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tv   Best of Bloomberg West  Bloomberg  September 25, 2016 6:00pm-7:01pm EDT

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emily: i am emily chang and this is the "best of bloomberg west." we bring you all the top interviews from the week in tech. coming up, apple's plans for a self driving car back in the driver seat. does it tight up with the formula one mclaren, make sense. how about electric scooter maker lit motors? liftoff for gopro, this week the company unveiled the drone, he -- the ceo nick woodman explains why this is the product to get his company backed on track. linkedin out in the first major out with their first major product line since the deal with microsoft.
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we hear from jeff weiner in an exclusive interview. a flurry of reports this week attempting to look under the hood of apple's secretive car plans. people familiar with the matter say the iphone maker is seeking a strategic stake in mclaren, a british luxury car brand, known for formula one racing and sports cars starting at $200,000. the financial times reporting that apple may want to buy the company outright which would likely be the biggest acquisition since the $3 billion buy of beat. mclaren denied they are talking to apple and the ceo said i can -- told us "i can confirm that mclaren is not in discussion with apple about any potential investment." we also learned apple is on type to drive lit motors and a bmw and audi are also in hot pursuit. remember, all of this is a secret, apple never acknowledged the existence of car plans, the so-called project titan. we caught up with auto industry analyst and bloomberg columnists
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ed niedermayer in portland and mark gurman here in san francisco and and another reporter on the phone from chicago. >> we know apple is in talks with mclaren for some sort of strategic investment which would meet -- mean bringing cash into the business, taking a percentage of the company and this would allow apple to really choose one of two paths they are considering for a car, either building their own or partnering with another automaker and giving them the apple platform. by partnering through an investment with mclaren it opens up the door for future apple-mclaren lynn motors is -- tieups. emily: lit motors is interesting. we looked at this company in 2014 and interviewed the ceo, it and -- is an electric scooter company. why would apple want a scooter company? mark: after speaking to people familiar with the company we learned that they are really proud of their patent portfolio and have over 10 patents specific to self driving and one
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of the components of the project titan car project is a self driving system so the company and their patents combined with their engineering resources and people would be able to assist apple with that. and of course, self driving -- if you are building a self driving car the system behind it is critical. emily: of all of the carmakers out there mclaren is not electric or not into mass production, what do you make of both of these potential deals? >> mclaren has been moving toward electric and hybrid technology, so that is part of the picture here. i actually think this is interesting because apple is not getting into cars to be another car company. if they are going to make this giant step into this challenging and often times intimidating business they have to do it with a fresh sheet of paper and be able to bring a new value
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proposition to mobility rather than just making a car. i think what both of these companies sort of reflect -- the fact that apple is interested in them is looking at it as a long-term thing. i do not think apple wants to put their badge on mclaren or make a version of this self driving motorcycle. i think they want to acquire patents but also r&d capabilities because they want to take a high end cutting-edge approach to developing their own vehicles whatever they end up being. emily: there is obviously a lot we do not know, how are you sizing up this news especially given that cars in general are a low-margin business and we have no idea what apple is working on. >> good afternoon and thank you for having me. i come from the world of stock as a stock analyst the gross
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margins and the profitability is something i focus on. for us on the street it is everything so you are absolutely right. short of apple getting out in -- a full-blown car end ted end getting in this tough business, i think any other initiative that would help the margins and help the top line would be welcomed by me and my peers. i think ed touched upon some very interesting points and i agree with him about the ip about the technology and remember when we step back and look at what is going on with automotive cars i cannot think of any particular sector of the global economy that is witnessing amazing transformations, whether it is self driving, electrification, infotainment, intelligence, i cannot think of any other thing.
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i think apple is putting a stake here and they are looking at it over the next 5-10 years and is -- as the other two gentleman pointed out, you could have some very interesting and almost innovative outcomes beyond our normal sense of thinking of a typical car. emily: there's a lot -- there has been a lot of upheaval within the organization at project titan and we reported on layoffs and that perhaps plans have changed. what is the latest we know in terms of what direction apple is really going in here and the the status of the chart essentially? mark: when apple started working on this a few years ago between 2013 and 2014 it was run by an executive named steve sadowski. he was a former engineer at ford and he came to apple and worked on many iphone, ipad, ipod generations and he was focused on building a car. bob mansfield who retired in 2014 returned upon sadowski
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leaving. he organized the entire titan organization into three components, sensors, hardware, and software. with those components you could theoretically see apple building a car platform rather than just a car and now under mansfield's leadership apple has two different rows where they can go. they can make their own car start to finish or build a platform to sell to other automakers. we do not know what apple will ultimately do and that will be exciting to see in the years ahead. emily: thank you so much for weighing in. ed niedermayer in portland our bloomberg view columnists, thank you all. turning now to a story we have been following. eu competition commissioner is meeting with u.s. lawmakers defending a controversial state aid ruling that would require ireland to collect more than $14 billion in back taxes from apple.
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critics say vestager's is unfairly training her sights on american companies. something she denies. david gora asked her about those claims. margrethe: i do not have control over taxation. what we do is to enforce legislation that goes all the way back to 1958 because our founding fathers thought we should have merger control antitrust, and saving control in order to have a level playing field. david: apple says it paid a tax rate of 27% and the estimate you have is five thousandths of a percent. why is there estimate so different? margrethe: the numbers we have are obviously apple's numbers, because when we do this kind of work we build on the information we get from the company. i hope that we will be able to publish as much of the decision possible.
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it is now in the hands of apple and ireland if they want to redact some of the things in the decision if they find them to be confidential. i think it is best for everyone to put out in the open the decision because then you can check as well as anyone else. david: you talk about redaction. i wonder how difficult it is for you to get your hands on data from companies like this. how forthcoming are companies with this kind of data? margrethe: one of the ironies is it started with a question asked in the u.s. senate because before then none of this was public. state aid control has been public ever since the beginning. the secret was the apple data and the two taxes in question. -- tax rulings in question. david: what has the level of dialogue been like between dialogue been like been like ---- your office and apple? margrethe: i would say it was frank.
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the case works as a relationship between us and the irish government and the cooperation has been constructive and open. we disagree on the result of the decision, but to enable the cooperation to take place i think they have been accommodating. david: are there other companies that could face penalties like this or larger? margrethe: the size of the unpaid taxes is a reflection of the size of apple. if you had smaller companies it would be a much smaller number even if they had been able to do the same things. david: you met with jack lew and on twitter you said it was a good, frank discussion in d.c.. the treasury department submitted a white paper ahead of the decision and wrote a letter to the commission as well. are you optimistic there will be middle ground with the treasury department and how would you characterize your relationship with them right now? margrethe: i think we will continue to disagree on the decision also because of the
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fact that we have very different legal traditions. i have learned that in the u.s. it is absolutely the order of the day for a business to negotiate tax breaks with the state where it is situated and we had the provision to do that back since 1958 so you have a clash of understanding about how this should play out. emily: that was eu competition commissioner margrethe vestager speaking with bloomberg's david gura. in this week's funding board of the right hailing app grab just gained money from investors. that bumped the evaluation north of $3 billion. this is the largest ever funding round for a southeast asian consumer tech company and the -- and it is the latest example example of how asian right -- right hailing services are aiming themselves to fend off uber. staying with car tech, china's internet and consumer tech
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conglomerate lee echo raised money to create the first sports car. they say they got a handful of chinese investors for the project including legend holding. last month another company called wm motors said they raised a billion dollars to prepare to challenge tesla. still ahead, ceo jeff weiner is announcing linkedin learning this week. hoping it brings a boost to the top and bottom lines. and is india oracles next frontier. the ceo shasha katz tells us about her ambitions for that growing market. this is bloomberg. ♪
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emily: mark zuckerberg and his wife, dr. priscilla chan, are pledging to spend more than $3 billion over the next decade to work on curing disease. the facebook ceo took the stage at a chan zuckerberg initiative event on wednesday. mark: this is a big goal and we thought this was really
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aggressive when we got started. we spent the last few years going out and talking to dozens of top scientists and experts who really believe this is possible. emily: surprised guest microsoft cofounder bill gates appeared on stage to support the program. it will be led by narrow scientist corey bartman. after the birth of their daughter mark zuckerberg and priscilla chan pledged to put 99% of their wealth toward philanthropy. linkedin held the big fall product launch in san francisco this week, the first since microsoft snapped it up for $26.2 billion and they announced it is getting into the education business introducing linkedin learning. the service will bring training classes to the user base and i caught up with the ceo jeff weiner in an exclusive interview after the announcement and asked about coming integrations with microsoft. jeff: helping our members stay connected and informed is one of our central value propositions and that is the foundation of
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our flagship application both mobile and as you mentioned today we will be redesigning the desktop as well, investing we are continuing to invest aggressively and create the most relevant news feed possible. messaging makes it much easier for people to keep in touch with their network. people reach out with the people they want to do business with and that overhaul relative to the prior inbox we have seen very material lift, over 240% year-over-year growth so these things compound to lift engagement. emily: let us in on what it is like to plan for an integration like this? jeff: there is a lot of clarity in terms of the value that can be generated. leveraging the unique assets come identity assets. some of our business applications and to integrate that as seamlessly as possible on top of microsoft's footprint of north of one billion users, one of only a handful of technology companies that reach over one billion users. we have been working with the outlook team, the windows team,
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the office team, the dynamics team to think about what is possible and prepare so that when we close we can hit the ground running. emily: what integrations should we expect to see first? jeff: i would not predict first in terms of chronological order but the areas we think makes -- make absolute sense is integrating linkedin identity assets within outlook.com. so when someone sends you an evil you know who they are and if you are less familiar you can add them to your network and if you are already familiar you see if they changed a job or changed company or what they shared recently, it brings the inbox to life. there is some really interesting stuff we can do with windows integration in terms of the activity center and notifications and we would love to integrate learning aspects into windows and office and dynamics with regard to continuing to differentiate business applications that are generating real momentum on microsoft through leveraging sales navigator, things we can
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do with recruiter in terms of human capital management, those are the areas of focus. emily: the idea is for linkedin to remain largely independent. sort of like facebook and instagram. how do you expect this to work in practice and to affect the culture of linkedin? jeff: from day one it was said it is important to continuing to grow linkedin and realize our mission and accelerate the mission and vision and both teams are aligned behind that objective and that makes it a lot easier. it is also made easier -- to your point about culture, that is a lot of times where m&a goes off the rails because you have those coculture's misaligned. in this case the underlying companies are already naturally aligned in terms of being mission driven. the ceo has been very mission driven in terms of creating a sense of openness and the speed and agility required to make
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that happen. along those lines with the a lot of alignment. emily: this deal surprised at the markets and a lot of people and you managed to keep it under wraps. it kicked off a wave of m&a and speculation about more, have you had executives coming to you that may be rethinking their desire to stay private versus essentially tying up with someone? jeff: i think it is the same companies that were private and they have reasons they want to stay private. i do not know that consolidation room -- played a role in that. this debate goes on and off cyclically. in terms of increasing consolidation i think we will continue to see that trend and i think it is less about public and private and more about the competitive landscape and the importance of scale over time. i think we will see more rather than less consolidation.
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emily: where do you see more consolidation? you are the first big social network to go for m&a and there is a lot of speculation about twitter. where do you see more? jeff: if i had to predict i would look more at the acquirer front than the companies being acquired and you have a lot of activity taking place within enterprise interestingly enough and i think business applications will increasingly be used to differentiate these huge cloud offerings. it is highly competitive and i think innovation there and some of the consolidation will be good for all customers. emily: our exclusive interview with linkedin ceo jeff weiner. coming up the u.s. government paves the way for driverless cars to hit the road. we discuss where innovation goes from here. and a special programming note, bloomberg is teaming up with twitter as the exclusive streaming partner for the 2016 presidential debate starting with the first debate on monday. tune in on debate. twitter.com or follow be politics.
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this is bloomberg. ♪
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emily: the u.s. government is paving the way for automotive vehicles to hit the open road. a framework released by highway regulators on tuesday says cars will need a 15 point checklist of safety features. showing for example how their virtual drivers will function, what happens if they fail, how to have been tested. in an op-ed for the pittsburgh gazette, president obama threw his weight behind driverless cars as a way to save tens of thousands of lives saying that 94% of traffic related deaths are the result of human error. we caught up with nhtsa administrator mark rose can cash -- mark rosekind on the new guidelines and asked how they will in short driverless cars are safe when they hit the market. mark: if you look at the policy we released today the first part is guidance with a 15 point safety assessment. it literally lists the 15 areas we expect manufacturers and
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designers to look at as they design, test, and deploy these vehicles. we are looking at trying to build safety into the front end of the design rather than the usual department of transportation head nhtsa which is reactive and only waits until someone gets hurt or killed. safety in the beginning is a new proactive approach. emily: it is interesting because the companies making the cars have completely different views on what is safe. for example tesla is pursuing a semi-autonomous model while google believes that can be confusing and is pursuing fully autonomous model. do you have a view on what is safer? >> thank you because you just represented the full range of innovations out there and we are so early in the development of this technology that really nobody knows what will be the safest and that is why this policy basically identifies certain performance objectives we expect manufacturers to attain, but we do not tell them how to get there.
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that means we are opening them up for all kinds of innovation to look at new safety mechanisms to save lives on the roads. we are waiting to see what will be the most effective. emily: at what stage will regulators need to tackle issues that go beyond this like insurance and liability and who is at fault when something goes? mark: the second part of the policy is a model state policy. it addresses the states that are responsible for the human part of the driving, they have liability insurance concerns and there is a specific recommendation to start a commission that will look at liability insurance for how the state should address that issue. emily: how pervasive do you think self driving technology will become? mark: we hope pervasive because it represents great lifesaving potential and we already have these different levels and we love to say it is a great future, but it is being created in front of us. we do not really know what the
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future will look like, it is truly being designed and innovated right now as we experience it. emily: when are you think it will become pervasive? do you think the driver's license will become obsolete for example and if so how soon will that happen? mark: the pervasive part i hope as soon as we can get it safely on the streets because that means we can save more and more lives. i am not sure driver's licenses or people who want to have their own hands on the wheel with the top down on highway 1 in california. i am not sure that will ever go away. emily: how involved are companies like google and tesla in helping shape the guidelines. did you consult with them and how often? mark: we consulted with a wide range of people. we had an open public meeting in washington and in open public meeting in silicon valley and stanford, california and we had almost 50 speakers and dozens of people who submitted stuff to a public docket. we interacted with safety in --
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advocates, manufacturers, tech companies, academics who do research, a wide range of people. the other part is the policy out -- but we have a 60 day comment period. and other steps over the next month to make sure we continue to learn to make a commitment to annually update the policy. emily: that was nhtsa administrator mark rosekind. tesla is updating the software in cars after chinese hackers managed to break into the model s control system and taking over the car locks number breaks, and turn signal and winter wipers -- windshield wipers. the company said "a and the cash realistic estimate is the risk to the customers was very low although this did not stop us from responding quickly." tesla said it took 10 days to fix the security vulnerability. gopro is unveiling the long-awaited camera drone this week, is it enough to boost sales? our interview with the ceo is next.
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if you like bloomberg news check us out on the radio. you can listen at bloomberg.com or 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. go pro handed out a lot of new products, including karma. it'll go for $800, fit in a backpack, and feature a game-style controller with a live feed of drone's view. go pro also had a waterproof version of its hero line. so why is this a big deal? the hero 4 had been criticized for being late to market and overpriced. gopro went down 80% from its october 2014 high. analysts have been viewing today's product of and as a
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pivotal moment. we sat with the gopro ceo nick woodman and asked him how the drone will help the business. nick: one of the things that gopro is known for is its versatility. it is the same phenomenon that has benefited the sales of our cameras. that is customers buying and using our products to a number we have not even dreamt of. emily: talk about some of the use cases you foresee. nick: well obviously, consumers will have a blast using karma and capture their lives in a whole new way. whether it is aerial footage or handheld footage or footage mounted to their body while skiing or biking, people will be able to capture their lives with such professional quality stability that they are only used to seeing in film and television. it will be a major breakthrough.
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we think we are entering a new generation of consumer content. gopro's have already won emmy's for their contribution to the television industry. we expect karma to improve the quality of footage that film and television producers are able to capture. and as i said before, i think karma is so capable and versatile, whether you're capturing aerial footage, handheld footage, or are mounting karma to a vehicle or piece of equipment. i think we will see people use karma to study shock absorbers in the automotive industry to improve the performance of those products. across the board, karma will be used for a ton of interesting applications. emily: what is the expectation of sales here? nick: time will tell. i do think karma hits a sweet
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spot. with existing gopro customers. we have millions -- over 20 million gopros sold since the introduction of our hd hero in 2009. and karma is compatible with hero 4 cameras and with the new hero 5 cameras. i think we have a terrific user base that will get a lot of functionality out of karma. we also think we can expand our markets in professional capture in film and television production and in industry. emily: let's talk about the cameras. there is concern the action camera market is saturated. there is a better camera on the iphone. how is that impacting your expectations with the hero five and the session? nick: the truth is that in the consumer rate of purchasing gopro from best buy, target, walmart, the local ski, surf, and bike shop, consumers have
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been buying it more than ever. so when people say the demand for gopro is waning, and the market is saturating, we just don't see that in our business. and these are consumers buying hero 4's that are two years old. when you consider a hero 5 can upload to the cloud. it has incredible stabilization to the camera itself. there are so many additional benefits to the user that we think they will buy hero 5 that much more frequently than hero 4. emily: we are also seeing new phones shooting in 4k video and are water resistant. those that make you worry more about cannibalization? nick: no, because video resolutions are important, but it is a tech spec. speed and feed. what a consumer is really after when they buy a gopro or any
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camera is they are thinking about the story they can share. that is what is so exciting about the products we announced. gopro is now an end to end storytelling solution. it is not enough to just enable the capture of great moments. gopro now enables people to automatically upload those moments to the cloud, so they can access them on the phone. using our mobile app to quickly create a story they can share. gopro is a storytelling solutions company. emily: there was a lot of buzz around gopro as a media company. that seems to have cooled. is that still your strategy? nick: our vision remains the same, which is as we enable people to more regularly capture and share great stories, so grows our opportunity as an entertainment company. gopro really is a brand by the people, for the people. we think our prospects in entertainment are directly
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linked to that. when we do our job, reach our primary vision of helping people capture great stories, which i think we unveiled that solution today, the results of that is our customers capture and share more compelling content at much larger volumes. and we can redistribute that as gopro entertainment. so the vision remains the same. emily: gopro is often talked about -- we have to ask -- as a potential acquisition target that google might be interested, apple or sony -- is this something that you have given thought to? nick: not a lot. we have a terrific vision for the company. if there was an opportunity that dramatically helped us accelerate our vision and realized gopro on a massive scale that we were not able to alone, that might be something interesting. but we are doing such a great job of executing against our vision ourselves, we are excited as a standalone company.
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emily: talk about your ip portfolio. how many of your products are patented, and how do you think about ip in general? nick: ip is extremely important. we have a really robust program. we are filing more patents every year. it is something a few years ago we were light on. as we look towards the future and recognize how important this will be, we invested heavily. we are proud of the momentum we're making. emily: software has been a big kink for gopro. you are unveiling cloud storage today, but what else are you doing to address it? nick: we have done it. we have dramatically improved leadership of our software teams and built out teams capable of realizing the vision we have for software. that is helping people make and edit in minutes or seconds versus hours. we are trying to eliminate the computer, the desktop computer, from the editing equation.
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we realize customers want to capture an experience and then want to be able to edit that expense on their phone and then move on with their lives. you saw today the fact that gopros can now offload to the cloud. and we have a quick key sd card readers for phones, which lets you move content to the phones quickly. and the app, which produces really compelling video. we have done it. so i do not think software will be a problem. emily: gopro's ceo nick woodman speaking to us after the new product's unveiling. coming up, oracle is doubling down on the cloud, proclaiming "amazon's lead is over." our interview with oracle's ceo mark hurd and safra catz next. this is bloomberg. ♪
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emily: oracle is betting big on
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the cloud. the company made a slew of announcements this week during its open world conference, positioning oracle to compete with the amazon cloud business. larry ellison proclaimed cofounder "amazon's lead is over." cory johnson spoke with oracle ceo mark hurd and safra catz. mark: because of cloud, we get a chance to go into what you might traditionally think of the midmarket, small and medium business, that we never would have had the opportunity to go into. you have these companies now that have the opportunity to get the best and most advanced technology in the world with no i.t. staff. they do not need hardware, they do not need a data center. and some of the companies around us here -- pandora, lyft, etc. -- that started with the same technologies of the most sophisticated companies in the world using the cloud. emily: that was cory johnson with mark hurd. he also spoke with safra catz.
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take a listen. safra: india is a phenomenal opportunity. as big a contribution india was in the past quarter, i personally believe the potential for us is 10 times what it is now, because the market is so enormous. today, we had the chief minister maharashtra said the state alone had 110 million people. can you imagine? and so many of them still need technology and the opportunity for so many young people to adapt and pull in technology and become consumers. it is just an enormous opportunity. cory: and the focus on india -- i know you have been there personally. you have put a lot of effort into this. is there something about where oracle is focused on the cloud and where india is now that it can happen now?
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safra: with cloud technology, you can deliver much more quickly and at a much lower price. both of those things are very important in india. because you can scale fast. and they are on a very short timeframe. the chief minister wants to have things up and going throughout his stay in four years. not 15 years, like plans usually are. and for us, we can get everything going in the next year and be delivering to the citizens right away. and additionally, what cloud technology allows you to do is benefit from the massive economies of scale. of not only oracle's global infrastructure but of india and that infrastructure, that size. it's a match between what they need to do to empower their citizens and the technology we bring is a perfect match. cory: i imagine the size of the business is different that you can address, because you can get
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them online fast. safra: absolutely. first of all, you can handle industry from all sizes. very small farmers in remote villages all the way to some of the largest industrial companies in the world are in india. so we can scale all the way to full with the cloud. cory: there is also a governmental digitization strategy. safra: what is amazing -- and i will tell you, what got me originally started was prime minister modi came here to silicon valley to talk about india. digital india. i saw a real vision and real ability to bring everyone forward. so i said i have to go. in february, i was there. i met with the prime minister. i met with the chief minister and many other officials. what i saw was real unity in intent.
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they had a vision of what they wanted to happen. they were going to make it happen. they knew that oracle could make a new reality. cory: in the world of software now, is the database the center of that for all of those companies? safra: well, what everyone is really talking about -- cory: i realize i'm asking the ceo of oracle -- safra: well you see, the database, that is where all of the big data, the iot, all of these things go somewhere. their foundation -- our platform as a service -- is the database. but we have all the analytic tools. we have the infrastructure under it. we had the applications above it. so though it's our foundation, it's not all there is. there just so many new technologies that are enabled with this type of foundation that enable your mobile phone, enable sensors, enable analytics
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and much better decisions. emily: major stumble for yahoo!'s core business ahead of its $4.8 billion acquisition by verizon. the company confirmed personal information of more than 500 million users was stolen in a 2014 attack. yahoo! believes the attacker is state-sponsored, though an internal investigation found no evidence of such an attacker now. the stolen information includes names, e-mail addresses, passwords, possibly security questions and answers. if it sounds familiar, that is because last month, yahoo! said it was aware of reports that 200 million user accounts from 2012 were up for sale on the dark web. what does it mean for the deal? verizon said it was just told of the data breach and it has limited information and understanding of the impact. we caught up with the head of threat research in washington and michael borohovski, the
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cofounder of tinfoil security, for more. >> this is the largest number of records stolen in any breach of the history of the internet, presumably. the other big thing that stands out is we said took two years for them to figure it out or find it here it is true, but when you have a state-sponsored attack like this, one thing they are really good at is hiding their tracks. when you have an individual trying to attack a company, they have one main goal. steal as much as i can, build dossiers quickly, then sell it. they want to fence it. but when you have a state-sponsored attack, their motives are presumably not to make a quick buck. their motives are more sinister or at least deeper than that. so they are good at hiding their tracks and persisting within the network. it's hard to find this out until such a point you accidentally stumble upon it. because they have hidden their tracks so well. so i think the fact that they
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found it now is a good thing. whether or not the state-sponsored attacker is still in the network now is still up for debate. it doesn't mean they are not there. they just have not found more evidence. emily: what do you make of that contradiction that there is no evidence of a state-sponsored attack? alex: i actually very much agree with the other guest at this point. to say that it is state-sponsored or not -- everyone says that there was compromise by a state-sponsored attacker. or an advanced persistent threat. honestly -- yahoo! obviously knows more than we do, but it is a common thing to claim to absolve yourself of some responsibility. further, i would go a step further and say that network is still actively compromised. because of the breadth of business that yahoo! does, their
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attack surface is basically infinite. and it will be impossible to ensure anybody that whoever compromised the network is completely out. emily: so you mentioned this could be some sort of excuse. do you believe that there may have been some sort of negligence involved or that this could happen to any company, especially one as big as yahoo!? alex: i think it can happen to any company. there is a certain amount of truth that you cannot really defend yourself from someone like russia or china. in 2010, google succumbed to operation aurora, a chinese sponsored attack. so i would not go so far to say there was negligence involved, because it is almost an intractable problem. china and russia can outspend whatever your defense budget is by orders of magnitude and eventually, they are just going to win. i think it is unfortunate yahoo! has gotten hit this way twice in the last few years. i also think the timing of this
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is rather suspicious. emily: still ahead, as amazon and uber encroach into european turf, local startup delivery hero says they don't stand a chance. this is bloomberg. ♪
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emily: amazon and uber are expanding their delivery services in europe. so how does berlin-based delivery hero respond? "bring it on." delivery hero is seeing sales grow more than 50%. bloomberg's caroline hyde caught up with delivery hero's cofounder niklas oestberg. they expect business to suffer as uber eats and amazon encroach on his home turf. niklas: i think we are proficient. we make most orders in the
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world. we are the largest payer per user on restaurant orders. we have done this for many years. i think there is learning we have done that they will have to do. we have the capital. we have all that is needed to really do it well. and this is what we do. this is what we focus on. this would never be the key for uber. uber would be car sharing. it would be the second leg. amazon, this would be the second or third leg. we have the benefit that we can be very targeted in what we are doing and specialize in delivering food. caroline: what about the amount of competitors that can survive in each city? say a city like berlin in germany. is it two? is there space for three? niklas: i think it is very hard for someone to come in at a late stage and make it sustainable and profitable. they may still try. you might have amazon and uber. i think it is hard to be
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sustainable for someone coming in so late. we then -- if someone else can come and make profit there, let's see. right now, we make profit in the u.k. we grow very fast as the number two. if that can be improved by any other competitor, but maybe take away can also be profitable in germany. caroline: one of the confusion that surrounds delivery here is if it is or isn't a rocket internet company. explain to us exactly how you fit within the rocket internet space. niklas: we build a healthy business. at some point, we want to take on more capital. rocket came on board as a very good shareholder to us. but it was important for us to make sure we don't lose what we have.
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we keep what we have in the culture and the business, while at the same time, leverage the value they can provide. therefore, i think we have found a healthy dynamic with a very good investor. i think we still operate as an independent company from rocket. caroline: when you look at rocket internet, its business model -- about to have its earnings out -- is it a force for the future? niklas: i think delivery has become a very important part of their business. for good and for bad for them. partially that we do not discourage that financials. it will make it hard for them to tell what we do and how well we are doing it. but of course, it is probably the most important asset in their portfolio. one that is not closely linked to rocket itself. but i think they are in a very strong position, particularly at a time they go public, will be a good moment for rocket.
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caroline: so you are not worried they will have to mark down valuations when it comes to your business? niklas: i will be very surprised if they do that. we have grown fast in a percentagewise. we move their profitability from massive losses to probability in six months. so i think it would be very strange if they want mark it down. i think there is more opportunity to mark it up. caroline: are you optimistic about the surrounding technologies around the world to raise funds that fast? niklas: we have capital and are very close to the profitability as a group, including fedora. i think we have the position to continue to run a healthy business. spend more if we have to, spend less if we do not. it is the opportunities.
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for us, the whole market is a bit less relevant. and also the ipo timing. we choose the time because it is right for the company, not to raise capital. caroline: next year? niklas: we have not said when we will do it, but we will make sure that when we feel like the time is right, we can very quickly go. emily: and that does it for this edition of the best of "bloomberg west." we'll bring you the latest throughout the week. tune in next week. we will interview nasdaq's ceo robert greifeld tuesday. this is bloomberg. ♪
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♪ >> ok good ministers prepared to meet in algiers. saudi arabia is ready to cut production to january levels. clinton and donald trump prepare for their first debate. ohio, florida, and 12 states are now too close to call. in warnings of contagion rely ands small banks more than ever on each other for funding. the rebound in resource

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