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tv   Bloomberg Technology  Bloomberg  November 7, 2016 6:00pm-7:01pm EST

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at a furious space. trump is in florida, north carolina and new hampshire. clinton is rallying crowds in pennsylvania and michigan. she'll be joined by her husband and by president and mrs. obama at a rally in philadelphia. the final bloomberg politics nationwide poll has clinton with a 44% to 41% lead that includes third party candidates. hillary clinton enters the last day of the campaign after getting a welcome november surprise. f.b.i. director james comey announced sunday that the bureau found no new evidence of its review of newly discovered emails to warrant charges against clinton. donald trump said she's being protected by a rigged system. the u.s. commitment to the paris climate change accord could be affected by the presidential election. donald trump has said he would cancel the deal if he wins while clinton supports the accord. 100 nations have pledged to honor the agreement. iraqi kurdish fighters exchanged heavy fire with militants monday as they entered a town near mosul held by islamic state.
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meantime, coalition troops advancing south discovered a mass grave containing about 100 decapitated bodies. in new york, i'm mark crumpton. bloomberg technology" is next. emily: this is "bloomberg technology." the tech community chooses sides. we'll tell who you is voting who and analyze the impact of a bitter u.s. election in silicon valley. plus fire eye lighting up the markets for a second trading day. and steve balmer drops the mike. my he can cluesive interview with america's richest sports
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team owner on everything from how he drifted to bill gates to microsoft missed $55 billion shot at sales force. price line shares popping in after hours trading after third quarter earnings beat estimates. this despite the company announcing an almost $1 billion writedown of restaurant booking service open table, 1/3 of what it paid for the company two years ago. this and exa to expect from the top tech stories of the week, including the biggest story of the year, at least here in the united states, and that is the presidential election. joining us now from new york, paul of "bloomberg intelligence" here with me in the studio. bloomberg tech startup who werer and our editor at large. so we're going to start with price line. announcing this big writedown of open table. what do you make of this? >> priceline's clearly been a train wreck for them. they spent nearly 2ds billion on this acquisition and having to write off so much of it, just shows that this has been a money pit for them. they explained the writeoff just
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a little bit in the press release. they actually laudably, and all companies should do this and don't, but these guys put their 10-q out the same day they did their press release and earnings. it has a little more detail. what they say is their postacquisition strategy was, quote, premised on significant and rapid investment in international expansion. that strategy resulted in limited progress. in other words, they sunk a lot of money into this thing, they thought it would keep growing, and it didn't. that was a problem. emily: they have positive things to say about open table. we were just listening in to the c.e.o. on the call. take a listen to what he had to say. >> opentable's investments in future growth, technology flat form, which will allow it to sell more effectively into global traveler market and work on important product nhancements.
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>> brad and angelina remain enthusiastic about their relationship. it's ridiculous. clearly they've made a decision. they reported strong results. they also said, we're not going to sink so much money into this thing. we're going to take a more measure aid approach to open table growth. this is a fundamental problem with hometable. i use it like crazy. emily: i use it a lot too. >> i made five reservations yesterday for a trip to new york next week. but if you go to -- where are you from? >> macon, georgia. >> if you go to macon, georgia, do you need opentable to make reservations? >> no. >> if you go to des moines, if you go to minneapolis, if you go to -- emily: roy. you don't need opentable. >> you might in honolulu. in certain places you need it badly. in other places you don't. the international expansion is by definition, once you go et to second tier and third tier cities, it won't grow as well. emily: this is a company that's become the leader in the online market travel. but by acquisitions, that's how they've become so big. how well prepared are they to
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deal with, you know, a whole host of upstarts, whether it's airbnb or hotel tonight or all of these companies that are trying to disrupt the incumbent? >> what i would say is airbnb and hotels are trying to disrupt priceline. priceline has done some acquisitions, their biggest ones were and looking at businesses in europe, in particular, and really putting together a network. the biggest difference in the hotel business, the u.s. has networks of hotels. you have your marriott hotels, the higher ends, chains, point systems that link travelers together. you didn't have that in europe. priceline has gone through europe, linked these hotels together, put them online for the very first time, and had that real first mover advantage by creating this network. they hoped to do the same with open table. but didn't have the same success. emily: moving on to alibaba. want to bring in paul here. of course singles day is coming up. in just a couple weeks the biggest shopping day of the year
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in china, the biggest day by far for alibaba and you've got new numbers showing that sales will be even bigger than perhaps yew en., given the week >> it's going to arguably spur transactions within china. as opposed to the chinese buying abroad. so i think when you take a look at the singles day numbers, no matter what numbers you look at, the gross merchandise value of $14 billion, just a huge number in and of itself, expectations are that number's going to grow dramatically this year. so i think most investors really look at the growth rates, the trends for this company over time. and what we've seen, what investors are seen, has been a very strong organic growth rate within china, which is really the business that's funding all of the other investments around the globe. emily: that said, alibaba has been facing some transparency issues around singles' day in
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particular. how much is this really, you know, a lot of shopping happening in one day and how much of this is expert marketing on the part of alibaba? >> you're right. singles' day has become an incredible promotional event for alibaba itself. this year they have katy perry going to appear during their television broadcast, which will have a huge audience in and of itself and be a great promotional vehicle for alibaba specifically and for just online shopping in general. but you're right there. has been some accounting issues at the company. particularly as it relates to singles' day. when they report that gross had merchandise value, there's a lot of fuzzyness into that number. it's not an audited number. the concerns are that it includes sales that have not been paid for, will never be paid for, and maybe it includes some actually fake sales reported by some of the measure chants on the platform. so it's an unaudited number and i think most investors kind of aren't too concerned about the accounting issues.
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most investors look at the gross merchandise value that the company reports more for the directional tone that they set. is the growth rate still exceptional or is it decelerating? those types of things investors focus on as opposed to the absolute number. emily: we'll be closely following all the numbers, singles' day happening in a matter of days. later this week. i do want to talk about the u.s. election. 24 hours to go. >> tomorrow? emily: 36 hours to go. then hopefully it will all be over. all over. hopefully. silicon valley has spoken and overwhelmingly favors hillary clinton. >> pretty liberal place. emily: a few outliars. eric, you wrote a story back in the day about how difficult it was to find a single trump supporter. >> before peter had come out as sort of the sole trump supporter in silicon valley, i had gone around to some of the companies, there were a lot of political consultants here who have set up, even some of the ones from
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the mccain campaign and elsewhere, you know, aren't really coming out for trump. i went to the local republican campaign -- committees to see if they had any tech people who were publicly supporting trump and i just literally could not find one. now peel has come out publicly and been the tech trump supporter. but he's sort of standing alone here. they're hard to find. emily: here's my question. if trump gets elected, silicon valley spent a lot of time over the last eight years building bridges with washington. we hear about it from both sites. you've got the president coming out here, the secretary of defense. what happens if trump is elected to silicon valley, does silicon valley divorce from the white house for four-plus years? >> unlikely. you're going to have political connections to business no matter who is in the white house. you're certainly going to have it to technology and people who have probably had a history of people reaching out to people like john chambers. california's always been willing to support republicans. we've had republican senators.
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our last governor was republican. the governor before that or two governors before that was republican. emily: different brand of republican. >> this might be more about the policies about donald trump, particular policies around immigration. that are so not just virulent on an individual level to a lot of leaders in silicon valuey, but also really hard to do business internationally if you affiliate yourself either with the views or the actual person who holds those views during campaign. if that person ends up in the white house, that might be something you've got -- somebody you've do business with. emily: 24 to 36 hours to go. hopefully we all live through it. >> or so. emily: corey, eric, paul, thank you all for helping us greet the week. and a reminder to tune in to bloomberg for complete election coverage starting 7:00 p.m. in new york tuesday. bloomberg television also bloomberg radio and tune in. still to to come, fireeyes shares on a tear after its latest earnings report. we'll talk to new c.e.o. about
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the company's improving forecast and the rise of russian hackers this election season next. ♪
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emily: we are watch fireeye shares, up more than 20% since reporting earnings after the bell thursday. that's because the cybersecurity company set a full-year loss wouldn't be as bad as a few month ago. also a painful process of job cuts paid off in terms of cost savings. joining us now for more on the report and with cybersecurity top of mind before the u.s. election, fireeye's c.e.o. kevin mandia. thank you for being here. this is our first time speaking since you became c.e.o. obviously fireeye's a company that made its name investigating high profile cyberattacks. but it struggles more with the shift to the cloud.
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what do you see your strategy relying on more? will it be products or services? >> i think you have to do both. services are strategically important. one of the things we do is we own that moment when there's a serity breach, so we get to see firsthand how attackers evade technologies, circumvent safeguards and then we have the ability to adapt to that. so it's a very strategic thing. we want to own that moment. everybody says the threat has abated. we still are responding to some pretty big threats. they're just coming from a different part of the world there's days. emily: is your focus medium and small companies, large companies? >> more security-conscious companies. it is more 1-a enterprise but anyone in certain industries who want good enough security isn't good enough. emily: what do you mean by 1-a intervice pryce? >> big companies. security-conscious companies. global 1,000 and -- but in industries where you can't afford a breach. where your reputation's on the line or your information, standards, legislation or regulations, you're compelled to follow, and you have to maintain
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stalwart security mechanisms. emily: are you looking to add any missing functionality in your security portfolio to better compete with whether the palowalityow networks or others through acquisitions? >> i think it's interesting you mention the fire wall companies. every company has a firewall. but every time we respond to a breach there's a firewall there. there's an anti-virus there. it's obvious that the safeguards that people have to have don't prevent every breach from happening. that's something that's hard for people to understand when they think, wow, i have a security posture that's 95% effective. the problem srk 95% on the internet may not be that great. it scales so much. so we're the company that -- we believe that if you respond to every breach that matters, and we have threat negligence 30 country, we can bring all that to bear all the time. any time safeguards are evaded, we can adapt have a learning system, and update our customers' security to the threats of today. emily: if there's anyier of -- area of fireeye's portfolio that you would like to beef up, what would that be? >> we like to beef up all of it.
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i think we're doing the rel vanlt things. you're always innovating to what's next. soon or later more mobile than desk tops, already is by the mobile, but we're not seeinged a much threats there. we go where the attacks are. that's just it. we're global, we're worldwide. we see a lot of attacks in south korea, we see a hot zone in the united states, so wherever the attackers are going, we're going to be there with products. emily: where are the attacks going? >> right now, depends on what you do. i think if you make cupcakes you might be -- if you're an organization that's all do you, you might not be targeted. but you might get compromised. you're in media, bloomberg, i like at -- look at media. a lot of times it used to be that chinese cyberespionage targeted media. i think they've come up with rules of engagement. they've abated or lowered their threat presence. right now we're dealing a lot more with russia. we're looking at what we call a.t.p. group 28. it's a russian state actor most
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likely. they're just acting at a broader scale than we've ever seen before. emily: fireeye was involved in identifying the connection between the d.n.c. hack and russia. do you foresee greater involvement in russia, perhaps in over the next 24 hours, in the actual u.s. election, and even beyond that in u.s. politics? >> it's amazing. 22 years of responding to breaches, i feel like a geopolitical expert somehow. even though i'm just a nerd responding to breaches. you started recognizing about maybe 20 years into my career, all of a sudden all the breaches what have a geopolitical connection. if you can have no risks or repercussions to hacking the united states, do you it. right now i don't know what levers we pull with russia. i do expect that they're going to be -- i can tell you. this russian state actors are acting at a volume i haven't seen in my career. they're more brash than i've ever seen. it used to be if we respond what had we felt was the russian government hacking somebody, they would go away the minute rewe responded to the breach. they'd kind of evap wait. -- evaporate. now we're responding, they know
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we know they're there, they keep hacking every single day. emily: how likely is an attack on the election system on election day and what kind of attack do you imagine that would be? >> any attack can happen any time. here's what i think in regards to the election system. i believe it's really hard to alter the election results. you can probably discredit the results, you can do all kinds of defaming and that's just the internet's way. you never know who is publishing things. it's one thing to be able to have the capability to do it. it's another thing to exercise that capability. i think with all the experts watching the internet tomorrow, watching the results, your risk profile will changement even if you could hack the election system somewhere, are you going to opt to do it or not is going to be the question. because i don't think you'll get away with it. emily: what about -- >> they can happen every time. it's like dialing 911. emily: so if russia or whoever decides to take down election server by flooding it with traffic, that can't be stopped if it happens tomorrow. >> welcome -- i still remember back in 2000, 2001, a canadian kit shut down some of the major
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websites on the internet just doing a d-dos attack. it's not going to go away. it's the new normal. we have to be ready for it. emily: how likely is it something like that could happen? >> 58%. no, i really don't know. i've never been able to read the minds of attackers. i've been in this career a long time i can't read their minds. don't know. tomorrow could be very quiet because everybody's looking, watching. d-dos are easy attacks to carry out because you can't trace where they really come from. it's hard to get the source of those. a targeted attack to alter information, that's one that i think we'd be able to pierce anonymity on. emily: you can read your own mind. bloomberg has reported that fireeye's got multiit will takeover offices -- offers. how open would you be to a buyout if the offer is good enough? >> i can tell you this, it's my job to make sure the company executes on our plan. that's what we try to do. we stay focused, heads down, on what we want to do. if somebody's interested in us, that's for our board to do their fiduciary duty.
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emily: all right, kevin mandia. thank you so much for stopping by. we'll be watching over the next 24, 36 hours to see what happens. >> thank you. emily: coming up, sprint gives softbank an earnings boost as the japanese telecommunications company reports better than expected second quarter profit. ♪
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emily: to a story we are watching. the co-founder of chinese conglomerate has admitted his tech empire is running out of cash. in a lengthly letter to employees he apologized to shareholders and pledged to slash an income to one union which is about 15 cents. he also said he would slow their mad cap pace of ex pension and move it toward a more moderate ace of growth. what's your reaction to this?
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>> it's not a complete surprise to people who have been watching the expansion. he's been very ambitious in his plans to expand. he started out as an online video service, kind of akin to netflix. and then he's been using the cash that he got from that operation, borrowing against his stock, to fund a variety of other operations, including smartphones, smart tv's, he moved into the wuss his plans to make an electric car -- into the u.s. with his plans to make an electric car and then they did this acquisition for vizzio. the television maker. he's been very ambitious and using this leveraged approach to financing to expand there. have been people who have been speculating about some kind of potential cash crunch. it is surprising that it came out this way, where he sent a letter to employees saying that they have serious cash problems right now and they need to pull back pretty dramatically. among those, he's going to cut his salary to about 15 cents. emily: all right. i know you'll keep a close eye on that for us. i do want to turn to softbank.
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out of japan. reporting better than expected second quarter profit with local wireless and internet businesses bringing in cash for the company. sprint's revival and steady earnings in the u.s. also gave the telecom company a boost. what are your big takeaways about softbank's operations? >> typically with softbank the operations are the least interesting part of the plans. what we've seen here is that the operations are stabilizing a bit. the japan telecom operation continues to generate cash, which they've used to make investments around the world. sprint was kind of in crisis mode for a couple of years, actually, and it looks like there are signs of improvement there. they continue to add net subscribers which is a step in the right direction. revenue has declined. that spooked investors a little bit in the u.s. but the key thing here really is that softbank is now becoming more of an investment company
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and they said in the conference call that he personally is going to spend more of his time focusing on investments. they put together this extraordinary investment fund. they're trying to raise about $100 billion to make acquisitions around the world. it will be kind of an extension of softbank, let him move beyond -- they just did this acquisition for arm, the ship maker. they want to do other acquisitions that will be related to that, to take advantage of some of these tech trends we're going to see in the future. emily: what promised -- prompted his, you know, now he's saying he's going to be focusing more on investment decisions at the company. what prompted that change and what does it mean? >> i think it's partly because he has people in place now running these individual operations that he's pretty comfortable with. in japan he has one of his old hands running the japanese telecom operations. he feels like the sprint business is on the right track. for a long time he was staying up late here in toke yeah to work with the u.s. crew so he could -- tokyo to work with the u.s. crew so he could work on
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strategy and try to improve the network quality at sprint. he doesn't have to do that anymore. now he gets to do the fun stuff. they're going to look at deals and try to put together some of these operations to take advantage of the internet of things. the other opportunities that they see around the world. son has a very good track record of making these investments. he took a stake in alibaba early on. made tens of billions of dollars for the company and he'd like to do more of that. mily: all right. thank you. coming up, our he can cluesive conversation with steve ballmer, microsoft's former c.e.o. gives his thoughts on sales force, the l.a. clippers and what he has in store for his second act. ♪
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mark: you're watching "bloomberg technology." a check of first word news. tomorrow the justice department will send more than 500 election monitors to 28 states. that's 35% fewer monitors that four years ago.
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federal poll watches has been curtailed because of a 2013 supreme court ruling that gutted a key provision of the voting rights rights act. e.u. commission president says refugees can't pick and choose which destinations they prefer to be housed. he says they have a responsibility to go where there is available space. he called the refuse albie refugees from greece and italy to board planes not flying to germany, quote, outrageous. opposition parties in the u.k. are pressing brexit chief david davis to provide more details of the exit plan. davis was questioned by members of parliament. >> we are now preparing our submission to the supreme court in a usual way. it would not be proper to go into those in great detail here today. the core of our argument will remain that we believe is proper and lawful for the government to trigger article 50 by the use of prerogative powers. mark: davis told lawmakers the point of no return was passed on june 23.
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that's when u.k. voters decided to leave the e.u. global news 24 hours a day, powered by more than 2,600 journalists and analysts and over 120 countries. this is bloomberg. it's just after 6:30 p.m. here in new york. my colleague has a look at the markets. >> good morning. let's take a look at new zealand first. actually early tuesday afternoon now. we've been open here in australia as well for about 30 minutes now. the asx is also up, about .4%. it would be better if it wasn't for commonwealth bank. commonwealth bank makes up about 9% of the asx by weight but shares are off about half a percent right now. that's after the bank announced an unaudited first quarter cash profit of $1. billion. the bank -- $1.8 billion. the bank struggling with lower
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net interest margins. nikkei futures looking flat. worth watching softbank today. second quarter profit for softbank doubling to 5.1 billion dollars. nissan's second quarter profit, however, slipped 16%, so there's a couple of stocks to watch at the open. toyota will also be out with earnings later on today. in china it is the october trade balance. we're expecting that to improve to 51.7 billion on stronger imports. i'm paulalen in sydney. more from "bloomberg technology" next. ♪ emily: this is "bloomberg technology." steve ballmer has opened up on his strange relationship with bill gates for the very first
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time. in an exclusive conversation on bloomberg studio 1.0, he reveals it was his decision to move into smartphones after watching apple and android pass them by, that led to the breakdown of his relationship with gates. take a listen. >> people like to focus in on bill was c.e.o., you were c.e.o., this is kind of like my baby. my baby and bill's baby. we were growing, it, nurturing it. he was the senior partner, i was the junior partner. if it's in the raising of children, i would say he was more -- mom gets to decide more than dad. but -- so i take great satisfaction in the things we accomplished. throughout the time. not just when i became c.e.o. when i became c.e.o. we had a very miserable year. bill didn't know how to work for anybody. i didn't know how to manage bill. i'm not sure i ever learned the latter. things lightened up some. then i would say my life changed a lot in 2008. when bill actually left the company. emily: how so?
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>> bill asked me, i'm happy to help you in any way, but i don't want to you need me. so i can come and go, if you want me, great, but i have another life. in a sense, i finally felt like, ok, we're not partners anymore. i have to take accountability. i think i probably did some of my very best work at the company after bill left actually. emily: really? like what? >> pushed us into binge. sustained that investment. that's really where we got into the cloud. we started what's now office 365 . after bill left. we pushed into the hardware business with surface. etc. now my successor has sort of taken things to infinity and beyond, if will you. emily: how do you feel about being asked about your successes and failures, what you're most proud of and least proud of? >> at this stage, i'm almost three years out, it's ancient history. did i have a lot of success? yeah.
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are there some things i wish i'd done differently? of course. i started a company that had about $2.5 million in revenue and 30 people and i left a company that had $22 billion in profit and i feel like that net, pretty good success. emily: what's your relationship with bill like today? >> we've kind of drifted apart. he's got his life, i sort of have mine. microsoft was kind of the thing that really bound us. we started off as friend buzz then really got quite -- but then really got quite ameshed around microsoft. since i've gone, we've really drifted a little bit. emily: he wasn't happy about when you left. you left suddenly. what really happened? >> well, i mean, it was definitely not a simple thing for either one of us. i think that at the end of the day, there are probably two thing. a little bit of a difference in opinion on the strategic direction of the company.
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which i think is a challenge. and the number two, you know, he and i had always had what i would call brotherly relationship in the good parts and the bad parts. i think toward the end that was a bit more difficult, not particularly with the strategic direction change and the stock prices not going anywhere, so the rest of the board felt pressure. despite the fact that profits were going up. i think you had a combustible situation. emily: does it ever bother you you don't get credit for that? >> sure and no. at the end of the day, i have the great sort of confident -- comfort of knowing what i did and feeling good about myself. and everything else doesn't really matter. emily: where did you want to take the company? where did he want to take the company? >> i think there was a fundamental disagreement about how important it was to be in the hardware bills. i had pushed surface, the board had been a little reluctant in supporting it. then things came to a climax
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around what to do about the phone business. emily: sasha was on stage recently are we said, missing the mobile phone was one of the biggest mistakes in microsoft's history. what would you have done different industry in >> i would have moved into the hardware business faster and recognized that what we had in the p.c., where there was a separation of chips, systems and software, wasn't largely going to reproduce itself. in the mobile world. i wish i'd thought about the model of subsidizing phones through the operators. people like to point to this quote where i said irving phones will never sell. it's because the -- iphones will never sell. because the price was too high. there was business model innovation by apple to get it built into the monthly cell phone bill. we should have opinion in the hardware business -- should have been in the hardware business sooner in the phone case and we were still suffering what i would call some of the effects of our vista release of windows. which sucked up a huge amount of
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resource for a much longer period of time than it should have. because we stumbled over it. when you have a lot of your best engineers sort of in a sense being nonproductive for a while, it really takes its toll. emily: would you have bought nokia? >> i wanted to buy nokeyafment the board at first disagreed with that -- nokia. the board at first disagreed with that and then said the company should go ahead, even though i'd decided to leave. i think it was -- if executed in a certain way, i think it made a lot of sense. the company chose to go another direction. that's the decision the company made. emily: do you think they're wrong? >> i see the stock price sky high and all you can say is, the market certainly agrees with the direction side. i'm super excited about that. emily: former microsoft c.e.o. steve ballmer there. stay tuned for more of our he can cluesive conversation where we discuss ballmer's move from the board room to the basketball court as the owner of the l.a. clippers. ♪
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emily: back to our exclusive conversation with steve ballmer. in 2014 ballmer broughting his trademark energy and enthusiasm to the basketball court, buying the l.a. clippers for $2 billion. in part two of our interview, i asked him about the purchase and what life is like as the new owner of a sports team. >> i love the game. i low love seeing us go out there and win. but there's aspects to the job as well. how do i, you know, sort of properly interact with our coach, with our basketball staff, with our players. what's my role. we have big decisions in front of us. an arena. where do we go in terms of changing the way sports is consumed, ewing digital techniques, not just o.t.t., but
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virtual reality and live statistics, in addition to, you know, hey, it's the season, let's go win some ballgames. emily: so what are your hopes for a new season? not to talk smack, how can you beat the warriors this year? >> i watched the spurs beat the warriors by 25 points in their opening game. it's kind of like what we say. anybody can beat anybody on any given night. emily: that said, the cavs and the warriors are still favored to get to the finals for the third year in a row. does the league have a competitiveness problem and do they need to fix it? >> i think our league is actually pretty competitive. over time. but in angiven year, you you know, there are players who are difference makers. i think it is tougher to win it all if you don't have at least one and probably two of those difference makers. emily: how is the search for the new arena going? >> we're searching. that's one of the things we'll take a look at before we're all done.
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first question is, what's out there for available land, what would it look like to build the building. we have some good confidence that we'll find land, we can build the building at a good price. i'm very interested in the building of an arena. but before all is said and done, i'm sure we'll talk to the staples guy, the other thing i can tell you is, i don't think it every makes sense to enter a renegotiation with a landlord unless you have an option. we'll have an option and it could be have '-- could be a very exciting one. emily: let's talk about the class you are teaching now. you are drilling down on government. >> yeah. when i retired in early 2014, my wife and i really -- she's been working for 10-plus years on the issues of child welfare and what does it take to help support children who grow up in tougher circumstances. i retired and she says, ok, now, yew my partner. i said, come on, the government takes care of that. all we have to do is pay our
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tacks correctly. and she said, -- taxes correctly. and she said, no, we can do better than. that i've put 10 years in now. we locked on two things. number one, we locked in on a focus, on kids who are born in communities where their probability of living the american dream, having that sense of upside, is very limited. but why the government project, because my wife challenged me, i said, ok, i got to figure out really what government does. how much money does it take in, what does it put out, how is it working. and eventually came to the idea, what we needed to do was to create something like a 10-k, or an investor presentation, if you will, we're hoping to publish early 2017. emily: what are the most troubling things you've found about the numberss? >> government is actually making good progress and good improvements in many ways. i was surprised how good i felt, not perfect, but much better about government. and the taxes. and i came away with two big
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things. number one, what i call the savings programs. not the transfers and the entitlements, the savings programs, social security and medicare, we have to put aside enough revenue and enough expense to match. those things have lost money every year since 1980. second thing, we have to do consequently then, that will help us get the debt under control, but the third thing, which really jivingses with what my wife said -- jives with what my wife said, there are communitieses of people, let's say you're born in the bottom 20%. if life was perfect, there would be a 20% chance you'd stay in the bottom 20%. the truth is, there are communities of people where that number is over 50%. that's just not ok. every kid should at least have the opportunity. at does it take to doctor be fosh -- for government and for with us resources, what kinds of investments and not for profits and government programs, partner
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with government. so the been interesting. but when you look at government, a lot of things going well. but some thing really not. emily: the work you're doing with your wife has been compared to what mark zummerberg and priscilla chan are doing with their initiative. talk to me a little bit about where you're going, where you're leaning, who you're looking to help. >> there are some great not for profits doing great work. we're trying to find the best of those who operate nationally and support them. that's number one. number two, we are very bullish on what they call place-based strategies where you bring a community together and you challenge everybody. the schools, everybody, number three, we're going to focus in on certain sts citis. the ones we have connection to are seattle, because we live there, l.a., because i own a basketball -- we own a basketball team there, and detroit because i grew up there. emily: coming up, why there's some truth hint the comparisons between steve ballmer and apple c.e.o. tim cook.
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more of my exclusive conversation with l.a. clippers owner and former c.e.o. of microsoft, steve ballmer. this is bloomberg. ♪
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emily: a monal engagement platform -- mobile engagement platform for sports fan is getting backing from some of the biggest names in sports and entertainment. earlier we spoke with nba legend gary payton and asked how the app is encouraging youth to talk about sport. take a listen. >> this is very important because you got to understand, these kids are looking at us, they're idolizing us. the more famous people on this app, this is the more they want to be on it. because they want to associate with us. they want to talk to us back and forth. so if they see us watching a monday night football game and we're going back and forth, that's amazing to them. they want to keep doing. that they are like, oh, gary
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payton is on here, snoop dogg is on here, let's talk. we keep saying things back and forth to them, they're getting more into this app and then they want to be on it every night. we can go on the air, gary payton's on there, let's chit chat with him and let's trash talk with him. and that's what they want. emily: payton went on to say, athletes are investing in apps like gameon because they want to share the v.i.p. treatment with fans. back to our interview, steve ballmer. former microsoft c.e.o. part three of our exclusive conversation, i asked ballmer about his views on sales force. a public friendship with salesforce c.e.o. but ballmer said he could never get the math to work. take a listen. >> it's too expensive. it's a fine company. is it a great company, i don't know. it's a fine company. but in my opinion, relative to earnings potential, it is dramatically overpriced.
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that's just my opinion. emily: do you think they're headed for a disaster or -- >> i don't any if the company's headed for disaster. in my world view, at some point in time, the market will ask companies to make profits commensurate with their market cap. amazon doesn't either. they have great potential. it's a great company. great company. when will the market demand that? can't say. when will it demand it from salesforce? can't say. emily: is amazon getting a pass from wal street? >> they are. because people i think believe powerfully enough in the future of earnings. but you can't tell me over the long run earnings in market cap are divorced. that's sort of runs fundamental to my basic view in capitalism and the way it works. emily: when you joined microsoft, you didn't get a single share. is that true? >> that's complicated. i had a profit share. i never had a stock option. the written on wikipedia i made money on stock opping. never had any. at the day we incorporated, i
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had 8 3/4 percentage of the company. that's been the source of my ownership since then. emily: you still own a lot of the company today -- something like 4%. >> i still own what i owned. that's not something i disclose. with the stock at 60, you have to consider the possibilities. given how good a job they've done. emily: bill gates and paul alsold a bunch of their shares but you've held onto yours and you own more than them. why did you hold on? >> i believed in myself. i ran a company i believed in. the worth a bunch. it's worth a bunch. the full recognition in the mark place of the value of the profit stream we created wasn't necessarily recognized during my tenure. but it's now being recognized. i'd say i made a great investment. by holding. and i have a lot of loyaltyy. certainly when i'm working at the place, if i start selling, what does that mean? it means i don't believe in the
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future of the company. i sort of basically believe the people who are on boards or work for companies, at least in leadership positions, they should have to hold all their stock. emily: at what point do you think you might sell? >> that will be a decision i get to make, the longer i get out of the company, the more it's not mine anymore, the more i like at the value of the stock, the more we're doing philanthropically, which is a big deal. these things will change. emily: we've calculated you're worth $26 billion. how do you manage your money, how do you manage your investments? once you get to that level of wealth. >> well, i do it pretty simply. i own microsoft, i own some twitter, i own the clippers. and i own a bunch of index funds. emily: comparisons have been made to you and tim cook. tim obviously also taking over from an iconic founder c.e.o., what do you make of those comparisons? >> if you write it down on a piece of paper, founder,
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product-oriented c.e.o. replaced by nonfounder, more business-oriented c.e.o., the comparison is perfect. if you say most of the revenue and profit of the company was generated under my watch, yes. tim's watch, yes. so those things are true. i think people are trying to extrapolate that to, and during the tenure, the new product assets weren't built. certainly in my own case i'd say, hey, we got going in the cloud, we got started in hardware and we really built our asset in machine learning and artificial intelligence. so we were building those assets. apple's a lot more secretive. i can't tell what you assets tim's building or not building. the jury's out. the jury's out on everything. the worst thing anybody ever says to me is i'm being compared to a guy who's done a great job at apple, so be it. emily: on to your second act. what do you want to write in chapter two of steve ballmer? >> i want to have fun and make a civic contribution.
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the work i'm trying to do to publish all the at that da -- all the day -- all the data, i call those civic contributions. the thing we can do the clippers could be very good civically inside the los angeles area. i don't want to make this sound silly, but spectator sports by itself was not really my deal. i love watching my kids play. and the clippers, sort of more similar. i know the guys, i care, i see myself as a very energetic guy. but also very thoughtful guy. a guy who's come from being kind of shy and nerdy to a guy who is not. but the grounding part throughout that is ability to think through hard problems and hopefully make a difference. emily: microsoft's former c.e.o. steve ballmer on bloomberg studio 1.0. you can catch the full show online at the also available via podcast on itunes and sound cloud. that does it for they hadition of "bloomberg technology."
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all episodes of "bloomberg tech" now live streaming on twitter. check us out week days at 6:00 p.m. in new york, 3:00 p.m. in san francisco. and tune in for full coverage of the u.s. presidential election tomorrow. join us for all the analsy as the polls close across the country. starting at 7:00 p.m. new york time, this is bloomberg d. ♪
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announcer: from our studios in new york city, this is "charlie rose." syrian president bashar al-assad met with western journalists and think tank people in damascus earlier this week. he insisted his country's soulfu social fabric was better. he ruled out political changes and declared he planned to remain president until his term ends in 2021. it is believed at least 500,000 syrians have been killed and nearly half the


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