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tv   Bloomberg Technology  Bloomberg  October 12, 2016 6:00pm-7:01pm EDT

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. a month-long assault from syrian and russian warplanes has devastated aleppo, which international aid organizations they is in the midst of a humanitarian crisis. as u.s. army helicopters deliver food and supplies to haiti following hurricane matthew, there is another threat -- cholera. the world health organization says at least 200 suspect did cases of the waterborne disease have been reported. donald trump is suggesting washington politicians in both parties work together to avoid legal trouble. trump criticized the justice department is refusal to recommend charges against hillary clinton for combining personal and official business on a home e-mail server. he implied both democrats and republicans in congress went along with it. during campaign events in colorado and nevada, hillary clinton is targeting republicans who support donald trump. the campaign is trying to turn
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three red state blue. recent polling show arizona and utah may be up for grabs. local news twice for hours a day powered by more than 2600 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. "bloomberg technology" is next. emily: i'm emily chang and this is "bloomberg technology." coming up, it would be the biggest media ipo is twitter. snap gets a step closer to an ipo. amazon makes a run in music streaming. in an already crowded market, should pandora and spotify be worried? and we will take a deep dive dynamics ater them
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an ascendant chinese startup. but first, a developing story -- wells fargo shares climbing after hours after the bank announced dynamics that john stl step down as ceo and chairman effective immediately. have timny is going to sloan replace him. this move comes amid a public outcry over the revelation at wells fargo employees opened millions of bank accounts for customers who did not request them. bring in our bloomberg news reporter. he's the guy who led it wells fargo to the financial crisis. what do you make of this leadership shakeup? guest: that's a good question. we sort of solace coming in september. a $185 be announced million settlement with wells fargo over more than 2 million accounts thought to be opened without customer knowledge. been mountingas
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on john stumpf. emily: at this point, what's the real damage to wells fargo? how our customers taking the news? is this having an impact down the chain? guest: that's a good question. we haven't seen much of that. wells fargo will report earnings on friday and we are hoping to learn a bit more about whether customers are leaving the bank or picking up and moving to competitors. isfar, not a lot of that happening. it's not clear how much of this has affected the bottom line. it's worth noting that some clients have withdrawn from chicago, illinois and governments have said they are no longer doing business with the bank on some transactions.
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it doesn't look like a lot yet. be interesting to see how this plays out over the longer-term. bank has emerged fairly unscathed. they paid $185 million fine and clawed back $60 million from executives. what do you make of that that it hasn't hurt them that much? guest: when this initially came out, a lot of people tried to define and look at the amount of money and fees the bank charged customers. it was like $2.5 million and said this is a small thing. .ut it don't on itself washington dc got involved and lawmakers got involved in a ,road him down for two hearings first in front of the senate and then in front of the house financial services committee. it picked up a life of its own and built on itself and the
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scrutiny and pressure has been building. now he is out of a job. tim sloan replacing him. thank you for that update. we will continue to monitor the story and bring you any headlines. now to our "bloomberg technology" lead -- snap is said to be one step closer to a public offering. they've chosen morgan stanley and goldman sachs to lead the ipo. the recently re-banded -- marketed snap has a value of $2 billion, making it the largest social media ipo since twitter in 2013. joining me now is our ipo reporter that helped rake the story for us. perhaps it is not surprising goldman and morgan would be part of this offering. the two top investment banks. what we know so far and what are
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the details you have been able to uncover? morgan stanley is the lead with goldman collating and there are five other banks. this is a lot of the banks that helped extend this credit line in recent months, so perhaps a bit of a pay to play there. has filled its suite of underwriters and we have reported that they are prepping ipo documents, looking to go public as soon as next march. really some momentum here in terms of an actual offering. facebook not go public for eight years. uber and airbnb are still fundraising. what do investors make of the fact that snap is doing this now? they will bek paying attention to the fundamentals of the company. they are still developing
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relationships were content with the nfl and making a foray into consumer products. these things are going to materially add a the bottom line and where margins are going to be, those will be the top things investors will pay attention to. to people in ipo land on the investor side, people are big,ed to get one of these notable names. we've seen some of these smaller tech docs trade up quite a bit after an ipo and with the big name like this, you have to think there's a scarcity effect that would play into a public listing. going publica because they want to or because they have to? has it been difficult to raise money at a high valuation given they are in the early stages of
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developing the product? alex: they have tapped a lot of different funding sources whether it the equity or the credit line they have extended. decided it's they time to move on. looking at who's running the company, have some former bankers and smart folks in here. get public ready to and be financially reporting in front of investors and dealing with the quarterly cycle, that a lot of companies have been hesitant to do. but they have to stomach these decisions at this point. emily: who are the people advising evan spiegel? you reference the chief strategy officer at credit squeeze. snapchat has been through some cfos and coo.
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who is helping to march this forward? jury valero is overseeing the financial nitty-gritty. ,van is the face of the company which is an important person to get in front of investors. imran khan's experience, he was responsible for leading the alibaba ipo, which has been a biggest technology public listing folks have cared about in the past decade. when it comes down to the actual ipo and ipo readiness, you have thereect he will be in and have opinions and guidance for the company as they marched through this process, which is very involved and some companies don't like to go there because
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they can see it as a distraction. to have that kind of person on the bench with a former mattel executive, it seems like they have some guidance to help evan spiegel as he runs this company as ceo. emily: i remember running into alibaba ipo.f the a great scoop. thank you for bringing us that update. later, we will chat with snapchat's first institutional investor. now to a stock we are watching -- samsung seeing its biggest three-day stock plunge. $23 billion have an wiped off its books. samsung cut is third-quarter $2.3ting process by billion, but not all investors are fleeing. that generatedd
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a 28% return last year said samsung offers exceptional value. we have added to our position. dives into theon world of music streaming. what does it mean for pandora and spotify? we will discuss. number of china grants apple a seat on the board, but it is not tim cook who will be representing the company. ♪
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a swedish phone network company think the most in nine years -- ericsson wiping out the $.8 billion in market value on wednesday after the company blind-sided investors with its unscheduled rate on
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third-quarter earnings that missed analysts estimates. the announcement coming a week after ericsson announced major job cuts in sweden. moresaid they would need to stabilize operations. they reassured shareholders the company is not falling into a death spiral, saying it is not the beginning of the end where ericsson. we are a company that many years has been good. amazon is taking the plunge, dry -- diving into an already crowded music streaming area. amazon is sweetening the deal for prime customers with eight discount to subscription plans at $7.09 a month and $3.99 a month for users with an act of. have some -- they have expanded boost torary, giving a go ahead of the holiday shopping season.
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joining me now is our bloomberg reporter that covers amazon. how compelling the bells and whistles? i know they have tens of millions of songs. talk about the library and some script and plan and whether customers will sign up. it's a message that amazon is getting more serious about music. they've had a vanilla catalog for years and it has been subpar for real music enthusiasts. so the fact they are increasing the song catalog so much and it will include more new releases from top artists indicates they are getting more serious about the music push. pricet on the key points, comparable with bona fide but a sweetener for prime members and is the take away promotion for the go and how they are looking to bundle music streaming with the purchase of a
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voice-activated speaker. emily: a really sweet deal if ago.wn the amazon is the only tech titan that has tried and failed in the thec streaming is the graveyard is littered with other efforts. does that go make this different? go much will have been and for owners increase the potential success of this? music is the key gateway for the act go. it's difficult to keep track of all the new functions. you can did in your lights, order a pizza, do all of these things through voice commands with the." and this is a play heading into the holidays. they have introduced a low cost ago that you can attach to your own speaker. excitedt to get people about it, so the cheaper music
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streaming option is a way to get people excited and bring it at a lower price point. much of a threat do we think amazon is to spotify? there was a concern that apple music would make a big denton spotify users but it hasn't so far. could the impact spotify and what about pandora, which is going through a rebrand? you have to think of it as a long-term threat. amazon plays a slow and steady game with video where they come slowly and gradually increase their offerings. and evenl be similar with logistics, they keep adding better and faster. long-term, it is a considerable threat and the executives are watching what amazon is doing.
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thank you as always. coming up, the ceo hoping to change the game of dating apps. and we will dig into the spectacular boom and bus -- the cautionary tale of a fallen unicorn. decryptedubject of posted by brad stone. this is bloomberg. ♪
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emily: the mealemily: delivery start up muncher he is looking to replace its ceo. he said he would consider it and that other candidates are in the running. the company is said to be struggling to attract new investors in its latest funding round.
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dating at hinge is swiping left on its own business model after realizing only 15% of its matches were materializing into actual conversations between users. the company is revamping. it has done away with swiping and incorporate a new membership the. but with plenty of free competition, will it work? joining us to discuss that is the ceo. the swipe has become a fixture in the dating world for better or worse. why get rid of it? guest: we found it was the opinion of what made these apps casino games or hook up factories. it symbolized and also drove the whole reputation and culture. we felt by getting rid of that and building something new, we could get into the space of people actually looking for relationships. you released a video
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about there being a dating apocalypse. is there an apocalypse or are you just pivoting because tender seems to have the swiping market cornered? guest: i would say there is an apocalypse out there. in a world -- dating apps have become a staple of culture for this next generation. the way they affect our lives and the way they are designed to affect our lives. you can see that in the video we created. the amount of loneliness deep of feel and how objective five justified people feel by just swiping to the left toright is not conducive people actually looking for relationships. that is what we are trying to change. emily: you will be charging users seven dollars a month. i wonder in a world where people are so used to free apps, will your customers pay for this?
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do they want and he harmony or match for their generation? at eharmonyan look or match and they charge $39 or $50 a month respectively. our price point is geared at all -- at millennials for seven dollars a month. for people happy playing a game or hooking up, there are other options for them. but for people looking for something more serious and we have found a percentage of our users looking for something serious, there's no one there -- there's no -- nowhere for them to turn except for match and eharmony. emily: one of the paradoxes of the online dating world is that if you match customers successfully, they leave. how do you leave around that -- how do you work around that paradox? match and he harmony are
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marketing companies. they spend a tremendous amount of money so you come sign up. these products that are free, they build products that are effective at something and spread by word of mouth for the most part. if you look in the old world, there were only one or two players in the casual space. and okas 20 of fish cupid and nu had match and he harmony. in this new world, you have tinder at the -- you have ind -- that is the niche we are trying to fill. from athere's a quote professor in a vanity fair article that stands out to me that we are in the middle of the biggest transformation in human relationships since 15,000 bc when the marriage contract was invented and it's all because of
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the internet and dating apps. you?e future leak to of theswipe remains part dating lexicon, what happens? guest: we are already seeing signs that the pendulum is swinging back the underlay. people are disengaging from the platforms and you can the user satisfaction going down across almost all of them. i think the culture is swinging back to gather. the dating apps introduce a new paradigm and we are starting to adjust to that paradigm and developing norms. i think it will be for the better. when i started hinge in 2011, there were no dating apps that are -- dating apps out there. i was trying to have a light weight way of meeting people and overall, it's a good day but it can be refined from the swiping
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culture we have now. emily: we will keep an eye on how the revamp does. thank you for joining us. first vc, the very investor in snapchat. like bloomberg news, check us out on the radio. we are streaming now live on twitter. check it out. this is bloomberg. ♪
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mark: i'm mark crumpton. you are watching "bloomberg technology." hillary clinton's campaign manager has released a statement saying that it is clear russia
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was behind the hack of his e-mails. he said yesterday that the fbi is investigating. youran president a lot of putin says whomever is responsible for hacking the u.s. democratic party is not important. it's merely a distraction from the main issues. the philippine president has ordered his defense chief to cancel preparations for next year's land joint military exercises with the u.s. a says he's trying to chart foreign policy not dependent on washington. ecuador has granted a request from wikileaks founder julian assange for more defense preparation time. scheduled that she is to be questioned over a rape accusation in sweden. he has been holed up at the ecuadorian embassy in london since 2012. two of the most prominent human rights groups in the u.s., human rights watch and the american civilliberties they -- liberties union are calling for the decriminalization of drugs.
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they say the enforcement of drug laws has without justification ruin lives, torn families apart and you will racial discrimination. i'm mark crumpton. this is bloomberg. it is just after 6:30 here in new york and 9:30 in the morning in sydney. my colleague, paul allen, joins us with a look at the markets. paul: not much action to report. new zealand is looking very flat. whene expecting declines we open in about half an hour. when we take a look at japan , toyota andrently dq might be worth keeping an eye on. weird had and suzuki saying they might collaborate on design. big toehold in the india market, so there are some energies to be enjoyed their, but neither of the carmakers
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enjoy a terrific track record when it comes to collaboration. on cathay pacific. the airline has been struggling announcing a critical review. passenger yields have been slumping in shares are off and they could come under more pressure. a bit of data out today with china's trade balance for september expected to improve to a $53 billion surplus. i'm paul allen. more "bloomberg technology" next. emily: this is "bloomberg technology ." i'm emily chang.
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the parent company of snapchat has selected inks for its public offering. it could happen as soon as march. joining me in the studio is a partner at light speed. great to have you on the show. the story of how you discovered snapchat is amazing. knews before anyone else about it except for some teenagers. tell me how you discovered it. jeremy: we were very lucky. one of my partners had a daughter going to school at one washe places where it popular. because he is an engaged dad, he noticed his daughter was using it a lot. this was in 2011. she says there are three apps everyone has -- angry birds, instagram and snapchat. he said i've heard of two of those but not the third one, so that's how we heard about it.
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we were able to connect with the ceo and offer -- after a few conversations, he told us he was growing so fast that he could not pay his server bills and i said maybe we could help you with that. this was when facebook was looking to go public and nobody could imagine a world where facebook would not be the dominant social network. what was the discussion at the firm? was it a slam dunk or was there some skepticism around it? one of the things that is constant about technology is changed. there are always new companies and opportunities and we are frequently investing in companies going up against big incumbents. i know you can't share the details on the timing, but given that facebook waited so long, why would they want to go
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public those in? germy: i will let the company speak to that. -- i know snapchat has a broader demographic, but how do they differentiate themselves? jeremy: i think the company will be in a better place to talk about that than i am. emily: how do you make sure it does not become the next twitter? what do you see that is than some of the pitfalls we have seen twitter have to deal with? : i think for a company to be powerful, needs growth and engagement. that's something snapchat has --onstrated in spades incredible growth and incredible engagement. people use it many times a week and many times a day and that
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creates new habits. when you become a habit, when you become a verb, it's important. speaking of habits and new trends, snapchat is getting poll andware, we did a i know this is not scientific, but whether folks will buy 87% oft spectacles, people said no. are you excited question mark what makes you think it could be a hit? jeremy: evan has spoken a little bit about it. he is an amazing product visionary and i tend to believe him. he is demonstrated over and over again that he has the ability to see around corners into a future people don't see today. i have full confidence in the company. emily: perhaps it would have been different if we did the poll on snapchat.
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you have invested in a number of e-commerce companies and you look for apps trending among young women. tell me about that. jeremy: young women are the cultural carriers for society. what young women do today, everybody will end up doing three to five years from now. part of the reason is and this is a bit of a cliche, men will tend to do things with each other like go play basketball or go play golf. but women talk to each other. ability, ifthat you're product inspires other people to tell other people about it, genuine word-of-mouth, that's a good predictor that it's going to be successful more broadly. emily: what is the next big thing young women want? jeremy: there's a lot of areas where we see growth and engagement. allink e-commerce, we can
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agree we will be buying more things online in the future than we are today and there are a lot that arecompanies appealing to young women. roots,ny like hungry with packaged convenience food. there's a lot of e-commerce things that i get excited about. we will talk more about your e-commerce investments in the next block. but you were involved in apple's first original show, committing $10 million to the show. jessica alba is part of your portfolio and a mentor. i'm curious what it has been like working on the show so far and what should we expect? jeremy: shooting hasn't started yet and we are still in the process of casting the apps that will be on the show. we are looking forward to seeing what they have in mind and part
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of the job as a venture capitalist is you get to see the future through other people's eyes and we are looking forward to seeing the future these people have in mind. you have invested in some other media companies and i'm curious, given your thesis about what dog young women, you think is the future of how people consume content? people are still watching a lot of tv on tv. maybe that's just me. that's right but the trends are becoming clear. thatand more video viewing historically happened on tv is happening through other channels, whether it be mobile or through facebook or twitter. about the five and a half hours at an average american watches tv, some of that is appointment tv like game of thrones or westworld. but another portion of that is ambient tv. you cannot watch "westworld is
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quote when you are getting the kids ready. it requires too much attention. but you often have something in the background, espn falls into that, morning shows, late-night tv and a lot of daytime falls into that category. the tv osnk about players, whether netflix or amazon, they are focused on replacements. if you really believe people are , then that case for ambient tv needs to be filled. we think there's an opportunity for a new generation of content companies to really do that. emily: we are going to talk a little bit more about e-commerce coming up. but i want to get back to a building story -- john stumpf stepping down from wells fargo effective immediately. shares are climbing after hours on the news.
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the company has chosen tim sloan to replace him and stephen sanger becoming the chairman. news reporter just got off the phone with sloan. what did he have to tell you? this is asaid decision that john made and not something that lord asked him to do. he not quit, he was not fired. that's the most significant ring. why tim thinking of sloan was put -- he's really planned for this succession for quite a while and was named in november as chief operating officer. had groomed him, but it's important to note that after all these scandals, there has to be some link. john stumpf is the guy who led the bank through the financial crisis. you have legislators coming out saying he bears direct wellssibility, whereby
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fargo employees were creating accounts for customers they did not even ask for. to the bank is this long-term? long-term, we are not sure. we will hear from them on friday morning and i'm sure it will be one of the first things investors want to know -- how long is the fall going to exist and do you see customers leaving? do you think they will see more people leave? outa lot of data has come to the point where we can ascertain as details but for investors, that is the key question. onlydon't mind there was $185 million paid for a fine. for that size bank, is not a lot of money. the investors are concerned about the reputational damage and going to work, will there be customers who pull deposit and will they stop using their wells fargo credit card?
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emily: we will continue to follow this story. thank you so much for that of eight. still to come, what happens after you crash a billion-dollar e-commerce site into the ground? you moved to berlin and start over. we will dig in to the story of jason goldberg and hear how he is moving on. ♪
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to what hasng become a cautionary tale in silicon valley -- the boom and bust of fab.com. in 2013, the site known for quirky home decor was valued at a billion dollars and the ceo, jason goldberg, was feeling confident. jason: the way we look at the
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world as there are for e-commerce companies worth more than $10 billion -- amazon, rocket town and alibaba and ebay. we think we have a legitimate chance of eating the fifth one. we have more money than we need to run fab into the future. that was jason goldberg on bloomberg television just three years ago. but what came next was a spectacular flameout and remnants of the company were sold for a mere $15 million. it's a reporter told by our reporter in our first podcast episode of "decrypted. withoins us here along jeremy lu, a big e-commerce investor. what did he tell you about lessons learned? guest: jason said that this was a massive failure. he says he feels all these
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expectations and he has moved away from new york where it was headquartered and is in berlin where fewer people know him and the reputation of fab.com. he says this is something that taught him that even when people tell you that you are at the top of the world and you are going to win, you can't let yourself and leave it because if you do, you will have incredible blind spots in your business. emily: or even when he tells the world. [laughter] get a littled you bit of delirious and is and you really feel like this is something that's going to work and anyone who tells you otherwise is a traitor. invest in jason again? he they bold personality. is that a profile that appeals to you?
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a last native mine and he's always been an vicious and has had the ambition to bend the world to his will. he has taken a couple of runs that companies and sometimes they haven't worked out but sometimes you learn from failure and if you learn the right lessons, and hopefully makes you a better invest your next time. is there room for another consumer at? guest: we don't know much about it. jason wanted to get this off of his chest before he delved into the rumors about what it does. he does not want this to be another thing that gets so incredibly big and, given the personality, i will believe that when i see it but he's using some of the same engineering and he ishe used that and he saysn berlin
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he's going to try to be a little more measured about how he thinks about the future of the company. he's going to say i'm just trying to build a product and not unseat great in this market. we will wait and see how people like it. emily: you are an investor in honest company and we have seen spectacular flameout in subscription sites and we've seen big and they with walmart. unilever buying dollar shave. where is the e-commerce world will there be companies that can outlast or outdo amazon or will amazon ruin the business for everyone? : amazon is an amazing company and it can be difficult if you want to compete with them head-to-head. see a lot reasons you
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of attention around vertically honestted brands, like company and dollar shave club is that it creates a differentiator. margins andh higher much better margin integrity if you control your product and control where it is sold. historically, brands have been built off-line. one of the interesting things we are seeing is that you can build a vertically integrated online .ative rand with all the advantage of being able to iterate and find products. you can find the honest company at target -- you want to be where your customers are. emily: thank you so much for
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joining us. sarah frier on the first edition of "decrypted." you can download it on soundcloud and other podcasting apps. we will bring you the best interviews of the week, including our conversation with the stone and why he hopes twitter stays independent. tack"st of "bloomberg this weekend on bloomberg television. ♪
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emily: the information is reporting apple has a seat on the board of a chinese ride hailing giant. apple got the position a few weeks after investing in the company. alex webb joins us now. tim cook will not be taking a seat on the board. but who is this person and why are they on the board? guest: he is the head of the apple and the day team and he's a very powerful person at apple.
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banker,ormer investment but the reason i think it is telling he is taking the seat and not another executive is that it tends at what apple's motivation is. it's a financial investment, not about technology tieups. ofbe getting map data out china or trying to cozy up to the relevant authorities, sharing their investment in the country. there are still a lot of questions around will apple give them some kind of special treatment and how will it pay off other than a billion dollars? guest: frankly it is the other way around. di is well and apple is not. it's hard for companies to make headway in china, so apple investing makes a commitment to that country. one motivation people have suggested is that a gets apple
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pay into chinese users hands. there are tribal, is an observer on their board the uberhas a seat on board. graphic last a there's a huge amount of cross investment in the tech industry, automotive industry and right hailing industry. googleone has microsoft, , then there is personnel exchange where they take people --m google and apple and lyf yft has a tie and with them. everyone is in a panic about the
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future of automotive emily:. i'm sure we will be following how much more incestuous it gets. thank you for that update. we will keep our eyes on that story. that does it for this edition of technology." aboutow, we will talk playstation the are hitting the market. that's all for now from san francisco. this is bloomberg. ♪
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>> from our studios in new york city, this is charlie rose. charlie rose: we begin this evening with our continuing coverage of the presidential election. the republican party finds itself elected after paul ryan backed away from donald trump on monday. though he did not revoke his endorsement, he said he would no longer campaign for the gop nominee. the decision drew criticism from his caucus. donald trump called him weak and monday,ive or it on wikileaks revealed a new

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