tv Bloomberg West Bloomberg April 17, 2015 1:00pm-2:01pm EDT
also, -- how do you intend to do so? and also if you have the support of president obama, how about sending drones? concerning russia do you think -- did you get any specific commitment to renew sanctions in russia? pm renzi: let me talk to about the question on libya. i will repeat what i said. obviously, all the countries in this region are countries that are interested in looking for and finding a solution, barring none. we appreciate the work that certain countries are finally doing in the mediterranean area, northern africa starting with
egypt. all the countries are part of this huge undertaking, but please allow me to be very clear . either the tribes do this, or no one is going to do this. the only way to reach peace is for the tribes to accept that they are going toward stabilization and peace. and our work is that of looking for this to favor this at all levels so that this effort does indeed lead to peace. the diplomatic initiatives you are aware of are the ones we are doing and the once the foreign ministers are also trying to support and study. obviously, this is not a job that starts in libya. i would like my italian journalist friends to understand that libya, which we consider
because they are a cross from us, they are the main problem, but they are part of a more complex problem that has to do with the risk of terrorist infiltration'ss in africa. we are feeling the pain for what happened at the university of greece in kenya. -- the university in kenya. but this regards africa as a whole continent. a few days ago, we remembered that a year has gone by from when someone hundred girls were kidnapped by boko haram -- some 100 girls were kidnapped by boko haram. remember the hashtag bring back our girls. this is something we have to place in a wider context.
the technical solutions our teams are looking at them every single day, and they are obviously technical solutions for which there is a full awareness. europe is next to the united states and a huge challenge that will lead troops to spend much more time in afghanistan than we thought. if the coalition with the united states considers that the process has to continue, then italy will do its part. obviously, in terms of the technical solutions that i mentioned, this is not something that has to do with political debates. it has to do with technical teams and their expertise. i have to be sure that i have priority and assurance from the united states that this is not something where italy is working
on its own. i can tell you that as far as we are concerned, the cooperation and work together with you both in a national diplomatic way and is a constant work done every single day which is a job that is done silently, quietly, in everyday life, which takes us to heroism. i am thinking about the coast guard's, the men and women that saved those people at sea, that allowed a young woman to give birth on the boat. she was dying and they saved two lives. this is what we want to do, but at the same time, we also have to be fully aware of the fact that the work we do together is a job that not only involves libya and africa, but i might say the whole world. allow me to say this without taking the floor for too long but this is a job we are doing everywhere from russia to latin america, afghanistan to the
middle east. the cooperation and work which is done between the united states and italy is something out of discussion that cannot be discussed. president obama: we are consistently looking at where terrorist threats might emanate and libya, obviously, is an area of great concern. isis has been very explicit about wanting to use the chaos inside libya as a potential justification for putting some of their personnel there. the coordination with italy and with other of our key partners is going to be very important. we will not be able to solve the problem just with a few drone strikes or a few military operations. you have a country that has been broken into a number of tribal factions.
there are some sectarian elements to it and you don't have a central government that is functioning effectively. so we still have to guard against the use of the territories in libya as a safe haven for terrorist operations much in the way we have done with respect to somalia for many years. but the answer ultimately, is to have a government that can control its own borders and work with us. that is going to take some time but we will combine counterterrorism efforts in cooperation with italy and other like-minded nations with a political effort and we are going to have to encourage some of the other countries inside
the gulf who have influence over the various factions inside of libya to be more cooperative themselves. in some cases, you have seen them fan the flames of military conflict rather than try to reduce them. with respect to russia, matteo and i agree that we need the implementation of minsk. i have expressed my strong belief that the european council needs to continue the current sanctions that are in place until we have seen full implementation of the minsk agreement. there will be a vote coming up this summer in the european council and my expectation is that not only italy, but all countries in europe will recognize that it would be a wrong message to send to reduce
sanctions pressure on russia when their key implementation steps don't happen until the end of the year. at minimum, we have to maintain the existing sanction levels until we have seen that they have carried out the steps they are required to under the agreement. one of the things matteo and i share and i think the italian and american people share is a sense of values and principles that sometimes overrides political expediency. that is part of our dna. that is part of our memories because of the history of both of our countries. i think we have to be realistic and practical in how we look at a problem like ukraine but we
have to also recall that the reason there is a unified and prosperous europe is because in norma's sacrifices were made on behalf of ideals and principles. -- in norma' enormous sacrifices were made on behalf of ideals and principles. if those principles and ideals start getting ignored, that carries a cost for europe and for the world. thank you very much. thank you, everybody. >> president obama and italian prime minister matteo renzi holding a press conference where they reviewed everything from policy in libya, concerns over illegal migrants to europe concerns about greece and the eurozone, to international trade, perhaps the number one
item on the agenda. matt: of course, that was the number one question. what does president obama think of his chances of getting a trade bill? having nothing to do with his initial remarks, but of course, that is where the focus is. i thought it was interesting that he is pushing democrats, who he knows normally don't go along very well with these kinds of bigger free-trade initiatives , because he says it will actually be better for the working class families of america, which is exactly the concern that chuck schumer, for example, has voiced. adam: he did reassure democrats that there would be protection of human rights. he said that the skepticism and misunderstandings are understandable. this is a ball -- i wouldn't say bold --
matt: it's hard to see how much protection for labor rights there would be. erik: it's hard to see how democrats could support this. matt: exactly. we push it back now to delayed coverage of "bloomberg west." emily chang we don't to take up any more of your time. emily: thank you. consumer confidence is at its highest level in more than eight years. at the same time, inflation is picking up. the cost of living, not including food or energy rose .2% in march, the third straight month of gains. fed officials are saying take it slow. lockhart says raising rates in june is not his preference although the option isn't off
the table, and the boston president says economic data would need to keep improving before pulling the trigger. all that, the forecast is that the fed will wait until september to make a move. i deal with 11 nations is not getting support from the presidents own party. some democrats say it would cost jobs. chuck schumer: all evidence i have seen is that this hurts middle-class incomes. i can't before it in that regard. emily: president obama says the transpacific partnership would protect american jobs and open markets for u.s. companies. the ceo of airbus is defending pilots in the cockpit even after the deliberate crash of an a320 in the french alps last month. he says pilots should not be
replaced by fully automated systems because they make flying safer. he says even when it is technically possible to take a human out of the cockpit, that step should not be taken. the international space station got a coffee upgrade. a spaceship arrived today with more than 4000 pounds of supplies, including the world's first espresso machine designed for space. astronauts used giant robotic arms to capture the capsule. in the meantime spacex released this new video of the rocket that helped bring that capsule. the booster can be seen landing on a platform then tipping over in flames. we will be back with more.
as ibm races to move its business to the cloud, can it keep up with younger, nimbler startups? charlie rose -- excuse me. corey. we are having a little bit of a prompter issue. now, we are going to have our lead story of the day. the video service run by vessel just raised $58 million to fund its new subscription business for short form video. according to a person with knowledge of the matter it has a total funding of 134 million dollars. here is the crazy thing. in october, stewart butterfield told "the wall street journal" that he was raising money not because he needed it but because the company was when demand for investors. in fact, it would take 60 years to burn through the $120 million
he had at that time. today, he told "the new york times" that he felt he had a fiduciary responsibility to take the money if it was offered on favorable terms. should companies take as much money as they are offered? it's a question that was pondered on the most recent episode of "silicon valley." take a listen. >> i was thinking, actually, what if you had asked for less? >> less? >> what if you had gone to someone and asked for less than they offered in the first round? >> well, then i wouldn't have had to settle for acquisition. all that money would have been for me.
emily: so, does that really happen? would a company ever take less money by choice? tom, the situation is that an entrepreneur went through as disastrous down round and ended up having to take more money at a lower valuation lost the momentum and had to reassess. would that ever happen? >> sometimes. if her some reason there is an issue with the business where they can't -- if for some reason there is an issue with the business where they can't convince investors that the business is more valuable now than it was in the past. corey: we are going to see down rounds. there is no way that these very small businesses -- if some of
these companies are going to do down rounds or we are going to have something like fab.com. emily: or they may sell for less than they were initially worth. corey: that is a down round. tom: it's healthy in the ecosystem to have lots of potential and some down rounds. emily: how often would you see someone like richard hendrix saying, actually, i want to take your money, but can you give me less and do it at a lower valuation? tom: it's pretty rare. our structure is such that basically a handful of winners need to pay for all of the companies that don't generate revenue. so a venture investor really wants to go long ball. we want to encourage companies
to grow aggressively and quickly. the only time he would be in a position to give a smaller amount of money is when you are trying to support a company just for a relationship. emily: so what is your take on vessel or slack? this might be the fastest growing start up of all time if you're just looking at the valuation number alone. tom: i think it's really exciting. these companies are growing really fast. they are potentially really disruptive. that's a phenomenal positive attribute of the environment. i think the questions about the environment are, there is three times as much capital being invested live -- being invested by ventures. we ran an analysis that red point and found that there are about 211 ipo sized private
financings last year. a used to be you had the same number of ipos and private financings. now you have about 16 times the number of private financings. corey: i think part of it is the complete collapse of the growth banks. all those firms are gone. those are the firms that used to do 100 million dollar ipos, $50 million ipos and help companies launch at that point. those firms are gone. the trading banks are gone. with that business gone, there is no way for companies to go public at the earlier stage. tom: that's right. and there is a further complication. emily: you call it a runaway train. should companies not be raising so much? tom: companies should be raising capital.
when he said it was his fiduciary responsibility to take this capital, he was right. it's a financing event that has very little dilution to his employees and other stakeholders, so i think he is exactly right. emily: how concerned are you that financings are getting so high that they are untenable? tom: there are a lot of positive forces and a lot of negative forces. a thing on the whole we will see an unbelievable exit environment in the next couple of years. we will see a lot of great businesses being built, but we will also see a lot fallout. corey: when you have more experienced founders, they will think about the subsequent issues. they will delude themselves more because they -- dilute themselves more because they are thinking about their employees. we need our software engineers
to think they are going to get rich working here. how do they hire their next head of software when there might not be a lot of room to grow after $30 billion? tom: there's compensation inflation, particularly in the valley. salaries have increased by 50% in the last 18 months. corey hole in that's -- corey: that's huge. tom: i think it's partly because of increased competition because of the number of companies raising capital, and two, there is much more demand for these employees. there is a component that the equity parts of these compensation packages are nearly as attractive as they would be at a substantially lower compensation. emily: how often do you hear people just saying, that is expensive. it's so much. tom: how many times per day? emily: is that the trend?
everything is so expensive. a lot of investors are not investing right now because everything costs so much. tom: we talk about a risk bubble. when i joined in 2008, the median price we would pay was somewhere between 10-15. corey: million dollars. tom: yes, and we would put in 3-5 and by around 10-15. now we consistently see valuations around 80-100,000,000. -- $80 million-$100 million. emily: are there startups out there that you think are just overvalued? tom: it's all a question of how much risk and investor wants to take.
if you have an ipo phenomenon like you had in 2000, there could be a problem. corey: that's one of the big differences to me. not only do you have later rounds of valuations, you have traditional stock market investors like fidelity, t. rowe price, hedge funds, coming in and buying big stakes or smaller stakes in some of these companies at huge valuations, presumably waiting for an ipo. they are not looking to fill their coffers as investors or long-term holders. tom: that is why i challenge of these prices are reasonable. it's hard to take the same lesson. corey: we sometimes get information about price. we don't get information about terms.
essentially, the size of the business or the cost is guaranteed in the size of the investment percentagewise, gets bigger. tom: two of the last rounds we've had have had structure to guarantee that. corey: that's kind of amazing. who is getting crammed out? is it the employees? tom: it depends on the terms. by and large, it's the employees. corey: think about that. the last investor comes in. employees have stayed for five or eight years at a substandard salary thinking they were building equity and the last investor comes in saying promise i won't lose anything and the original employee gets squeezed. tom: that hasn't really happened. if you look at the pops in ipo -- corey: except for the insiders
who can't sell them. emily: we could go on and on. it's a fascinating question that a lot of people are talking about. what exactly is going on in silicon valley? thank you for joining us. as ibm raises to bring its business to the cloud, can it keep up with younger, number startups? charlie rose sat down. take a listen. >> one of the things i was taught with this great company was don't ever protect your past. last year, we do vested $7 billion in businesses. i have to add, they were also negative profit. if you keep moving to higher value -- and it's not just in a shareholders mind. that's a we do for people. we continue to bring them the next thing. you have to move out of some
businesses and move into new businesses. that decline is in large part by decline. $7 billion is a big number. we are 93 billion dollars but $7 billion is a big number. charlie: you have to transform on multiple layers. >> i believe that everyone in this job -- it is a challenge for everyone. all my colleagues say the same thing. but there something interesting about this moment in time and at any company you run. technology has to shift and you move onto to the next era. when ibm was doing main systems, the pc came along. people thought that would be the end. then the internet. we took that an made it real for the enterprise, and now we are on the next set of trends. here is what different. there are three technology trends at once. why the world feels different? there is a reason.
its intent -- it's intense. we have the advent of data, the cloud and mobility. the underscoring of security and the importance of it. three things going on at once will reorder industry. it will reorder yours also. will every business -- it will reorder every business. it will make a change in how you operate. that is what makes it different at this moment time. i will add in currency and macroeconomics and other geopolitical things. emily: what did you think of her remarks? cory: cory johnson, editor at large believes that ibm is going through a tough time. they have been trying to use the find -- financial engineering accounting tricks to support the earnings-per-share. but their businesses having a lot of trouble. they've spent billions on
acquisitions, and revenues continue to decline. if you look at revenue declines they haven't seen revenue growth in two years. now she says it's by design. sort of. not looking at numbers, more than three years a revenue declines were flat revenues. she says it's by design. what i would say it she would like to see revenues going up not down. if you look in earnings, forget earnings-per-share. if you look at actual profits those are also in a consistent and steady, and alarming decline. falling profits, falling sales, ibm is in a really tough spot. emily: what about the areas like health care? we talked to the head of watson health. she calls health care, ibm's moonshot. is that realistic? cory: in many businesses, health care is a wonderful space. ibm likes to talk about watson. they go to every major businesses that you have to buy a watson.
at the same time, amazon web service is out there saying you don't have to buy anything, you can rent it. ibm is getting into the cloud business. they are almost finding with themselves saying don't buy it rented, but please buy it. the rest of the market essay even have it on the cloud, you don't need to buy it. and we will get you the latest and greatest. you're not stuck with the three-year-old watson. there are fundamental changes and enterprise technology that are scary for ibm and you can see it in the numbers. emily: cory johnson speaking about ibm's ceo on the charlie rose. you can watch that full interview on charlie rose tonight at seven or content of rpm time right here on bloomberg television. let's get a check now the bloomberg top headlines. president obama held a news conference with italian prime minister today. he said greece needs to initiate reforms and greece must respect a framework agreement. they address the growing terror
threat from libya, which resident obama calls area of great concern for the united states. the international monetary fund may be its long-held view that the end is overvalued. -- the yen is overvalued. the asia-pacific department says there has been a significant appreciation of the currency in real terms are in the -- real terms. the yen has risen more than any other currency. this comes with talks about adding it to the list of world reserve currencies. a major united nations deal later this year limiting fossil fuel emissions. the heads of 43 companies, including dow chemical and unilever have called for swift action on climate change. in an open letter, they are promising to move their own businesses towards a low-carb economy. verizon is slimming down its
packages in an effort to keep customers. they will advertise custom packages starting at $55 they give viewers a choice of channels. the move is meant to fend off streaming services. there are reports that the famed canadian cirque du soleil is being on the verge of being pulled. a founder may sell most of his stakes. the new owners reportedly want to expand cirque du soleil's global operations. curiosity may have killed the cat, but it could also make your career. brian greater argues that curiosity has been a key to his success. cory johnson is here with more on that. cory: the man behind classic films has been hosting a biweekly curiosity conversation with people whom he admires.
the joint assault, steve jobs $.50, hundreds more. he shares it all in his new book. i'm psyched to have a conversation with the right now. i'm so interested in this idea of what makes for curiosity, and what it gives you. particularly in a realm what we are more engaged through technology texting, social media. you sit down across from someone to talk, talk to me about what you get out of that, how that works? guest: i've been watching your show for the last half hour, you are in san francisco and it involves technology. ivan the movie business with the storytelling business, and everything is a story. whether it is your previous interview, which i watched i thought was great, or as a narrative like empire, or any show that i'm producing, there is a story involved. stories get created, i think, out of curiosity.
even apple, computers has a story that drives it. there is a story that's part of his legacy. i do these one-on-one meetings, i've done them for over 30 years, every two weeks. with no agenda and no ask. i will, every two weeks, meet someone who was in a sprint in science, medicine, technology religion, all our forms very i do it for my own edification, to expand my world. for 20 years i never told anybody, except for the person i was trying to meet. it's just to enlarge in my world , so i can curate my life or story better. in order to create or find more original stories instead of living in your bubble, you want to get outside and learn more. the book itself can teach you immediately how to put that to action and expanded your life emotionally, intellectually, or just your relationships that are running around you.
cory: one of the buzzwords in silicon valley as people talking about the conversation. we want to continue the conversation. but it's never a conversation it's throwing something wall -- against the wall and walking away. what do you think happens in a conversation that doesn't happen when you are on facebook or texting? guest: i think -- the internet is the most fantastic tool in the world. in a conversation there is a question and answer. between the question-and-answer there might be an hour of conversation. in that conversation there are possibilities for disappointment. you read more information, you create a connection with somebody based on that information. by the nuance, body language. your best date you ever had didn't come between you and your computer, a came between you and
somebody else. if you are a guy -- i won't make any judgment. but your best date comes from that interaction the becomes biochemical. it changes your molecular structure. which doesn't really happened between you and your iphone. i think they work so well together, but you learn -- i think you learn different information when you are having a conversation. beyond that, you are creating intimacy with somebody creating chemistry between somebody that you are with, whether it's in the tech business or any business, or with your kid. my kid completely turns off at 15 years old by asking the generic question. not until i really asked him the specifics, where something builds between us do something actually connect and i get real answers. that happens far beyond. emily: -- cory: the people who
actually think about the answer they give you, particularly when the format is a journalist asking some executive or something to get actual thought about the question is hard to get to. do you find that the format in which you have these discussions and forms how the discussion is going to go? guest: i think, given that i've done this for 30 years and i have interviewed thousands of people, i'm pretty much wrong every time. every judgment that i make is entering into a conversation. i'm almost wrong every time. it changes either the person is more generous or less -- i just never been right. when i met an architect, i didn't even want to meet an architect. i thought there was an absence of humanity in that art form itself.
the minute i met him, he said do you know what architecture is? it's like a living organism. immediately my prejudice was dispelled. it went on from there, and i learned a lot. he might've learned some things himself because of this exchange conversation we had with one another. cory: he has been a guest here and a great interview. a beautiful idea from the author of "a curious mind." brian grazer thank you. emily: coming up, the unusual way the richest families choose to spend their cash. later, a firsthand account of the development for apple watch. that's coming up on "bloomberg west." ♪
nearly $30 billion. his team of personnel management includes x bankers, former navy seals, and an archivist. a new generation of tech billionaires is taking their office in a different direction. margaret collins joins a now from new york with more. first this sounds insane. what can you tell us about it? margaret: what we found out is their office has at least 47 people working for it. and they range from people who help serve him on a day-to-day basis, with his physical security, a yacht captain, a photographer and archivist, two people who were on his investment management team, that includes the cio, cfo accountants, portfolio managers and financial analysts. emily: how are you getting this information about the office?
margaret: some of it comes from department of labor filings. the company has a 401(k) for people who work there, as well as linkedin profiles of people we talked to. emily: how to tech billionaires run their family offices differently than other billionaires. ? margaret: family offices have existed for more than a century, many serving families in their feather six generation. what is different with tech billionaires and people with silicon valley who have had liquidations of wealth early in their career is that they are very focused on philanthropy and impact investing. many of them are hiring people who, for example, are doing direct deals in early venture companies that can provide a financial return and do good, or that they hope will cap both of those things. emily: how big can these family office teams get? margaret: paul allen formerly of microsoft has a team of more than 500 people. those people have an in-house
media company they are workingtechnology, and again, he has a robust investment management team as well. some family offices out there have hundreds of people working for them, their job centers essentially. emily: i mention they take extreme measures to keep these kind of things private. how do they recruit people to work for them? is it word-of-mouth? how do they advertise if they have positions available? margaret: what we found is there is an underground world that services family offices in terms of the consulting and trying to find people that they want to hire for these jobs. they do intentionally named themselves most of the time in a way that is not easy to me the connection between the billionaire and the people working at the firm. their consulting agencies that are helping people quietly find some of the best talent around, whether it be former navy seals who can provide physical security, background checks
travel arrangements for the family to some of the top investment professionals who have worked at mobile banks. -- global banks. emily: margaret collins, especially as more and more money in silicon valley piles up, thank you for joining us. we are just a few minutes away from "bottom line," with mark crumpton. mark joining us with a preview. mark: emily, thank you. economic investment group is a think tank. they're looking for bipartisan solutions in a very partisan atmosphere in washington. they are out with their first report today, its first white paper on the state of the u.s. economy. the findings indicate that for all of the headlines showing economic strength, there is still a lot to do in terms of generating highways jobs and helping distressed communities get back on their feet. the chairman is a former federal
reserve economist, and mitt romney's economic policy adviser during the 2012 economic campaign. he will join me when i see with the top of the hour. emily, back to you in san francisco. emily: mark, thank you. coming up, the challenges of developing for apple watch. how the early developers had to start from scratch. ♪
emily: "bloomberg west," this is "bloomberg west," -- this is "bloomberg west," i'm emily chang. companies like target and american airlines have had access to the apple watch for a long time. what were some of the challenges of developing an app on a completely new platform? cory johnson has more on that. cory: i'm joined by alexander a
mobile developer. it's a fascinating company, but development for a watch, what's that like? guest: it was challenging. we have been doing wearables for quite some time now. starting the pebble, the android where, and a few others. this watch was a continuation of the work. it came with its own set of challenges. cory: you have some experience is with the formfactor, thinking about how people use it. but i wonder, specifically writing for apple's device. the software is different than other apple software. guest: it's a complete with way of doing things. apple has been providing great tools, and has been helping us through this process. with tools and documentation and
good responsiveness for the developer radiations -- relations people. cory: there was a lot of other capabilities that were considered with the watch that didn't ship with a watch. where you thinking about ways to use those things? there's a heart rate monitor, if they choose to go that way. guest: we were considering it. i think apple is focusing on the core functionality of this point. for us, the quote unquote limited capabilities have helped us focus our energy towards really the core of what users will want and use this for. cory: walking away from some of things you might've done, what you decide not to do? guest: it was analyzing the formfactor, and figuring out what we really want. a runner, a cyclist, what do we want them to do with this watch? it's about giving them the data
and information they really needed the moment they're looking at it. it's really about focusing on the minimal amount of data. cory: have you seemed in that other developers have done on the watch? things that look clever to you? guest: good question. we saw over --uber do some nice things with a watch, raising your wrist and being able to call an uber right there. that's nice. everyone is playing with the idea, try to figure out what we want to do. i think the first version of the applications will be interesting. it's going to be an iterative process. cory: was it easier to want -- to write for this than others? guest: i wouldn't say it's easier on her. they all have their own intricacies and ways of doing things. the watch is a fairly big departure from the regular ios, but overall, it's a very simple
thing. cory: a lot of companies are deciding whether they're going to develop the small platform or not. if the watch is a flop, a lot of resources devoted to this. why did you guys decide to be there right out of the gate? guest: it's a great formfactor. we have always tried to get the athletes the information they want when they need it. i think the watch is really core and provides this experience that allows the user, the runner, to just look at the watch very quickly, to pause start, redo -- resume activity. i think it's a great experience. cory: cool stuff, we appreciate it. emily: thanks for being here. now it's time for the bwest byte one number that tells a whole lot. when you got for us for the friday bite? emily: i love friday bites. cory: 39 the number of
essential services facebook will offer to internet.org users. mark zuckerberg says internet.org might not be good for local operators. take a listen. zuckerberg: you offer a little bit of the internet for free, and more people start using data and more people access the internet and can use these tools. but also more people start paying for data. once they understand what they would use the internet for people understand what they would want to pay for data. is operators make more money. it ends up being more profitable. they can take that money and reinvest to build infrastructure for everyone. cory: so, this is a collocated story. emily: we don't have enough time to talk about it, but a few companies have pulled out of internet.org because they say it enters lines -- undermines the neutrality. mark zuckerberg says some conductivity is better than none. they will face challenges going forward.
>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." the intersection of business and economics with a main street perspective. to our viewers in the united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this friday. julie hyman looks at the latest retail team up and phil mattingly has late