. >> what does that mean? >> borderless. >> chinese consumers can buy from a baseball card seller in atlanta or a merchant in south korea or, you know, skiing is the biggest new sport in china and we've partnered with a company called base gear.com so you can get 25% off skiing equipment and they're located in beaverton, oregon. >> 60 merchants you said? >> 60 plus. >> is it more of a pilot than anything else or is it the beginning of something truly big? >> i mean, singles day is already huge, right. we heard from gill abou

. -- >> monday night on "the communicators," peter teel, cofounder of paypal. >> i would say the single overarching theme of my class and of the book "01" is people --uld rethink repetition competition. you perhaps you should not compete at all, and --a founder, at 9:00 p.m.ht eastern on "the communicators." >> each week, american history tv's real america brings you archival films that help to tell the story of the 20th century. henry ford's "mirror of america" offers a glimpse at life in the united states between 1914 and 1930. ford re-creates the film in 1914. 1960 three, the ford motor company donated over 5000 films to the national archives as a gift to the american people. the national archives produced this documentary that same year to show highlights of the ford collection. so many ways, henry ford was a simple man. he liked to go camping with his friends. that is thomas edison behind him. he enjoyed old-time country dancing. naturalist.ith the grandchildren.s together. a garden his first that is his wife. it began with an idea that most people thought would not work, but he ma

it's clear that it's really paypal's bills to lose. they are the legacy player with online payments and as things go mobile they are not necessarily going to be as big as they were on the desk top. so i don't think it is a terrible call but i think it's too early for anyone to be pounding their fist on the table. >> ken sera is dramatically reducing his price target in this call as well from 52 to 49. who wants to take that one. >> i think with ebay there are some real questions about around their business. i agree with this one more than the others. look at the people. they agree for certain. 85 to 15. >> you can make a fundamental case for why ebay doesn't need to exist anymore. i'm not long or short but i can side with this. >> maybe look at it when it closer to the official spin. >> the question is between now and when they spin what else takes place. does anyone want to own paypal the baba pay is competing with a apple pay and a new google product. >> it's going to be really tough to execute. >> we like ken but it makes me laugh w

. >> what our paypal's plans for making real money?of the transactions, all of these payments are for free. you can pay your friend money -- >> and once you have it in your wallet you can send it to your bank and cash it out. and their strategy is basically to extend the universe in which you can use it. in that mobile universe where you are hopping your phone to different apps, they want you to be able to pay for your uber or venmo. with pitch is the e merchant will pay for this -- is that eventually the merchant will pay one for this. you do not have to reenter the information on your phone every time. spent some time at a big group's conference yesterday. by paypal. attended this is an old-school banker group. they have finally woken up and andl the threat of apps things like bitcoin. you thaturprise they are racing to try to cover this? >> text messages, we would hear about people in europe sending text messages, and then here in the united eights all of the sun and it happened. but right now it sounds a little but for them, why wo

my fear, though, is if i wire money to wiki leaks or use paypal, i will end up on a government was somewhere. or even worse, if at some point wiki leaks is formally decreed to be a terrorist organization i could be subjected to liability, criminal liability for materially supporting a terrorist group. these are not people prone to weird conspiracies that you hear from occasionally. these are very sober, rational americans. the reason i found that striking is because these were american citizens who were petrified of exercising their core first amendment constitutional right, which is what donating money to an organization or political causes. they were petrified they would be punished if they exercised those rights. what made it more remarkable is wiki leaks was an organization, is still an organization that has never been charged with little loan convicted of any crime. yet here we are with all kinds of people voluntarily relinquishing their own rights at all fear the government would abuse its power and punish them for exercising the right the constitution guaranteed. the reason i found th

space x, which grew out of the paypal fortune is always reaching for the heavens. private space race is robust. >> come on, guys, let's brainstorm this puppy. >> reporter: and as noted in the movie "the internship," google seems fearless about expanding, developing driverless cars and wearable computers, high-speed internet fiber, working on a pill to hunt cancer cells and launching a program to wire the world with balloons. >> because it turns out that if you use balloons, it's faster and easier and cheaper. >> reporter: it is not clear how deeply google wants to jump into all of this but the acquisition of this property sets them up to look skyward. and why not, maybe it's like the old bond film, the world is not enough. >> the world is not enough. pierce bronson reference. >> that's more than you and i make together. >> tom foreman, thank you so much. appreciate it. >>> billions of dollars were at stake in one of the most expensive did expensiex pensive divorce cases ever. he was ordered to pay his ex-wife $995 million. by the end of the year, she will collect a

. >> monday night, peter teel, cofounder of a powell and paypal and of palantir. >> people should rethink competition. most business books tell you how to compete more effectively. mind tells you that perhaps you should not compete atll

as a result of that, you now see ebay splitting off paypal. you see apple creating apple pay. >> that say good thing for you? >> i think that's positive, because those companies obviously recognize that there's going to be a big winner and winners that are going to replace cash as a method of payment. starbucks is -- >> replace, not -- >> replace. at some point in time, we are going to be much more significantly driven to mobile pay and it is going to be a diminimus level of cash being used as a currency, over time. what i would say is that we will be at the middle of many of these conversations going forward in which starbucks will have a significant role to play. >> what does that mean? >> it means that starbucks as a coffee company will be able to leverage the equity of our brand and our mobile payment platform to participate in how people are going to pay for goods and services both inside our stores and possibly outside. >> so let me ask you this again. possibly outside, you're the one who said the big question is who will be the next vis

now you have apple pay, google wallet, paypal, bitcoin.ow do you see the digital payments and mobile payments race? >> this is a big thing. the system has not changed in 20 years. this is another area where there will be more change in the next five years than there were in the previous 20. there are two big drivers. one is apple pay. and the other is bitcoin. apple pay is the thing that is freaking out all the financial services companies. apple showing up to the party and saying we will now be in the center of payments has caused a collective heart attack. there are payments companies that are aligned with apple that are like, "yeah, we figured it out." there are payment companies that are not, that are having a stroke in real time trying to figure out the implications of apple pay. they figure google will respond to apple pay with a google pay that will work the same way with android. >> google wallet has not worked out. why didn't it, and how optimistic are you that apple can get it right? >> this is what is interesting about apple pay