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tv   Best of Bloomberg West  Bloomberg  July 31, 2016 6:00pm-7:01pm EDT

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♪ emily: i am emily chang. this is the "best of bloomberg west." coming up this week, the end of yahoo! as we know it. we will hear from the ceo, marissa meyer. verizon beating out the other suitors for yahoo!. the verizon executive vice president and aol ceo both join us on the deal. plus, facebook blows past second-quarter earnings estimates thanks to a surge in mobile ads.
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first, to our lead story. it is the end of the road, and the start of a new chapter. verizon announcing it will buy yahoo!'s core business for $4.8 billion in cash. the deal concludes a seven-month process. it began in january, when investors called for a sale. bids from at&t and dan gilbert did not make the cut, and the deal also effectively ends the turnaround efforts of marissa meyer. her appointment in 2012 was celebrated by wall street and silicon valley. though she is staying on for now. we spoke with her right after the deal was announced and asked what verizon could do for yahoo! that yahoo! could not do as an independent company. take a listen. marissa: i think there is tremendous scale that comes together from all of the different assets they have been investing in. overall, one of the big challenges is we have reinvented our products. we have tried to make new yahoo! mail perfect for the phone, very proud of where yahoo! mail is at today. the same thing is true for news, weather, sports, finance.
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we have cornerstone applications that, when users use them, they engage with them and love them every single day. for us, verizon has tremendous mobile distribution and that is one area we are excited about. overall, i think it represents a huge amount of scale and opportunity for verizon. emily: you said you plan to stay. what role do you envision for yourself in this new entity? marissa: for the immediate future, the transaction will close in q1 next year. i have two priorities. number one, seeing the transaction through the close, but watching the value of our asian assets and equities we have there. moving forward, we will ultimately figure it out. the process is a little bit different. unlike a one-on-one acquisition, where you spend a lot of time
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doing the process, we will sit down with marnie and tim at verizon and desire the integration plans. it is important to see yahoo! into the next chapter. emily: you came here with so much possibility and so much hope. you wanted to restore yahoo! to greatness. you wanted to give us news and original content. how do you personally feel about the outcome? marissa: i feel very good about it. i think yahoo! is a company that changed the world and not many companies get to change the world. if you think about it, before yahoo!, the internet was a government research project. it really humanized the web and it is one of the reasons all of us have e-mail accounts. it popularized search and real-time media, and that is amazing. to me, it was, how do we take all of those historical moments and influences and harness that in the paradigm shift to mobile. if you look at where the business is, we are proud of our products in the way we transitioned our users.
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we have more than a billion users each month and 600 million are through mobile, that has tripled over the past four years. in large part, we think that is because of the quality of the products and the investments we have made. to take this incredibly powerful, transformational company that has changed the world and help see it into this new era is important. obviously, this transaction is not just about the strategic feature for yahoo!, but also unlocking value for our shareholders in the remaining equity stakes. this is an opportunity to kill two birds with one stone, and we feel we achieved that. emily: do you think having an active investor made your job harder? marissa: i think the company has had various active agendas around it over the past few years. i think you should always be
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open to challenge and scrutiny. i think there are elements that become more of a distraction, but the challenge of the scrutiny is not something i wouldn't shy away from. emily: there's a lot of scrutiny. marissa: i think you have to be able to stay focused through it. i could not be prouder with how the teams have executed through this period of uncertainty that has been around the strategic process review we have been in. we have exceeded our goals for the first half of the year and we will keep that momentum going. emily: you have said, if you had three more years, that you would turn this company around and do what you wanted to do. do you think you could have done more? marissa: i think we see the path to growth and i think that path gets accelerated with verizon. i do think that we will get yahoo! back to growth on the revenue side.
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we have continued to grown on the user side. it is up 50% with the mobile base tripling. we have a large legacy business that has been declining. i am proud of the growth we have had. we grew them to $1.6 million in revenue to basically nothing and i am proud of that. i think we will keep growing, and i am excited that verizon is a great acceleration to the effort. emily: beyond the immediate future, what do you really want to do next? will you be a public company ceo again, do you want to start something of your own?
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what interests you? marissa: i love a being involved in companies that get the privilege of changing the world. i got that at google. i got that here again at yahoo! i love all phases of companies. i was at google from tens of thousands -- i managed hundreds of thousands, and i love all phases of companies. i love the effort and the energy and the hard work required. all of that is exciting to me. it is really about the rare privilege of being able to be part of a company that gets to transform culture and people's lives. emily: you had three children in this job. you became a mom. your decisions around parenting were highly scrutinized. that is such a big accomplishment. how has motherhood changed you and changed the way you lead and
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your approach to business? marissa: i think you learn so much about yourself and having children. my children are amazing. motherhood is incredible. you learn a lot about yourself. i learned that i had quality time with my kids, but i love to work. i love to talk with them and have an impact. my parents are visiting this weekend. they had to laugh, because yesterday my son came up and we were making plans for dinner. he said, you will go and do your board call and i will go and kick the ball and then we will have dinner. it was silly that my three and a half-year-old knows what a board call is. to me, it has been a blended lifestyle. i get my quality time with them and watch them grow and learn. my background was artificial
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intelligence, so to watch your own children learn is incredible. i also learned that i love to work. i love to have a big impact and have that base to grow on and to bond with them. to me, it is important to me to keep going. i think being able to come up with a blended working style that incorporates them and allows me to prioritize has been important. emily: our conversation with yahoo! ceo marissa meyer. up next, $4.8 billion a steal, we will focus on what verizon gets out of this deal with the executive vice president and aol ceo tim armstrong. all fingers point to russia in the democratic national committee hack attack. we will hear from the director of cyber security and policy. this is bloomberg. ♪
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emily: now back to the deal that kicked off the week -- verizon's purchase of yahoo's operating business. verizon's president marty walden and tim armstrong joins bloomberg . take a listen. >> one thing that we have done is collectively come up with large-scale goals for the company. we really want to be competitive in the next generation of how digital is taking over the world from a consumer media standpoint. we let out a set of 2020 goals, and a main goal is to get the 2 billion consumers. the yahoo! brand is excellent, and the team is excellent and it fits into the larger strategy that verizon has. from our standpoint, if you look at what we announced 12 months ago on the original deal to what is getting announced today, you will see straight focus and strategy focus overall. >> this is not a big surprise, you signaled that this is likely
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where things were going. yahoo! has been in decline and losing money. how quickly can you turn that around by putting it together with aol and other verizon assets? >> it will take a lot of work. we have confidence in the leadership, and tim and his team. we understand it will take some work to integrate it. we are confident that there are brands that people love. we have a number of assets across verizon that will strengthen the business. we know it is hard work putting two companies together, but we feel we have the right talent and leadership to make that happen. >> can you be more specific? can you actually identify the assets that verizon has that can make a job at yahoo! that others could not? >> first and foremost, if you start with product technology -- when we brought aol, it was about tim and his talent and the
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ad tech capabilities. he also had great brands that we were not at scale where we needed to be. yahoo! gives us a scale that takes us out of the millions and into the billions. we also have been investing in content across verizon, just from licensing linear content into ownership. a company called complex, which we have 50% ownership in. we are building our own digital channels and made an investment in optimist tv, and in mobile which is important in how we scale the business. our goal is to take the content assets and bring them across the digital platform and bring more people to our platform and make the flywheel spend. >> marney, talk a little bit about who will be running what. it was a popular belief marissa mayer would no longer be part of yahoo! in any capacity after the business was sold.
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we got a headline crossing that says for her, she is planning to stay. who is running what and who has what job? >> this process was a bit different. when we bought aol, tim and lowell and all of the management team were working side-by-side to talk who will lead and what roles everyone would play. we were doing that before the deal closed, because it is an auction. we did not have the ability to talk freely about those things, because there were competitive bids coming in. tim and i will be out in the bay area with marissa and her team. we will come back to you and talk to you about who is in what leadership role. for verizon, tim will lead the integration for us and we will work closely with marissa and her team and make sure we have the best integration and retain the best talent.
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>> most deals fail because of a culture clash, because they do not get integrated. yahoo! comes from a silicon valley culture, versus verizon that is east coast. what are the challenges with those two cultures? >> one thing i would update everyone on -- we have a huge presence in silicon valley. i started my career working for paul allen and the cofounder of microsoft. that is when the west coast started to take off for consumer internet. i spent my time shuttling between new york and california for the last 15 years. i think we are uniquely positioned as a company and a management team to understand both coasts. we call it culture and code at aol. it is the culture of new york mixed with the code of silicon valley will make us successful. i think you see it in l.a. popping up. you see it in new york and london and paris. i was at vivitech. i don't think silicon valley and new york are different anymore. i think what you are doing is bringing the culture and code
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together, and we are the best positioned company to do that. emily: that was the executive vice president and president of product innovation at verizon, as well as tim armstrong, the ceo of aol. coming up, investors cannot get enough of facebook. we will dig into the blow away quarter and hear from sheryl sandberg herself. plus, our weekly roundtable focused on the explosion of interest in health tech with two longtime investors. this is bloomberg. ♪
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emily: facebook out with
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earnings this week. it also got a big lift from what mark zuckerberg called the golden age of online video. i spoke with sheryl sandberg about video driving continued engagement on facebook. >> the explosion of video on the platform is great for our consumers and also great for our business. if you think about all the new formats, a lot of them are live and recorded, but there are also 360 pictures. all of these formats are engaging, and we think they are contributing to our time spent metric. emily: and that is paying off. facebook now has over 1.7 billion users, two thirds of them use it every single day. i spoke with erna, an analyst with forester, and harry kargman, ceo of kargo. >> facebook has done an incredible job getting the entire world on its platform. it's unbelievable. if you look at advertisers, they
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are following where the people are. when you look at the ads on facebook, they are less brand advertising and more app install ads. facebook has done an incredible job getting people on their platform. emily: you think the app install ads are a weakness? why? harry: i call it the cocaine of the advertising world. the reason it is so is that if you are a startup and venture funded and you need to get people on your platform, facebook is one of the best ways to get those people to install those apps on their phone. emily: that is why we see a lot of ads for lyft and food delivery services. harry: exactly. all these new economies have spread out. we have the new uber for food. the new uber for laundry. the new way to go and get packaged goods to be delivered to your home -- there needs to be a way to get those services out. i think facebook has been the catalyst for installs of those
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apps on people's phones. i think it is a question if brand advertisers will make the migration to facebook versus traditional places where they advertise, typically on great editorial properties that have a voice, like bloomberg. emily: erna, they added $2 million to revenue, do you think there is a problem here? >> it is going to be difficult for facebook to continue with the explosive growth they have had. thus far, given the fact they are continuously able to grow their dau and mau numbers signal the fact that they have a skill in keeping and attracting users. the fact their ad revenue continues to grow at this time is also significant and speaks to the investments they have made in mobile and video and measurement. i think another interesting note is the activity that brands are now creating around messenger. the fact that they are willing to create chat bot experiences speaks to the fact they see that platform as an extension, potential extension of their brand. emily: when it comes to
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messenger and whatsapp, i did ask sheryl sandberg about monetization, and she did hint that those are coming. listen to what she had to say about messenger specifically. >> we are not breaking out instagram, but facebook is the main driver of revenue growth. instagram is making a real contribution, and we are excited about instagram. we announced earlier this year, 200,000 active advertisers. 75% outside the u.s. between facebook and instagram, we have the two most important mobile app platforms, and that is why we see strong growth. emily: now let's hear what she had to say about messenger and whatsapp.
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sheryl: in messenger we are looking at the organic activity that is happening between businesses and advertisers. we are happy to see we have one billion messages being sent per month between businesses and people. that is almost all organic activity. we are doing very early testing to see how we can monetize and drive engagements between business and consumers. right now, it is organic activity we are looking for. emily: harry, you are worried about the overreliance on app install ads. they have not even turned on the firehose. does messenger and whatsapp hold huge potential? >> they made a huge investment in whatsapp. i think they spend $30 billion on whatsapp. emily: $20 billion, but it is a lot. >> when you look at asia and we chat, all the platforms that are providing that commerce line, you see more and more commerce taking place on messengers platforms. those same functions are starting to spread in the united
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states, and people start using chat and messenger to do transactions. if they can be there in the platform at the time of transaction and bring advertising into the platform, that will be an interesting growth area for them. it will be a different game and different set of advertisers in there. because they own the platforms and messenger seems to be the next growth area in terms of how people communicate, it is very exciting. emily: the last thing i spoke with sheryl sandberg about, there is a lot of momentum behind facebook live right now. they believe that is driving time spent on facebook. she said they are not interesting in long-term content deals like with twitter with the nfl games and the democratic and republican national convention. how important is facebook live going to be to the platform overall?
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>> i think it is an indication of them wanting to go head-to-head with youtube. there are so many dollars shifting away from tv that continue to decline in millennial market. when you look at where those tv dollars migrate to, they will migrate to digital. which platforms will capture them? today, youtube is the key platform that captures the vast majority of those video dollars. tomorrow, what facebook is saying is they want to be involved and capture more of the video dollars shifting from tv. emily: what is your take on facebook live? how powerful is it? one thing sheryl mentioned was that they will not add ads, but facebook live is a new speed. if facebook live does well, that enables them and increases time spent, that enables them to make more money on ads. erna: i think facebook live is part of the overall roadmap to
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making sure that the majority of content on facebook in the next five years happens to be video. this is yet another way of attracting a different type of content producer, as well as another impetus for users to get in on the video game. it will be interesting to see how the live battle plays out between twitter and facebook. they both have different approaches, but they both have different goals. there is more to be told. emily: that was erna, an analyst with forester, and harry kargman, ceo of kargo. coming up, all fingers pointed to the russian government in the democratic national committee hack attack. we will take a closer look. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪
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♪ emily: welcome back to "the best of bloomberg west." i am emily chang. the fbi is investigating a massive hack attack on the democratic national committee, which some u.s. lawmakers and cyber security specialists have already linked to russia. chris finan, former white house director of security policy and legislation and current ceo of manifold technology, joins us to discuss the company. first of all, where does the fbi begin here? what are they going to be looking into? chris: they are going to be looking for more data to figure out who did this. attribution is very difficult, but if they can get more forensic evidence and potentially some other sources of intelligence to corroborate that, that will make for a stronger case. emily: from what you have seen, is this clear where it came from? chris: it is consistent with russia's overall m.o. and the evidence that crowd strike has
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provided is pretty compelling. emily: how hard is it to find out where they actually got into the system, how they got into the system, and what the motivations really are? chris: intent is very difficult, but in terms of finding evidence of an intrusion, typically you can find evidence of malware. in this case however, the hackers seem to be sophisticated because they covered their tracks. they deleted data, they manipulated data. those are pretty high-end capabilities and would have taken a lot of time. emily: this has been incredibly disruptive to the convention so far today. many of the people on the floor who are angry are bernie sanders' supporters. of course, trump has been piling on here. what is your take on this story? david: well, i find it tragic from many angles. the thing that i have been thinking about and possibly chris can comment on this, maybe now we are at the point with
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e-mail and security generally where, if you are not one of the biggest players, you cannot make thing secure. now facebook and google are pretty much encrypting everything, and i think that is incredibly, definitely the direction things are going. here we have hillary's server was hacked, they said, in addition to using it in the first place as an error. now we see the dnc's internal e-mail system, which probably was one that they ran on their own server to some degree. i don't know the architecture. but you know, it strikes me that people using primitive technology are going to get primitive results. i also cannot help thinking about the fact that donald trump refuses to use email, and he is probably smart not to do that. emily: facebook begin the founder of megaupload, chris. last year he said he thought julian assange would be hillary clinton's worst nightmare. this year. take a listen to what he had to say. >> i would have to say it is probably more julian.
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[laughter] but i am aware of some of the things that are going to be roadblocks for her. emily: you are saying that julian assange will be hillary clinton's worst nightmare? how so? >> well, he has access to information. emily: what information? >> i don't know the specifics. emily: i did message with kim today. he doesn't think that wikileaks is behind the hack here, but he does think there is more to come. he said that hillary deleted over 33,000 emails. i suspect those deleted e-mails will reappear in the upcoming wikileaks releases, and i am convinced that wikileaks has the deleted clinton e-mails and more. what is your reaction to that? chris: well it is not hard to predict that trolling will occur. i think it is also fair to assume that more certainly will come out. i think what secretary clinton has going for her is that she is generally held under the microscope all the time. so i think to suggest that some new revelation is going to come out of an e-mail is probably
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far-fetched. emily: david. david: i would not go that far. i think that she is clearly reeling from each successive revelation, and i don't think you can say it could not get worse. i wanted to ask chris before, shouldn't we now be operating as if essentially everything we do is a potential open book? is that how bad it is? chris: it is pretty bad. we encourage our clients to invest quite a bit in data security, but also to take great care. emily: what about not e-mail? chris: well, you have to be certain that what you say could come out on the record. you need to make sure it is consistent with your organization's strategy. emily: so look, if this is really coming from russian intelligence agencies, how should the u.s. respond? chris: i do think this warrants a response for several reasons. first, if attribution can be made to the russian government with any sort of confidence, this would be a significant intrusion of u.s. sovereignty. it undermines a political institution in this country. and so, to do that in my opinion
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is well outside the norms of the international system and does, should require some type of government response. emily: david, it is like a new cold war. a new front has opened. david: what it reminds me of is watergate. think of the controversy that unleashed and the chain of events that unleashed. it is a very similar kind of thing. it just happens that it is a foreign power. then you have all of these bizarre reports of the possible links between the trump campaign manager, trump himself and the putin administration and network. it is very, very weird in so many ways that none of us could have foreseen. i think that this sort of thing is tremendously destabilizing. i agree with chris, that this has to be taken super seriously. emily: that was chris finan and david kirkpatrick. coming up, we are seeing an explosion of interest in health tech.
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gene sequencing, but why now? we will explain. ♪
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emily: this is "the best of bloomberg west." i am emily chang. it is time for our weekly roundtable exploring trends in tech investing and venture capital. this week, health tech, from wearables tracking your steps, to startups slashing the cost of gene makers, we address the issues on the cutting edge of health care disruption. i sat down with two people who have been investing in this space for years. esther dyson of 23 and me and robert middendorf, partner at norwest venture partners. i started by asking them why health tech has suddenly grabbed the attention of traditional vc. esther: the affordable care act says you will be paid to keep people healthy. it is not totally happening yet, and it is amazing how slow the
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medical system is to respond to incentives, just the way people are slow to take care of their own health. but it is beginning to happen. the financial flows are changing. the health systems are beginning to realize we can make money by preventing diabetes as well as treating it. robert: i think we have seen three major shifts. we saw the market for the digitized health care information start with a high tech act. you had the government basically funded $30 billion of an industry to digitize health care. i think then the affordable care act, as esther said, changed how doctors and health systems are paid. they are becoming more and more paid on an episode or kind of a warranty like care model. the third thing is, we have seen the consumer adopt, as well as
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physicians and other providers, digital technologies. so you have got the infrastructure in place, the data in place, and payment in place to really create a new laboratory for change. emily: you are an investor in 23 and me, you are an investor in digital and mobile health companies. what is your personal philosophy guiding the decisions that you make? esther: because it is my own money, i can really take risks. i don't have like a list of criteria. and over time fundamentally, i have become more interested in actually cultivating health and later paying to recapture health. you can make money and both of them, but just philosophically i would much rather prevent diabetes than treat people with it. so what i am looking for, though some of this has changed as i am doing a nonprofit and i don't want a conflict of interest, but to me, the ultimate business model for a huge amount of this is an app with the curriculum, you know, user-feedback data, plus coaching. because the motivation part is
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so hard. and omatta uses coaches. blue mesa. all kinds of mental health services. talkspace. it is all a combination of something digital, some kind of data tracking, and then the human beings that keep you motivated. emily: you are wearing your wearable. robert, you invest in wearables. and other digital health companies. what is your philosophy? robert: i would say i agree with a lot of that. one of the big themes that we have looked at in health care is captured by omatta and health space, taking the labor of health care whether it is a physician, therapist, or a nurse and helping to improve their ability to scale to more patients over time. if you look at the labor and health care over the next 20 to 30 years, we are going to fall short in the united states to deliver care face-to-face, one on one. there is a couple ways around
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that. you can either go to lower cost, less trained providers, which we will do, and you can take the current providers that we have and will have, and use software to automate the routine aspects of their work. i think you'll see at omatta where the program was being used face-to-face, where a counselor might train 16-30 people, and they are scaling it to a situation where a counselor can manage 1000 people at a time. emily: i wanted to take a few moments to do a lightning round. and i am going to mention a few different technologies. and i would like to know if you might train 16-30 people, and they are scaling it to a think within 10 years, will it be ubiquitous or really mainstream? first of all, what are you wearing on your wrist? esther: i have a fuel band, which is out of production. i love it like the apple watch. and then i have a job on, the battery is dead. and i am about to buy an oura ring from finland that is the
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best consumer sleep monitor. as far as i can tell. emily: you are all in. i am not wearing mine. i do have some in my drawer. you are not wearing yours. will everybody be wearing health tracking devices in 10 years? esther: everybody sort of of the top 60% to 70% in some form. they are going to have to become much better, more seamless. the exciting thing will be real-time glucose monitors for anybody that needs them. emily: are you invested in this? robert: i would say i wear them during workouts only, trail running with elevation and stuff. i think we will all be wearing or carrying sensors that we do not carry today or did not carry 10 years ago. most phones are now capturing your activity. if you think broadly in terms of that, i think the vast majority people will be sensorized. emily: what about chips in our bodies? is that going to happen?
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esther: not in 10 years. but very easy. robert: for a certain percentage of people, but not for most of us. emily: in our clothes? robert: for a minority. emily: genetic sequencing for all? looking at you. esther: yes. it is like getting your blood type. emily: will that happen when you are born? i mean -- esther: or before you are born. and then more interesting, you will also be sequencing your tumors or whatever weird things happen. robert: i think definitely a significant percentage of the population will get sequenced whether it is -- not to get technical -- xl or the entire genome is another question. costs are driving that almost an inevitability. emily: ok, how about a replacement for antibiotics? i don't know if we are getting too scientific. robert: no. emily: no? why not? robert: in the next 10 years? there are other approaches to treating infectious disease, but
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i think the bigger concern for infectious disease is resistance that will require new agents. i think you are going to see more drugs because the bacteria are winning in some areas, but i don't think we will get rid of antibiotics. esther: we are going to do lots of other things including sterilizing the infectious agents like mosquitoes. there'll probably be, like replacing antibiotics, some of them will no longer be useful is the bigger problem. emily: instant medical test results? esther: already exists. robert: continued. yeah, i think convenience, especially in the u.s., as consumers bear more of the burden with high deductible plans. convenience pricing and the ability to see the data yourself will become more important. the technology exists. emily: what about instant blood test results? robert: yeah sure. emily: that is what theranos was trying to do. esther: sure. emily: everybody wonders if it is possible.
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emily: coming up, ridesharing officially arrives in china this week with the government formally legalizing this. how they stand to benefit. this is bloomberg. ♪
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emily: ride-sharing in china just got greenlit. the chinese government plans to legalize car hailing services in november, benefiting companies like uber and didi. the lock clears a regulatory uncertainty and lays out a new framework which allows them to operate in the country. it was previously a gray area with drivers being detained by police. peter elstrom explains the details from the bloomberg tokyo bureau. so peter, not surprising that these businesses would be operating in a legal gray area, like so many other businesses, but how in particular has this law changed? peter: well this is a significant decision because you have the world's second-largest economy saying in a stroke that ride hailing will be legal within the country. this comes while there are regulatory battles are being waged across the rest of the globe, from europe to the united
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states. for the chinese government to say that right hailing will be allowed and legal is a significant step forward. as you mentioned, the market has a lot of potential for both didi and uber. uber has said it is the most important market. that's not just because of the size of the market, but also because china is wrestling with significant issues of congestion and pollution. and the government is now saying that ride hailing will have a central role in trying to address some of those problems. emily: interesting development, dan loeb is now backing didi as well. he also commented in his annual letter that being a money manager for the year has kind of been like game of thrones. this is a company that that is now back to buy apple, alibaba, tencent.
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can uber overcome these odds in china? peter: you are right, it is interesting to see dan loeb joining in. uber is far behind in the china market. didi was formed of the consolidation of the two largest players at the time. they have been able to gain momentum within the market. they have very high market share both in the taxi market as well as well as the private car market. it is a brutal battle of competition. both countries have been spending billions of dollars on subsidies to draw in drivers and and also to draw in riders. one of the key things in the legislation is that the government is saying you cannot charge less for a ride than it costs. it is not clear how that will be interpreted, but it may mean those subsidies come down and that may change the playing field. emily: i understand baidu earnings just crossed. i am taking a look at the headlines. but what are the highlights to you?
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peter: the company missed on revenue and on earnings. you know, it is a challenge for the company. they have been described many times as sort of the google of china. the issue for them is that they have not been able to evolve beyond that core search business and the way that google has really in the u.s. or other markets. in china they refer to bat, or baidu, alibaba, and tencent. the market cap is $50 billion, a little more than that. alibaba and tencent are about four times bigger. baidu has to make up some ground here, and they are facing challenges on the advertising front, particularly because of these new regulations that restrict exactly what kind of ads they can run. emily: bloomberg's peter elstrom from tokyo. that does it for this edition of the "best of bloomberg west." we will bring you all the latest in tech throughout the week. tune in on tuesday when we hear from roger. this is bloomberg.
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♪ >> it is 8:00 a.m. in tokyo. first major markets open after investors disappointed by japan's stimulus. this is "daybreak asia". ♪ dealing with debt, preparing to sell assets to lift its credit rating above junk. >> chinese investors buying caesars online gaming unit in a $4 billion gamble on mobile. >>

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