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tv   Best of Bloomberg West  Bloomberg  May 22, 2016 9:00am-10:01am EDT

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♪ emily: i'm emily chang and this is the best of "bloomberg west." coming up, the google developer conference is all about ai and vr and we hear about the company's newly announced android tv set-top box. plus, facebook faces a fallout of accusations they're trending topics section is biased. and, he handpicked a man to lead microsoft. we will speak to john thompson about microsoft, and brexit. first, the highlights from google's development conference. the future of google is
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artificial intelligence and that was the message. the company unveiled a digital assistant and a new the our platform called daydream. there was also another company on campus and that was the number three smartphone maker unveiling a tv set-top box that runs on android. we caught up with xiaomi's vice president for more. show me how it works. >> you have the android tv home, what it looks like on your screen, we have different rose up apps -- rows of apps. you have a row of personalized recommendations, the more you watch content, the better the recommendations will be. this supports 60 frames a, which is relatively new in the
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industry and supports hdr content. people are talking above the next generation, talking about 8k already. emily: how do you think this stacks up to the set-top box? >> in addition to the harder aspects, which i have not talked about, it is the approach to content. we are working in collaboration with the google. it android tv brings the content you want, we have google play and all of the major entertainment brands are bringing their apps, most of them are already here. you have a huge number of games -- youtube, the official youtube app you can only get it on android tv. just a wider variety of content options that you don't get anywhere house. plus, you have a lot of the google animations. for instance, i can do this. what is that movie where jim
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cameron gets his memory erased? -- jim carrey gets his memory erased? there it is, "eternal sunshine of the spotless mind." emily: google assistant made that happen? >> essentially, that is the beginning of it in the background. emily: do you guys have an answer to google home or amazon and echo? >> we have a mature smart home strategy. we care a lot about this stuff we are doing the basics first, we are launching a tv-based product. we will be launching smartphones in the near future. we are very excited about the home system. emily: talk to me about your international expansion strategy. these great numbers came out like 42% year-over-year. you are beating apple. most of the sales are in china. how well do you think they shall me brand will translate abroad -- xiaomi will translate abroad? >> i think it translates really well because we focus on the
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product. with this market -- what this market cares about, all of this innovation, people hear about it and we are a software industry and a electronic company here in the u.s. is to select products we believe people in this market are going to associate with and in thinking -- to associate in thinking these are high and products, things i want at home. that is the angle at which we will come. emily: are you running into any challenges when you are looking at expanding globally? if so, what are they? >> no challenges in particular, but we want to be focused. we have been in china for six years and in india for almost two years and we are doing very well. we are number three in india. that is even faster than we expected. we are just about at the point that we will be on the next market. the u.s. feels like a market we
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are investing in because it is a large market, but it is a most important market in the world from an influence perspective. what happens in the u.s. influence the rest of the world. having a strong brand here and successful products in the u.s. will help everywhere else. emily: my interview there with hugo barra. google has been clear about its ambitions in virtual reality. first, they unveiled the affordable head amount that peers with the smartphone. now the next generation," -- now the next generation, and away ecosystem called daydream. our editor at large, cory johnson caught up with google and ask them to tell us more. >> daydream as a platform to enable high-quality virtual reality. it consists of phones with very high specifications to make sure they can render things smoothly and really good sensors. and a reference design for a headset and controller so you can slip in -- slip your phone into something and have a comfortable experience and,
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interact richly in vr and the apps, like youtube vr. >> the components, the processing power has to be massive? >> what is exciting in today's mobile phones actually have enough computing power in them to drive this experience that can make you think, wow, i am somewhere else. it is that high-quality. >> how powerful chips are in phones compared to what supercomputers. >> compound growth is pretty special. that is the growth of an existing old industry. >> when you are trying to grade a new industry. trying to create an industry around virtual reality. what are the key drivers of this new industry would be? >> to experience virtual reality, users need something to experience with an stop to experience. the apps and games and things they can do and vr.
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what we try to do is enable today's android ecosystem to build the components at once. from the hardware, devices, through to the applications >>. give me an example. >> one of the things we have done is create a controller that we are working with our hard work manufacturers -- hardware manufacturers. the company making a smart phone can manufacture a controller or headset. we have done the hard work to make something great. with great optics. it is nice to use and could create an immersive experience. we handed the knowledge to the companies to give everyone a leg up pushing the are forward. -- pushing vr forward.
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that is an app we have made through google and led to paint in space with light, paper, fire and any other material. artists are using it to sculpt amazing things in virtual reality. the second thing is a version of youtube we built from the ground up for vr. it includes spatial audio so sounds appear to come where they actually are. it will let you visit concerts and events in faraway places and experience those like you are actually there, but you won't have to fly around the world. there is a downside. you won't get the frequent flyer miles. >> it can be exhausting. maybe the immersive games can be exhausting on an xbox. what you think about that? >> vr is certainly more immersive.
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we are focused on bringing amazing, real-world content into vr. we are building this camera called the jump camera that lets you capture an environment in vr. that will be some of the most compelling and widely adopted vr content. emily: coming up, is facebook suppressing conservative news stories? mark zuckerberg meets with conservatives to allay concerns. my interview with john thompson. ♪
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emily: facebook, finding itself at the center of a media storm this week after reports surfaced of the company's trending section was biased towards liberal news. ceo mark zuckerberg called for a meeting. it those in attendance, glenn beck, the head of donald trump's campaign and former white house secretary. press secretary. we had another chance to speak to an attendee, arthur brooks. how would you describe the overall tenor of the meeting and your takeaways? >> it was a good, constructive meeting. facebook senior leadership was there and they expressed they were worried about trust, not just with conservatives, but people all around the country, who may be worried about being underrepresented and they wanted to know what we were thinking
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and they told us some of the things they were thinking about doing to fix it and we got some feedback and it was good, very interesting. emily: on that note, would you say that mark zuckerberg admitted, or indicated that there was bias at the trending topics section? >> no. there is an investigation that is ongoing. they do not think there is a conspiracy, and i am sure there is not. it is implausible that there is a conspiracy going on on this. emily: why do you say that? >> because i -- because conspiracies are hard to pull off and not very profitable. there are 167 million facebook users in the united states and they want a platform that appeals to all people with different viewpoints. having people inside the company company -- inside the company, or in leadership that we are trying to shut that down would be a pretty bad idea for business, that is not what they want to do.
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i do not think anyone in the room thought that was what was going on. emily: ethan, crowd pack released data, 6% of facebook employees are liberal. 50% of them are more left leaning them bernie sanders, does that matter? >> i don't think so. i think facebook is probably an overall reflection about the demographic of the people who work there, they are very young. they are based in silicon valley where overwhelmingly people are left of center. maybe right on par with facebook's demographic. what is interesting about this story, emily, it is sort of -- moving us closer to the line where facebook is technology -- facebook is acknowledging they have influence over us in very subtle ways and everything i have heard the company say is they take that seriously and it sounds like they reiterated that today. that is something we will have to watch and i am curious, did
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facebook acknowledge that, did they say they understood that what they put on their news has influence on what people perceive? >> yeah. they talked about trust. and trust matters to everything when you are a media organization. one disseminates information without editorializing. facebook has no ambition to become an editorial page. this brings up emily's last question, does it matter that a liberal point of view so overrepresented from a national perspective on facebook and i think it is an interesting question. it is a big opportunity for facebook as a matter of fact. i believe i could faithfully represent liberal point of view although i am a conservative. it would be a good idea to have more different points of view in the room, in the community. i think mark zuckerberg can use this as a major opportunity to have facebook be a forward leaning kind of company that tries to represent americans in a more unbiased way simply by getting more voices in the room. emily: there seems to be some now, tension here in that. facebook is an independent business organization and the conservative party would say that the government should not ever interfere, interfere as little as possible. so, what exactly do you really want from facebook? what exactly -- from facebook? >> i do not know what i particularly want, they were asking my opinion.
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it is not that i was going to facebook with a set of demands, i have no demands. i want free enterprise, i want a great company to be able to grow and serve americans better. that is the job of capitalism as far as i am concerned. they just wanted to know what i thought they could do to make the situation go from something that is a bit of a conflagration into an opportunity. that is why i was there. emily: what do you think they can do? >> i think this whole idea of using this as an opportunity to
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pivot to a community that is more representative is a big idea. if you have a company in silicon valley, it is overwhelmingly a left-wing place, i get it. it is also a pretty nonreligious place. people who look at facebook and are relying on it with trending topics and news feeds, they are not all like that. and maybe this is a good opportunity to build a community where people in a civil and respectful and friendly way can understand each other's points of view a little better. in so doing, maybe some of these bombs in the road would be naturally avoided. emily: in terms of users on facebook, mark zuckerberg pointed out that donald trump has more likes than any other presidential candidate and also, that fox news gets more interactions on facebook than any other news outlet by far. >> yeah. until i heard these accusations, i would not thought there was any bias here. and facebook is in a position to use their technology to show that. they can algorithmically show or prove or disprove that there is a systematic bias one way or
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another. i am curious, did they talk about deploying technology to improve the status quo or to rebut some of these allegations that have been made against them? >> yeah, for sure. the trending topics algorithm is a pretty new thing and it is very small compared to the news feeds. it is something that they are trying to get right. they are extremely interested in how they can improve it and are very much in listening mode. in the weeks and months, we are going to see some actual, positive changes in the way they deal in terms of engineering solutions. i think cultural solutions will have to come along and i think they are interested in those as well. emily: that was arthur brooks, president of the american enterprise institute. coming up, will break down apple's big bet on the company may be paying off. could the days of the elevator pitch be numbered?
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more ahead on this hour. ♪
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emily: earlier this month, apple made a $1 billion investment in china's's -- china's leading ridesharing company. didi chuxing. reports are swirling that didi is targeting a u.s. ipo in 2017. something the company denies. we spoke to the founder and -- we spoke to the founder and are bloomberg reporter. emily: what do we know and what did didi say? >> the report is from us, 2017, we could be considering ipo in
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new york depending on the competitive environment. there is some wrinkle room -- some wiggle room. it emily: didi denied the report? >> yes, but i think it sets up the timeframe. emily: you just spent several weeks in china. you use those services. what did you think? >> it is pretty clear that there is one service the needs to work on quality of little bit. the other one obviously, too. drivers arriving on time, knowing the city. didi has an edge because they are paying higher wages. they are getting the drivers in those cities better. a lot of people tell me, and these are telltale stories in their gene -- stories in beijing, where drivers come from
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far away. it is their first job. they don't know the city really. there is a lot of work to be done. they have 99% market share. emily: i did not the huge difference, but i think if we had gone farther out to the city edges, to other cities, it probably would have been more difficult. what do you make of apple's investment? >> i think it is probably a very smart move on behalf of apple to get into the chinese market. they will benefit from it. we all know that there is a government investment in over -- uber in didi in china. you have a situation where you have a government investor and you have apple trying to get along with the government in china as well. there are common investors in the same company. thing you got this interesting trifecta here of bidu and alibaba invested in the competitors. they were invested in the main competitors and they came together. now you have the baidu part investing in uber. that connect to the didi part. a very interesting lineup.
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this is like politics at a very high level. emily: let's talk about this for a moment. when the president of didi was here, we asked about the relationship with the government and how open regulators are to the idea of a car sharing service across the country. take a listen to what she had to say. >> the chinese government has been more and more open to us. supply issue is the top issue. the chinese government understands we need to utilize the existing resource to put into the commute system so people can travel. emily: so here is my quest set out. china's government has made it impossible for companies like facebook and twitter and google to succeed in china, could they do that same thing to uber? >> i think there is a huge economic need for this, there is anxiety in china about where the economy is headed and this is an industry creating a lot of job -- creating a lot of jobs. and that is to uber's advantage. it is not a media company, it is
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not about political speech, it is about transportation. so, i think uber hopes it will not get categorized as facebook and others have been. emily: as somebody who has run a private company, do you take didi should go public or should they continue to keep raising money if they do not seem to have a problem? >> i think it depends on their international plans, whether they want to focus only on china or other markets. it also depends on, at some point, what is the financing needs and pricing they can get. they are supposedly burning both of them, uber, as well as didi over $1 billion a year. emily: even did is -- even didi is burning over a billion dollars a year? >> they are both burning a lot of money. uber is probably going about $2 billion last year and losses. they are losing a lot of money. for uber, it is more than just china. emily: eric newcomer and investor --
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coming up, my interview with microsoft chair and investor john thompson. what he thinks of brexit? and his advice for marissa mayer. ♪
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emily: welcome back. microsoft chose aside in the brexit the, saying they should stay in the european union if they want to avoid trade. brits will vote on whether to stay or go in a june referendum. i spoke to john thompson about the decision. john: you do not want anymore geopolitical instability because we have enough instability as it is, so to the extent that there is a material change in the e.u. consortium, that creates geopolitical instability and that is not good for the environment, be it business or what is going on for the
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citizens of the european union. emily: what would you like to see the company focusing on in the coming year? john: i think the focus is good. we are focused on cloud, hybrid model of the cloud, application services that we can deliver, not just in the cloud but for mobile devices. if ever i would like to see something change, it is about pace. for my days at ibm, we never seemed to be running and i think that is the case when you are established. while you believe you are moving fast, in fact, you are not moving us last as a startup. emily: how aggressive would you want to see the company being in monetizing the cloud, which seems to be the future? john: i business has triple digit growth and it is not common to have something that size still growing to triple digits, but couldn't it grow it twice that rate? it is possible.
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given that there seems to be a titanic or titanic shift going on in the industry, where everyone is moving to the cloud, so why shouldn't we capture more of that? should we invest more? how much more would are revenue be if we invested more? that is the topic of discussion we will always have -- are we moving fast enough to take advantage of this incredible opportunity? emily: have you see the cloud war is playing out, whether microsoft, amazon, google or startup? john: if you look at history, what you see is the category where there are typically two or three liters in the category. we find ourselves in the lofty position of being of the one or two in the cloud space right now. the question is, can we sustain
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acquisition and move toward be number one in the cloud space? emily: think you can do it? john: we are going to -- emily: amazon is giving you a run for your money. john: amazon had a head start and we have a lot more work to do. can ibm, google and the other players, who once to the number three, can they, too, catch up, not just with microsoft but pass microsoft? we will not sit by and rest on the past success. we have got to double down to make sure that none of them catch us and we have a good chance of catching amazon. emily: how important is cloud in the cloud strategy to the livelihood of any start up today? john: today, if your startup company, it has got to be cloud base. no one is looking for a perpetual license model anymore. i can remember mark soren berg
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said to me years ago, i only invest in revenue streams -- and i was like, really? i thought that was awed. that was five or six years ago. that is what all of them are doing today. if it is not recurring revenue, they are not interested because it has a predictability that once you capture that customer, the sustainability is pretty powerful. never say never, but i don't think they will be significant investments made in on print software or in hardware anymore. hardware will be necessary because all application will want to sell hardware later, but priority hardware, i'm not so
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sure. emily: do you think they will crack the code in china? john: no. we are trying our living hearts out to vote hold to our standards and principles as the company, but find a set of things that we can make as concessions to the chinese government and the kids is access to billions of their users. it is balancing the standards that we had and the consistency that we want with the interest that we have and have an access. emily: tim cook is in india this week. could india beat the replacement market for china? john: no. it can certainly be a supplemental market because it is one of the few growing economies in the world, you cannot replace something with one point 6 billion people big and growing at 7%, down from 11%, but their gdp growth is still more than three x in the u.s. you can augment china, but you cannot replace it.
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emily: you are ceo for many years -- you are ceo for many years and they're going through another ceo transition. but do you think is going on there? john: it is a huge personal disappointment. i spent 10 years there and i thought we were on a very good path. obviously, we were not. i think it is time for not just the team of the company, but the board of the company to do self reflection on it they made the right calls. if we have made the wrong calls on people, have we made the right calls on ourselves? i think it is time for a lot more self reflection, but i do not know. i'm not involved in the company. emily: we are seeing apple go through an existential -- yahoo! go through annexes central crisis for what would you say to mercy myers?
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john: hang in there. i had investors therefore a brief period of time and one was carl icon. fortunately for us, because of the volatility of our stock, the stock moved and he sold off, so we never really got the public exposure, it you will, that marissa has gotten. i think she started with a tough hand that was dealt to her, and she needs to play it out. do not let an activist to push you to do something you do not strategically believe in. to the extent that her board supports her, hang tough. emily: this is an issue we had talked about a lot when it comes to the technology industry, diversity and the lack thereof when it comes to women and minorities. given how many years you have spent in the industry, where have you seen the most progress and what do you think there is still the most work to be done?
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john: some of the more established companies have done a better job. older companies like ibm, if you will, has done a terrific job of raising the issue and trying to do something about it. it ultimately comes down to the numbers, not the words. numbers do not necessarily support the words right now. i was quite shocked when i came to the valley in 1999 when everyone was so enamored with the fact that i was the highest-ranking african-american in the valley. i was like, what is the big deal? i now recognize it is a big deal. we need to do a better job of diversity and inclusion, and i think companies like microsoft, google are working hard at it, but they have to double down a triple down to make real progress. emily: that was john thompson, microsoft chairman and investor. coming up, the company that reimagined the vacuum cleaner is
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after your hairdryer. how this appliance has been reimagined. for more of our best interviews, check out our podcast. subscribe on itunes and sound cloud. coming up monday, we will talk to twitter cofounder and makers of hbo's silicon valley about the changing world of social media. ♪
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emily: dyson, the pioneering british packing company, is in the midst of a transformation and they went to remake the re-think of home appliances, first with the backing cleaner and now upgrading the hairdryer. it is a lot of r&b buyer power. they spent $71 million developing the supersonic. we spoke with the ceo of dyson. this is a $400 hairdryer. by should i spend $400? >> first of all, when i turn it on, we can still talk. emily: it is fairly quiet. >> what matters more, we have really reinvented everything
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about the hairdryer, so the first thing we did is develop a small digital motor, very powerful and it creates a lot of their pressure. we put that in the handle, so the weight is at the bottom so my hands do not get tired. we put intelligent heat control because most burnt hair, so it dries faster, gives you a shine and i have three women in my house and i can tell you that they would absolutely kill me if i took this away from them. [laughter] >> you spend all this time on the technology, so what else can you do with this client hairdryer? what other products can you reinvent because i don't dry my hair that much? i do not have enough. >> it is a great example of what dyson does. our engineers get frustrated about things, and then they want
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to solve a problem. when we looked at hairdryers, nobody had really thought intelligently about it. if we redeveloped it, we could come to a different place. we have done the same with vacuum cleaners, battery driven now, they are very powerful, and we're doing the same with pamn -- fans and air. emily: what else -- >> fans and air purifiers. emily: what else? >> later this year, we are releasing and a thomas robotic vacuum cleaner, it is connected, so when you are on vacation, it will clean your house and all of that. emily: your vacuum can clean my you are not home? >> while you are not home. we had 2000 engineers working with universities, so there is enough frustrating things left in the world that maybe we could
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find a solution to. >> why do think it took so long for someone to redesign the hairdryer? >> i think that is true. because if you really want to come up with different technology, you need to take the foundation approach. i do not think others will do what we do. [indiscernible] spent $70 million in other developments, only to make a better hairdryer. oddly, that motor is very, very small, the fastest spinning digital motor in the world. you can create a different appliance out of that. >> all household appliances quieter. >> that is frustrating, no? emily: you also have wild patents in the battery area and are working on making better batteries. what is the state of your research so far?
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>> we are interested in batteries. it goes back to dyson engineering and getting frustrated about water technology, so we said we could do that -- motor technology, so we said we could do that better. today, relying on the best water technology limits with some products can do, so we are investing in battery technology with the aim of finding a breakthrough that can deliver significantly higher energy density than is available today. that means machines that can run much longer or much more power. emily: you think you can take on tesla? >> we are not commenting or will not, but we get constantly teased on what engineers work on in the labs. emily: coming up, he cofounded that a gaming phenomenon and is investing in all things video. now taking pictures on snapchat. we discussed, next. ♪
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emily: these may be numbered for the elevator pitch, as they start polishing up their snapchat. 10 of the best ideas will be chosen. i caught up with the partner who came up with the idea, 32-year-old justin, to find out more. justin: all these people had been reaching out to me for entrepreneurial advice on snapchat. they would be asking, how do i get started? they were sending me pictures and there is a massive community
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of young people on snapchat, so we figured we would go where they were and tackled the competition. emily: how does it work? justin: we opened up an application process for companies to apply due to take over and we have received 400 applications, a lot more than we expected. emily: so, snapchat users are increasing, like startup lessons, did you watch a bunch of those and finally say, we should do this? justin: i got into it in december, after years of having snapchat and looking at it from a product perspective. i finally got it and i started watching dj on there. emily: there has been a big climax of every batch where companies present their final product. there has been criticism that all the best deals are already taken at this point. could you see this replacing
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demo day or the way that the monday currently works? justin: snapchat will not replace them a day. we will involve how it works. i think often times, those companies are not always the best that do the best in the long run. we see that all the time. we are looking at evolving processes and as you grow the number of companies, how to make it more engaging. emily: how might you evolve the process? justin: doing something where there are more sitdown meetings. so that investors were able to connect with the companies more directly and providing a way for them to do that. emily: what is your take on valuations now? justin: they are going down. emily: really? justin: i think so.
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you saw some maker rounds in q3 of last year. since then, i think the investment appetite has gone down a little bit. i think they just closed pretty big rounds, but there is a slow increase. emily: slow deflate. just in: yes, nothing catastrophic. emily: as a founder of one of the original live streaming experience, what do you think about this book lies, periscope -- about facebook live, periscope, snapchat? justin: i think people combined them together -- emily: obviously, it is different. justin: i think periscope and snapchat are more similar. we all have these mobile apps that let people share video, but they did not take off.
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the reason i think they did not take up days it was hard to get an obvious. the interesting thing now, paring it would twitter, facebook, they're much easier to get an audience. emily: do you think facebook live could steal live? justin: i think facebook changes its mind on what they want to prioritize on people's feeds, so it likely that it is popular enough, it will not be in one year or two years. you see that over time. they had been prioritizing graph action and then spotify, sound cloud, pinterest, and then they popularized video and all of a sudden, facebook is full of video. now live is on everyone's feed, but it changes over time. i think they have the power to make whatever applications they want. emily: what does that mean for twitter? justin: i think the engagement is better on facebook live them
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fair scope or twitter, but i think they would do better than i originally thought. twitter is able to create other apps and i think enough people are using twitter every day that they can do the same thing as facebook and heavily promote something. emily: you give it a justin tv and it ended up being quite a success. do you have any advice for other entrepreneurs in that predicament? justin: we pivoted it to switch and it worked out pretty well. emily: selling to amazon for $1 billion. justin: all of the metrics, when we sold, people thought it was a crazy number but the metrics have doubled since we sold. it was about $55 million and the last announced number was 100 million, so probably much higher now. my advice is never sell your platform. emily: that does it for this
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edition of "the best of bloomberg west." tune in every day at 6:00 p.m. eastern. see you then. ♪
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♪ emily: he worked alongside steve jobs to revolutionize the way we listen to music, and became known as the godfather of the ipod. he spent nearly a decade at apple, then hatched a company of his own. in 2010, he cofounded nest labs, where he promised to re-invent every unloved product in the home. a promise so thrilling, google, soon to become alphabet, snapped up nest and its star ceo for $3.2 billion. joining me today on "studio 1.0," nest ceo and cofounder, tony fadell. tony, so great to have you here. tony: it's so great to be here. i

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