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tv   Bloomberg West  Bloomberg  November 11, 2015 11:00pm-12:01am EST

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angie: it is noon in hong kong. jumped almostlar four times what was forecast. growth in services is helping offset losses. antos is a big loser today, shares falling the most in three decades after rescue plans came up short. the institutional part of the share offer fell short of expectations. , interest rates
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were unchanged for a fifth straight month. not unexpected. it was forecast by all 18 economists we survey. the korean economy has been growing at its fastest pace in more than five years. hong kong and china are at lunch, but the shanghai composite is heading for its biggest loss since the start of the month. this is the picture in singapore , tokyo, and sydney. stocks in japan and australia are a bright spot, but singapore down .7%. i will be back in half an hour. time now for bloomberg west. ♪
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cory: i am cory johnson, and you are watching "bloomberg west." coming up, emily sits down with jack ma to talk competing with amazon. is bigger really better? sam grobart reviews the new ipad pro and whether it will be a good fit for business. with rising costs and shrieking tax credits, is the sun ready to set on solar city? first, single day has become the largest online shopping day in the world. no one knows that better than jack ma. the e-commerce giant posted record-breaking sales of $14 billion today, 54% higher than last year. toly chang sat down with ma discuss the significance of single day. >> this is a unique day. all thethat we want
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manufacturers and shop owners to be thankful. we want consumers to have a wonderful day. , maybe not a big difference. for the event itself, the meaning of it is getting such great excitement in china. emily: you want this to be a global holiday in that you want 50% of revenue to come from international. what is the timeline? >> everything we do, we have a 10 year plan. in 2003 and 2004 for alipay. we judge how much we should do to realize our dream in 10 years. our plan is that, in 10 years, we will reach 50% of revenue from outside china. emily: you and i last spoke on ipo day.
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it has been a roller coaster for the stocks. it is barely above the ipo price. how do you explain this love-hate relationship investors have with alibaba? >> they love me, they hate me. but we love them. right? you cannot stop people hating you. we cannot take care of the stock price in that way. we have to take care of the results, the customers, the performance. because people do not like china's economy, they hate us. that is fine. that wants tony last 50, 60 years. you said today the chinese economy faces a bumpy ride. many internet companies will fail. what are you concerned about?
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chinaare concerned about month -- china's economy being good does not mean your economy is that. -- bad. think it is an opportunity for us, when everybody is worried about china's economy, we think it is an opportunity. worrying does not solve a problem. we have been worried for so many years. emily: when you say many internet companies will fail -- >> many companies have failed and will fail in the future. if they do not change themselves for future needs of the internet , the consumers have changed so fast, so quickly.
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it is almost difficult, impossible, to keep yesterday's wonderful life. we say, 10 years ago, who had the most in -- successful internet company in the world? ncent. the baidu, te i do not know if they would be like this in 10 years. emily: are we in able? >> -- a bubble? >> no. every year, we call it a bubble. there are investors who are saying they are skeptical of alibaba.shorting concerned about accounting. what do you say to that? >> that is their right. if they believe what they do,
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they should continue to do it. we cannot comment on their strategy. people like you, i cannot make everybody like us. we do things we believe right. we do the things the company believes is right. d, wesaid when we ipo' cannot promise to make everyone happy. philosophy. we have been saying for the past 10 years, people like it, people do not like it, that is their right. emily: the united states is your biggest potential market. you are opening an office in new york. you have visited several times over the last year. what does alibaba in the united states look like in five years? >> i would say we are very thankful for the united states.
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seattle was my dream in 1995. thought american tourists would come to my city. i would have to learn to speak english. people say, when is alibaba coming to america? when are you going to compete with amazon and ebay? we do not go there to compete. if we go there, we want to help the small business in china, help them to asia. forave such a huge demand chinese consumers online. more than 120 million people on mobile phones. we need good products, unique products. the u.s. has huge potential. , i want our team to be thankful to invest in
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technology, on startups in the state helping them to grow. money but help money come into china. emily: but amazon is also going global. they are focusing on india. you are focusing on russia, for example. went to the world's biggest e-commerce companies collide? >> amazon and alibaba have a pretty different model. we are a platform. have bigte, we business, small business. we believe every company can be amazon. amazon is a great apple. we are an apple tree. buy and sell using our cloud computing, our logistics system, our payment system. we want to enable every company
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to be e-commerce. we are not an e-commerce company. i do not think amazon and us will compete. we want people to have the success of amazon. emily: you just bought basically the youtube of china. you have been visiting hollywood. are we going to see you buy more content to deliver to a chinese audience? will you buy a u.s. studio? >> i do not think they want to sell. you can not buy anything in the world. emily: would you like to? >> no. if they need us, we can really work together. cory: dallas emily chang and jack ma. going to bring in gordon chang.
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what is your take on singles they? -- day? you had an interesting piece online. >> there are a couple of real problems. ,hen you look at singles day 54% increase. cory: big numbers. >> much bigger than cyber monday. but a lot of online retailers on alibaba's platforms really just a cumulative sales for one day. that helps them in the rankings on alibaba. it is more important to look year-to-year. there is a distortion caused. cory: the gross market value for the full year? >> because there is too much mania surrounding one day. we do not know what one percentage of the year sales is
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booked on one day. cory: single day sales did not actually happen in a day? they happened over days or weeks? >> right. online retailers do this because it helps their rankings on alibaba. they used to print sales, have uy and return stuff to increase rankings. is completelyday fake? things being bought and returned right afterwards, but the numbers promote the company? >> absolutely. , butser problem this year the problems they have not sold our counterfeiters. issue.ll be an the other issue alibaba has not solved is a complaint by of industrytment
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and commerce alleging strong-armed taxes -- tactics. have been telling retailers, you cannot sell through that is illegal in china. somethinging to be will not give up. they are well-managed and probably have a better strategy. although alibaba looks bigger than jd, they are a thorn in jack ma's side. they will not go away. are you saying singles day is a fake? isst: what we are seeing china sales migrating from bricks and mortar's locations to online. that will continue. the problem for jack ma is that the chinese economy is really in trouble. retail sales, 11.0% increase in
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october, not really. you will have problems there because eventually, alibaba is going to be run down by the problems in the chinese economy. so far, he is staying ahead of them. to his credit, that is good. the problem is he cannot do that for much longer. chang, thank you very much. alibaba pulled out all the the stops for today's event, spaceyng getting kevin to reprise his role as frank underwood. >> good evening to the great people of china. i am the 45th president of the united states, frank j underwood. tonight, i want to take a moment to say hello to all of you out there to wish you a happy singles day. if i were allowed to shop on your singles day, i wonder how cheap i could get a new burner phone, for example, because one burner is never really enough. i would order 10. cory: "house of cards."
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one of the most popular shows on china's answer to netflix. coming up, more bad blood for theranos. the startup reportedly unwinding a secret deal. ♪
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cory: the theranos saga continues. wall street journal reported safeway spent $350 million offering their blood tests. but the partnership has fizzled. the project would never have been disclosed by either company. theranos responded to the article. the information is misleading and defamatory. emily chang discussed theranos
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troubles ongoing during the latest episode of "studio 1.0." take a listen. >> i know elizabeth and i have a lot of respect for her mission. i have stayed out of knowing the details of it. health care is changing and i think people are always going to be really skeptical and the onus is on us to be transparent. emily: how do you walk that line between protecting your trade secrets and being transparent? >> in the system she is operating, she is not required to have the transparency that people are asking for. that is part of this disconnect that is happening. the fda has put out guidance where they are trying to regulate that whole industry. that will change everything. everyone will have to be more transparent about what they are doing. if that is the type of call the fda is making, it will be good to have the same transparency across all diagnostics. when you are in the middle of a crisis situation, it is hard to evaluate.
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that is why it is the media's job, when you are executing and when you have more fda approvals, all those things will speak to what the reality is. cory: do not miss the full conversation in tonight's "studio 1.0" at 9:00 eastern. we will talk to solarcity ceo. an interesting company indeed these days. ♪ cory: solarcity seems to have
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hit a wall last week. investors hit the sell button. the money-losing solar company slashed its guidance and said it was scaling back installation forecast for this year and next year to become cash flow positive. will the new model work?
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lyndon rive joins me now. appreciate your coming on. let's talk about how your business works. you guys put solar panels on the roof of someone's house and they pay you over time. essentially, the homeowner is leasing those panels from you. lyndon: we go to the customer. they do not pay for the equipment. we pay for the equipment, we pay for the installation. they pay for the energy. we sell them that energy at a lower rate than utility. our customers save 15% of their energy rates and given the choice, most go clean. cory: i have solar panels on my house, but i own those panels. , that is an house asset. if i had yours and i go to sell my house, that is a liability?
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do i have to pay you back? what happens to the homeowner? do they have to sign up with you? lyndon: it is not a liability. you have a house that generates electricity at a lower rate. it is an asset. at the size we are right now, we have about 20 people move every day. 100% success rate in transferring it. cory: the obligation transfers to the new homeowner. lyndon: they really just get cheaper clean energy. cory: what happens as energy prices are falling? not least of which in california. lyndon: this is one of the things people don't understand. wholesale energy rates are
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declining. retail energy rates are increasing. in fact, we will be increasing our pricing because retail rates are increasing. in almost every state, most of the retail rates have increased. california is having a large increase. cory: california is going to go through a change, what they charge a homeowner for connecting their solar panels to the grid. that surely cannot help, but how much will it hurt your installation? lyndon: the whole policy change right now is something they call net metering. the new rules for california. you are allowed to install a solar panel and back feed onto the grid. the new rules are coming up at the end of the year. we are optimistic. the state legislation says the new rules have to provide for a growth market for rooftop solar. we do not know exactly what the
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new rules will be, but we are optimistic the new rules will be positive for the industry. we have one of the best governors in the world, passionate about climate change. he is not going to see rooftop solar damaged. cory: your leases are typically 20 years, right? guest: correct. cory: what is your calculation for how many of your customers will sign on for another 10 years at the end of that period? lyndon: i expect most of our customers to sign up. there will be a price discussion. in our forecast, we will expect to reduce the custom by 10% to keep the customer motivated to sign up. there are no moving parts. this is not a computer that becomes outdated. it provides a commodity. cory: but they do degrade over time? lyndon: a small degree. cory: they will not perform as well at the end of 25 years.
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lyndon: they will still be providing 80% of your energy needs. 65% of your energy needs. at the end, maybe we add a few more panels to get them back to the 80% level. this stuff will work for a very long time. calculating an additional installation cost at the end of the contract? ? lyndon: only if the customer has extra energy needs. what i suspect, they will just roll over and do an extension and that extension will be at a discount. cory: i really appreciate your time. thank you for coming by. we will continue to follow. coming up, a conversation with michael evans. we will get beyond singles day.
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the google x cofounder talking about his latest startup and how it achieved unicorn status today with a $1 billion valuation. ♪ angie: it is 12:30 in hong kong.
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i am angie lau with an update of top stories. aussie dollar jumped after the addition of 59,000 jobs in october, four times the forecast. australia is set for its best year of job growth since 2010. it also is the pressure on the rba to add stimulus to the economy. is undertz director
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investigation for corruption. former vw bus martin winterkorn is expected to step down amid the fallout from the emissions scandal. he has resigned as chairman of the board of audi. winterkorn's initial reluctance to cut all ties with the vg group your criticism. here is david in glass. -- ingles. david: the flip side the past few days has been range-bound trade. tencent. down into
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china, shanghai poised for a steep loss. the bank of korea governor saying it is technically possible to bring rates down further. you have to think about the repercussions of having rates so low. s falling the most in 28 years, likely due to not raising as much cash as they wanted. o, narrower than expected loss for the second quarter. we will see how the shares react in 30 minutes time. ♪ cory: beside singles day, alibaba is betting big on m&a.
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the latest example, an $80 million investor in box. alibaba's president michael evans told emily chang success in the u.s. could look different for the company. michael: success in the u.s. looks like things. number one is putting the largest retailers and the most important brands on our platform to sell our products to china. we have a number of them on the platform today, but there are thousands more which will want to connect to the chinese consumer. the chinese consumer is very interested in high quality brand of products from europe and the u.s. step two is to make sure the platforms in china that sell products from china are performing well and selling high quality products from china into the u.s. consumer. emily: how do you convince u.s. customers to use your website and platforms instead of amazon or ebay? mike: our strategy is not about
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competing with amazon. small companies we have invested in our less about finding the investment opportunity that is going to be a future competitor with amazon and much more focused on starting to learn about the domestic market. in the u.s., our focus is on big brands and the small businesses that want to connect to the chinese platform, not on the u.s. consumer and developing a local business. emily: given your background at goldman, the stock has been on a roller coaster since the ipo. how do you explain the lack of investor confidence? michael: i do not see a lack of confidence. i see volatility. if you look at the volatility across the sector and many sectors in the markets, stocks go up and down over time and in relation to the short-term news cycle. i do not think there is any evidence of lack of investor confidence.
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i think that our stock reflects the opportunity that is ahead of it, there will be natural questions about how quickly we can develop the international strategy. that is down to me. emily: how do you respond to investors shorting the stock? michael: everybody is entitled to their own opinion on any stock. i do not particularly like to comment on the trading strategies of any hedge fund. they all have different strategies and different approaches to the market. some will be right and many will be wrong. emily: what about your own observations and your own experience living in china? are you concerned about the economy slowing down? given that the future of alibaba is very much tied to the future of the chinese consumer.
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michael: i spent 21 years working, living, and building businesses in this country. i think that has given me a perspective of where china has come from and where it is likely to go. i am in a small category of people with confidence about the resilience of the chinese economy. notwithstanding the many challenges that exist here. the economy is probably slowing down a bit, but i think growth will exceed expectations, particularly international investor expectations. the online component of that growth will continue to be strong. we are seeing it today in the performance of 11-11 in terms of domestic consumption and international interest in this program. emily: alibaba has made two deals a month over the last year, $13 billion, everything from soccer teams to
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pharmaceuticals to investing in hollywood. what is the coherent strategy? how do the deals relate? michael: in this sector, e-commerce, where we are approaching 400 million consumers, consumer desire is changing dramatically. a big part of our strategy means we have to be positioned with the right investments to satisfy that demand. if you look at our digital strategy, we have just made a u, ainvestment in yuk critical part of our digital strategy for the chinese consumer. we know what they want and we know where they are heading. emily: we know alibaba, we know jack ma has been visiting hollywood. what are the hollywood ambitions? mike: i do not know what alibaba's hollywood ambitions are.
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our digital ambition is to provide a wide variety of content for the chinese consumer. whether it is music, games, movies. emily: what about something like paypal? alibaba be interested in owning outright paypal, ebay, yahoo!, after they have been off their state? michael: i do not know what regulators will think about anything we do. we will work with them closely. you should expect our international strategy will have a component of both organic and acquisition and we will continue to evaluate opportunities as they come along. not just in the u.s., in every market. cory: that was emily chang and michael evans. apple's gigantic new ipad goes on sale today and sam grobart got his hands on the ipad pro. both hands. ♪
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sam: this is the new ipad pro. it has a brilliant 12.9 inch display, weighs 1.5 pounds, and can be used with a keyboard and stylus. none of those details outshine the simple fact that this thing is huge. ♪ this may be hard to convey in a video, but get your hands on a and the size is almost overwhelming. the larger display means you can enjoy even bigger videos and draw and markup on bigger pages. it changes the idea of an ipad from being a sophisticated viewing device to becoming a much larger digital canvas onto which you can express your imagination.
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at least that seems to be the intention. the thing is, i do not know about you, but i use my standard sized ipad for a handful of things. watching movies, reading stuff online. in a pinch, i have used it to write stuff. when i get down to business, i go to my macbook air. in an attempt to bridge the gap, the pro can be equipped with the smart keyboard cover as well as a stylus called the apple pencil. both are the best keyboard cover and stylus i have encountered. that opinion is only useful to you if you like keyboard covers. i don't. i like a standard keyboard. as for the stylus, i cannot draw. i do not see that changing anytime soon. that is why i am not jumping up and down about the ipad pro. but i do not think i am the intended customer.
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maybe my colleague is. she is a graphic designer. the customer who is really in sights is a chief technology officer. he or she will go out and buy ipad pros by the hundreds. having successfully conquered the consumer market, apple wants a piece of the enterprise too. -- cory: as we heard, check out the shares of angie's list. iac offered to buy the stock. ♪
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cory: cities and towns across america are marking veterans day with parades and the like, but for disabled vets, is lending a hand. the charity is working with veterans in new york and around the country for a chance to march virtually. vets in va hospital's were able to use cardboard and 360 to virtually join the parade. airbnb on a charm offensive today. they released a statement, outlining his plan to cooperate with cities and defending the positive impact they say the company plays. they are fighting a ballot
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measure in san francisco. it would have crimped their business. here now is the founder of as a car, robin chase. great to have you on tv. i want to get your perspective on what we are calling the sharing economy. economy is people peer to about assets, peer, a much larger movement of platforms rebuilding how we think of businesses. we were just listening to solarcity and alibaba, both of those are constructed so all of the employees, it is a much deeper collaboration with homeowners on the outside. solarcity is doing all of the heavy lifting and making it easier for homeowners to offer
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their electric bill to transform themselves. alibaba, instead of doing everything themselves, like amazon, they are welcoming all of these smaller companies to sell on to their platform. it is this combining of big and small, the advantage of the big guys with their marketing muscle, their big insurance guarantees, and the small entities. they are doing the localization, specialization. cory: and yet all of these interesting new business models come up with a whole list of headaches. solar city, as long as the solar price can be cheaper than the utility price, this model will work. the problem is in some places, the price of power per megawatt is below the price of solar. alibaba, some of the
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sellers are creating fake sales. robin: we are really early in the process. look at ebay. they were the first guys to work with lots of small people. the first thing they did after they learned the hard way, ratings and commentaries. when you are working with a distributed group of people, you are not all in control. these are things we can overcome because the upside is so incredible. exponential growth, amazing learning. with the platforms you are seeing and how much they can learn, this hyper local adaptation to every single circumstance. cory: when you started with zip car, how are you trying to re-create the model of providing transportation for people? >> i was feeling very selfish with what i wanted and how the
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technology was leveraged. the internet lets you share very specific things easily and wireless was going to make that happen. so zip car leveraged and why we succeeded, we made renting a car as easy and convenient as owning your own and for a much cheaper price. for people who do not need a car, this was the way to go. cory: you have done so much in transportation. particularly car transportation. why? >> i love that question. transportation is the center of the universe. did you have a good day or not a good day? were you able to get that job, go see your friends? it all has to do with the quality and ease with which you get there. it is the center of everyone's life. are you in a good mood or bad? how long did it take you to get on the subway? cory: i think of your career as
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an urbanist. i do not know if you think of yourself that way. but you are focused on the automobile, an anti-urban device. robin: it is true. that was my entry into the transportation as glue market. it is the glue of our lives and holds those pieces together. no matter what your economic opportunity is. it is a curious thing. entrepreneurs like problems. problems are opportunities. we have a mono-modal, everything is built around the car. the car has a huge number of problems. the average american spends 18% of their income on their cars. imagine, when you go to work, the first hour and a half is paying for your car. cory: or monday.
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when you are less than 16, your life sucks. i was talking to someone whose mother has had three car accidents and is still allowed to drive. she will not give up her license and we do not test. and in, the congestion that is going on. we need to get away from that one way of getting around and go into a much more diverse way. that will give us all joy and improve our cities. save our money. cory: thank you for coming on today. robin chase, the cofounder of zip car. tomorrow, do not miss former ibm executive sam politano. later in the hour, investor ron perelman. and google adapting to a big valuation. ♪
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cory: just 13 months into udatence, you definitely -- 1000thhas graduated its student and just raised $105 million in funding. it is valued at greater than a billion dollars. joining us now from california, sebastian thrun is on the phone. i saw you in person in new york city yesterday. it is confusing to me. maybe because i have not taken one of your courses. congratulations on the fundraiser, what are you going to do with the money? sebastian: grow. i want to reach everyone on the planet. there are over 7 billion people. i want to empower everybody. cory: talk to me about success rates. yesterday, i talked to somebody from general assembly. different model but similar
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goal, coaching people to get into the workforce. they boasted a 90% placement rate within 100 days of graduating. do you keep stats like that? do you think they are valuable? sebastian: we are global. we open admission so everyone can come. our placement rates are around 40% to 50%. when you make it, you have amazing opportunities. cory: you are saying general assembly classes are too easy? sebastian: it is a different admissions model. to the extent we admit fewer students, there are amazing finishing rates. cory: specifically, who is your dream student? sebastian: an aspiring person who just wants to reach for the stars. i spent this morning at google and i invited 50 top students on campus and they all have the same story. they had a job they did not like, they wanted to move to
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silicon valley. they spent a few months learning and android course. they got these amazing job offers. the annual salary is often in six figures. cory: do you think of structuring your learning offerings around the places where employment is the most difficult? sebastian: we have entrepreneurship, ios, android, we have some new things. we just launched machine learning, a hot topic. these are things that are the fastest-growing industry. data and cyber security is growing rapidly and there is a huge shortage of supply. the idea is to give anybody in the world a chance to learn these things and a chance to have an awesome job. cory: we just put up a slide that shows competitors in the space., general
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assembly. to differentiate amongst them, should i be thinking about who the students are or how they are acquired? sebastian: many of our friends work with academia. the courses are made by colleges. they do a phenomenal job. opposite. we went to the industry, worked with google, amazon, leading companies. we asked, what would it take to get a job at your company? we get their best experts and we build the curriculum so people can find a job at places like google and facebook. cory: interesting stuff. congratulations on the race -- raise. cool stuff from sebastian thrun. good to see you twice in two days. that does it for this edition of "bloomberg west."
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tomorrow, the ceo ceo, we will see both of them. we will see you tomorrow. ♪
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>> the following is a paid program about humana paid medicare plans. >> welcome to your medicare, your decision, the program that guides you through the medicare options. there are many different medicare choices today. are you sure you have the right plan, are you with the right company? the wonder if you can save money with a different plan? this program will y


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