tv Best of Bloomberg Technology Bloomberg November 14, 2016 12:00am-1:01am EST
>> it is 1:00 here in hong kong. china's economy stabilize last month following new measures to cool the property market in almost two dozen big cities. industrial production rose 6.1% in october from a year ago. retail sales climbed to 10%, down slightly from 10.7 a month earlier. donald trump has named reince priebus as his chief of staff when he takes office in january.
he is chairman of the republican national committee and his nomination is expected to bring trump closer to the party leadership after a divisive election campaign. trump named his campaign ceo stephen bannon from breitbart .ews as his chief strategist japan's economy expanded more than forecast in the third quarter. grew 2.2%. consumption -- business spending was unchanged. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. bloomberg. ♪
emily: this is the best of bloomberg technology. we bring you all are top interviews from the weak in tech ek in tech. wea donald trump won the white house, though most in silicon valley lost the bet on the presidency. plus, what a trump presidency means for key issues in tech. chinese internet companies face a new reality after donald trump's surprise victory and we hear from the alibaba president. we saw one of the biggest single day reversals in stock market history and the dow jones industrial average ending just shy of a record close. amazon, microsoft, and facebook shares dropped with speculation of what a presidency would mean for them. we break it down with an analyst
and the global head of tech coverage. >> i do not know that anyone knows with a degree of confidence. anybody close to him will admit that they do not know exactly what he believes. it will be an interesting for years. obviously republicans won in all levels of the government. we should see less taxation and less regulation and improvement and flexibility to protect startups is the highlight because government constrains innovation of technology and there should be a degree of freedom we haven't seen in a while. emily: that said, a lot of uncertainty especially around policy initiatives. brad feuded with jeff bezos on twitter. >> he campaigned as a populist
but he is republican and surrounded himself with republicans and you do not know how much to take him on -- on his campaign trail word. he said at one point apple needs to bring business back to the u.s. and he talked about repatriation and these are things maybe silicon valley likes. emily: interesting apple ended the day slightly up and you wrote that trump could be good for tech companies in the long term. >> what i meant was begging of the tax were up each a lot of the tech companies. apple has more than $100 billion outside the u.s. and you look at large tech companies that probably have more than a trillion dollars outside of the u.s.
when that comes in, where does it go? you can invest that money back into the business and it will go into buybacks and m&a. you could get buybacks, which investors like and they can help the stocks. you can get more dividends. a lot of those activities can come out of these decisions. emily: peter thiel doubled down on donald trump won a lot of silicon valley -- on hillary clinton. listen to what he had to say about why he supported donald trump. peter: i do not support the specific language trump used in every instance, but i think one thing that should be made -- distinguished is the media is always taking donald trump
literally. they never taken seriously, but always literally and a lot of the voters who vote for donald trump take him seriously, but not literally. emily: his comments about taking donald trump seriously, but not literally have been repeated over and over again as people have been digesting the results. you has so many people in silicon valley coming out and viscerally attacking donald trump. reid hoffman told me it would be a terrifying disaster and the venture capitalist telling me hitler's was basically elected and he is funding a secession campaign. keith, what does this mean for the relationship between silicon valley and the white house? do you think there could be retaliation? keith: trump is vindictive, he has still talking about lying ted. i grew up young and picked up on
fears about nixon and retaliation and there is a must no doubt that the trump administration will retaliate against the partisan involvement of a lot of tech companies. a lot of tech companies went out on a limb. emily: that is jeff bezos, . keith: they give a lot of money to democrats even though the interests are different than the democratic party. technology companies will learn to grow up and they cannot take partisan opinions without consequence and donald trump will be the one who delivers the hammer. emily: eight years have been spent building a bridge between the white house and silicon valley. >> that bridge -- the smoke is rising.
your credibility as a venture capitalist is dependent on the photograph of you and president obama that you had in your office lobby and donald trump does not even have email. he has not embraced tech so the future of those initiatives is in doubt and i think the community has to get serious now and maybe a trump administration does too about rebuilding. emily: you were his right hand demand at paypal, does peter thiel become the center of the silicon valley-white house connecon? how does he revealed the bridges with -- with all the people who despise the decision he made? >> i think now he will look like a genius. he is half brilliant at half crazy and his art is between the two. he took an asymmetric bet and it will pay dividends for him and i
suspect he winds up in washington with a substantial appointment with a lot of power. >> he said he didn't see himself doing that. >> well you want to do that enter you get nominated. -- you want to say that until you get nominated. emily: do you think he would work for someone else? >> i think chairman of the fed or secretary of the treasury. that is how wall street works, -- politics works that way. you take a controversial bet and you get paid. emily: obviously the tech industry has been blamed for eliminating jobs, building the future of ai and robots and now donald trump is saying coal miners, don't worry. what is it mean for jobs? >> when you have jobs at the cutting edge of technology they are still in the u.s. i think tax and cash repatriation would be very good for the industry here. what i would say is that some of
these decisions that are made to give tax relief can create jobs and that would be good for the industry. emily: that was bloomberg's global head of tech and keith rabois. the presidential election sent record traffic to social media sites. but facebook and twitter have been blamed for the rise of divisiveness. after a presidential campaign filled with privacy concerns and hacking, what is to come under the leadership of donald trump? this is bloomberg. ♪
of the biggest losers of the campaign was polling. almost all pollsters and political insiders and predictive models had hillary clinton rolling into the white house. popular sites showed her with a 73% chance of taking it all and that was one of the more conservative assessment. how did big data get so wrong? keith rabois joins us and the former policy director for david cameron. >> there are two types of failure on the data front, in the polling, the polling models basically missed two big groups of voters and one was the secret trump voters, those could be peopleho we basically going to support donald trump but in response to the moral shaming on people on the other side they did not want to admit it and the other type of voter they missed were those who were invisible
previously because they had not participated in politics because they didn't believe any vote would make a difference and so there was new trump voters who voted for the first time believing he was a different kind of leader who might shake things up. the other big failure was in the turnout and this is the real heart of what i think went wrong with the clinton campaign is they had this incredibly sophisticated data-driven machine to turn out the votes in very specific toys and places, but it turns out that if you do not have a message and a leader people really believe in all the sophisticated data will not get you the results you want. emily: do you think some of the voters were on reddit? steve: i am sure they were on reddit and clearly there is methodology with the polls that were done if you spend any time on reddit in the last year, last night's results were not surprising.
we have a lot of users that support both candidates, but the users per donald trump on reddit were much more engaged than other users. on average we saw donald trump supporters vote six times more often on reddit then supporters of other candidates so that engagement i'm sure translated directly to turn out and the results last night. >> if a product is broken marketing cannot fix it. emily: have they make sure this doesn't happen again? everyone was shocked. >> almost every election you see this with the polls. for the reasons you give in the way people are engaging which each other in society they are much more fluid in their views and i wonder if the whole thing is out of date.
one thing i would say is there is a way of looking at the failure of the marketing machine in a positive way, not necessarily in terms of the outcome, but if we go to a world where it is not just about grinding the vote through sophisticated targeting and soulless mechanistic approach, that it actually forces ndidates to inspire people and develop a plan that people really can believe in and not just relying on data-driven techniques and that might lead to a more healthy political system all around. emily: it was partly driven with concerns around immigration and trade and that is why we believe he got elected. it is something people in silicon valley feel strongly about. google and elon musk were
created by immigrants. what do we think about the -- what do we think it mean on the effect on silicon valley? a i think it will cause relaxation of immigration. about a decade ago there was -- allow anybody who has a phd or a technical degree to immigrate freely. democrats and obama linked it to immigration for mexico under what is called comprehensive immigration reform and i think you will see the policies split back apart so republicans will pass bills that allow people with skilled degrees to immigrate freely and there will be a more controversy and -- -- a more controversial discussion about what to do with imgrants from low skilled countries. emily: obviously you have a lot
of engineers from other countries. >> one dimension in which we compete is talent. we need access to the best talent and we have lost people because of the h1v process. >> this is something we wrestle with because the impact of high levels of low skill immigration on working people is really tough and that is a serious thing you cannot ignore because it benefits particular parts of the economy were it is not a problem. getting the balance right will be something they will have to strike. i have heard them talk about for example the craziness of educating people at universities like stanford.
i ever donald trump say that. i think that while it is not at all clear the direction it will be taking, i think there are grounds for optimism. emily: we kept the conversation going with reddit ceo and got their take on social media playing in the presidential election. >> what technology has done is removed the role of the gatekeepers and intermediaries om to eliminating other third parties and now media does not have the role where it can screen and filter because people will talk to each other directly whether they do it on reddit or twitter and that will change the conversation because people who used to control the conversation and structure the conversation do not exist anymore and that will fundamentally change the rules and the kinds of debates people are participating in. in history class we talked about
the nixon-kennedy debate and how kennedy probably won the election because nixon was sweating too much during a debate which is a ridiculous way to choose a president. anytime you have a new platform, people who adopt the new platform of you who do not will thrive and people who -- people who do not will suffer. emily: there is an argument that facebook is making more editorial decisions. i saw one article that said facebook is harming our democracy and they should admit it. if you think about the fact that so much the news we are reading we see the f facebook -- we see via facebook. some things those things are click bait-y or wrong and inaccurate and that is what people are watching and reading on face book.
>> i think what you see is not facebook choosing the news. the users are choosing the news and what the internet gives you is the ability to choose what you hear and with whom you discuss it. emily: does facebook cap and of it -- a responsibility to curate the news especially if the news is wrong? emily: credit cofounder and ceo steve hoffman and keith rabois. donald trump now holds reigns over the nsa.
emily: gopro shares tumbled as much as 10% after they are recalling 2500 of the new drones. a small number have been losing power midflight. they say no injuries or property damage have been reported and customers can return for a full refund. in the recall deal is another blow to the company's already dim prospects for the holiday season. after months of campaigning donald trump overcame all odds and became the 45th
president-elect of the united states. the new position comes with a number of responsibilities including control of the nsa. this is a presidential campaign filled with hacking, primarily focused on the democratic party. brian white joins us along with keith of coastal ventures to address what private and cyber security will look like under president-elect trump. >> i think first we can all take a deep breath because there will not be an enormous amount of change, but what he said is he wants to put a task or's in place to look at these issues. that can be expected of any candidate and i think the second is there could be more offense -- offensive activities and that is probably the one we need to watch closely because particularly post russia is that there have been some bertelli ash -- retaliations of late. it is been reported that we gained access to their
infrastructure so the question is will that continue or will he want to use cyber offense more often or be more disclosing of the capabilities. emily: so you are saying the u.s. is going to hack rationale? -- russia now? >> i am not saying that. the question i think is on the table in regards to president trump and what may transpire is how will he use cyber offense? more than necessarily privacy because i do not see him making much of an impact. emily: do you worry for our safety? >> if you look at president before, nixon clearly abused his powers. there has been a lot of democrats and liberals ignoring the concepts of the constitution
and limits on the executive branch that obama has pushed very far and i think there will be a consensus to pull back what the executive branch is allowed to do. emily: president putin congratulated donald trump on the win. how much do you think the hack influenced the outcome of the election? >> i will leave that to the political prognosticators. i will stick on security. what was interesting about it is the fact that it looks like a foreign intelligence service went ahead and partnered with an organization such as wikileaks to disclose information. emily: and got away with it thus far. or accomplish what they had hoped. >> i think that is where speculation comes in, what we should focus on is what that means going over it and i think that is partly what we will consider -- continue to see.
cyber will continue to be used as a tool. we already know people are being targeted inside organizations that take sensitive data. someone who is internal has access. they were gaining information and they knew how to target. emily: the u.s. relationship with russia has been incredibly tense. what do make of a potentially friendlier future? >> i am not sure being friends with russia under the current leadership is a good idea. i think russia and putin has some bad ideas and somebody needs to stand up to them. emily: could donald trump force companies to hand over more personal data? >> it appears as if he will be more pro-law enforcement and he could be more aggressive going forward. i think we have to remember
there are other branches of government that need to be engaged and enable him to be more aggressive and he would have to get a subpoena approved to gain access. i think this is an idea where senator warner and the commission to study encryption further comes in and i could see that gaining legs. of all the priorities coming up, going after and changing the way encryption is is probably not at the top of the list. emily: coming up, we had to china and speak with aliba president mike evans and if you like bloomberg news check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com, and on sirius xm. this is bloomberg. ♪
>> it is 1:30 in hong kong. there is speculation the donald trump will increase spending to boost the american economy. three year yields are rising to 3% for the first time since january. the yuan is at is weakest since september of 2009. that is more than 6.5% lower than one year ago. yuan volatility has jumped to the highest in threemonths.
oil, we will look at that one in a moment. iran has been boosting output .s. has a raised the number of active rigs. prices have retreated from near $52 a barrel over the last three and a half weeks. 0.25% today.down today's powerful earthquake could cost. $2 billion struck just after midnight. they killed two people and it has been followed by many aftershocks. global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. let's have a look at what is going on in the markets.
here is juliette saly. reporter: a bit of a mixed day. we have seen a straley australa close lower. new zealand though, had a fairly positive session, despite a jittery start. the kiwi is recovering from some early selling in the wake of the weekend earthquake. we have really solid moves coming in from japan. of course, we have this big movement coming through in the u.s. dollar. that has sent the yen weaker. also, the gdp numbers are coming through much better than expected in the third quarter, 2.2% year on year. that has been a very balanced session for japan. also, a pretty good day coming through in shanghai. electricity companies, of course we did have that fairly ok data coming through out of china, showing further signs of stabilization.
the shanghai composite is up 0.5%. we can see banking stocks higher on this search for yield. we will be live from london at the top of the hour here on bloomberg television. emily: welcome back to the best of bloomberg technology. heldweek, alibaba spendingur sales blitz. notice.s took we caught up with alibaba mike evans live shenzhen, china. >> it would be very difficult to
do. as you can see, we are at least 30% higher than last year. we have somewhere between $18 n $17 billion in $18 billion. 33% or 34%.ore like but the real opportunity is that we are only today trading about 10% of the china resale market online. and so, there is huge potential growth in the china market. so, we see substantial further opportunity for growth in the future. emily: president elect trump said he will end trade agreements around the world. the alibaba chair has urged him not to adopt an isolationist doctrine. presidency, trump
and as some of these policies he is indicating, what would that mean for alibaba and for china? >> i approach this from a fairly pragmatic standpoint. china is a great country and the united states is a great country. speaking as a canadian, not a citizen or resident of either. these are the two largest economies of the world. for them to work together is what will be necessary, not only for the benefit of the country's but foies, but for tht of the world. trump's trade policies could pose the biggest threat to alibaba. how would alibaba respond to iffential trade tar sanctions? >> we do not actually sell that much productivity in the united
states. if you want to know who the number one beneficiary is, at our global shopping festival this year, the u.s. had the largest number of brands selling products to the chinese consumer , and to other consumers around the world. understand,or me to come up me to with a reason why we would not want this to continue. it is fantastic for job creation, and all those things that trump, and many presidents, are focused on. emily: you've reported data last year. how are you changing your accounting processes as a result of that? >> we are not changing our accounting processes. we think the way we present our numbers, whether it is in singles day, or on the regular quarterly reports, is accurate and in accordance with the
rules. we received a letter sometime ago from the fcc, and we are fully cooperating. largeered that in a very presentation several months ago. we feel very good about what we are doing. a prescribed procedure by our independent auditors sales.e record the and any recorded sales that is a the numbers and we can then follow the procedures put in place. emily: you are the guy who is in charge of increasing alibaba's global presence. any chance that singles day might be held outside of china, maybe as early as next year? >> jack was asked that question a few minutes ago when
addressing the chinese media. he said at some point in the future, he expects to do that, but we have a huge job ahead of us to connect so many great brands from developed markets and around the world. as you know, one of my big focuses, the rest of asia, india, southeast asia. that will take many years to accomplish. emily: that was mike evans from shenzhen, china. coming up, our conversation with walt disney ceo bob iger. all episodes of "bloomberg tech" are now live streaming on twitter. this is bloomberg. ♪
iger right after the company reported. take a look. >> 2014 and 2015 were record years for us and we did even better in 2016. we continue to grow the company at a robust clip. the two biggest things we had to accomplish in 2016 was, one, bring "star wars" back. then, it was just a gigantic success, over $2.1 billion in office,al bron box and a critical success as well. the second thing we had to do was open up the most ambitious project we have ever embarked on, building disneyland in shanghai. we opened on june 16 and after four months of operation, 4 million people have visited the park and they are loving what they have experienced.
the prospects for that park are really bright. that is the biggest investment we have made outside of the united states. it shows in the product. it is a great product, very original, and it is very well-received. so, first four months, 4 million visitors. and that included that peak summer time period. by the way, we would be happy with that number, but we are not providing guidance there. oft we can say is about 50% the people visiting come from outside of the shanghai region. that is a big surprise to us. we thought it was going to be well above 75% initially that came from shanghai. the fact that it is so balanced leads us to believe t hat word of mouth on this and the inentent to visit is very high. this has become suddenly, not a local product, but a national
product in china, a national tourist destination. that is really positive. reporter: one of the strengths of your company is the range of assets you have. if one this a little bit, you have another. i think it is fair to say the media networks have gotten a lot of attention, particularly epsn. but there are questions about the subscriber level, and the reduction in subscribers. can you bring us up to speed on where that stands right now? what rate are you continuing to lose subscribers? or, is that continuing? >> we have been eyes wide open on what is going on within the television business. people are consuming television on new platforms in very different ways, and in new places as well. we were candid a year ago about what we had been seeing at the time, regarding espn.
many of the losses came from the adoption of cable bundles that did not have espn in them. we decided we would embark on a campaign to make sure that espn was included in any new light bundles that launched, and we have been quite successful at negotiating deals with the distributors, particularly new distributors to make sure epsn is included in the new package is coming out. so, we are heartened by the abatement in the loss of subs to the light bundles. two, the launching of these new digital platforms, which provide great user interfaces. we know epsn is a great hand. we know live sports is still really popular. while there are challenges that are due to some of the disruption we have seen, we believe there are some solutions, or some answers to some of the questions people have had about what is going on with epsn.
and we feel good about our prospects. reporter: with the at&t and time edrner deal, does disney nead to own the distribution of those digital platforms, or not? >> it is interesting because i look at the at&t and time warner merger as a distribution company needing content. as opposed to a content company needing to own this division. i wil-- needing to own distribution. content is king. if you do not have great content today, you better figure that out because the consumer is far more interested in conent than how they get that content. for disney, what we would like to accomplish, and what we see as a great opportunity, he is
how do we get closer to our customer? there are these tools that exist today that improve the user experience with customization, personalization, more tailored, more contextual programming in advertising and it also gives the distributor the opportunity to monetize under more compelling circumstances. one of the reasons why we made the investment is we like the because it gets us closer to the customer. we are going to continue to look with an open mind expansively as those opportunities. do we have to own distribution? no, not as a company. would we like to have the kind of distribution that solves the problem, or provides us with the opportunity i just described? yes, we would. reporter: one of your strengths
is you have always believed in going to scale. mentioned the $1 billion investment. is that alone enough to take you to scale, or do you need something more to take you to scale in this new distribution area of digital? >> a very good question. i do not know the answer to that. it is a step in the right direction. it gets us to the kind of scale that we need. i think it is premature to answer that question because we have not launched the epsn product on it yet, but it is an important step. reporter: this has been an important week. the new president did surprise a lot of people. it is early going, but i know the way you plan ahead. what are your first thoughts about how president trump could affect the walt disney company? >> first of all, i think so far, so good in terms of what i will
call the transition, even though it is very early. i think both the president elect -- i was going to say the candidate, but he is no longer the candidate -- the president elect and president obama have approached this very smartly. understand be open, that the most important thing here is america, not one party or another. and so, let's be gentlemen about it and that is what they are doing. for the country to see that, it just instills confidence in our country and faith that the future is good, even if you'r r ideology is not represented. i like what i have seen so far and i think the country is reacting well. reporter: you are a student of the media. you have lived your entire professional career in the media. it is not too soon to ask the question, of the role of the me dia in this election.
it strikes me that this is a very different media that existed, even four years ago, certainly eight years ago. donald trump took advantage of that, both in terms of getting access to cable channels, but also on social media. is the media starting to think about its role in future elections, and what role it should be playing? >> there is a lot of hand wringing about the media this week and its role in the election. i think that handwringing is missing the point. , theoint it is missing is media today does not look anything like the media of yesterday. we are living in a world where the definition of media, and i am not talking about the definition that the industry greats, but what the people create, it is externally different from what it used to be. how we get our news, how information travels, how fast it traveled, it is vastly
different. i would argue the media played a positive role in this campaign in the sense that it was ever present, it was eyes on, cameras on. everything was exposed. everything was subject to scrutiny by the new media. that cannot be a bad thing. did the media get it right, in terms of projecting the outcome? no, and i think that deserves scrutiny by the media, but i do not think the manner in which the campaign was covered is necessarily something that deserves criticism. you can always be reflective about it. that is fine. there is nothing harmful about that, but what is media today? it does not look anything like it did, certainly five years ago or 10 years ago when i started my career at abc 42 years ago. it is just different. i think it is time that those
that follow the media from a critical perspective except the fact that the media they are following they follow today is vastly different. emily: bloomberg daybreak america david westin, interviewing disney ceo bob iger. one stop that did get a boost from donald trump's win is s print. president elect trump will be in charge of nominating the leaders in agencies like the fcc, and the justice department, which previously blocked sprint's merger. trumpcoming up, what a win means for business. this is bloomberg. ♪
emily: the alternative energy industry saw a drop this week after the election of donald trump. that is because trump is a longtime climate change denier, who has vowed to undo clean energy moves made by president obama. shareholders will a vote to approve a $2 million merger. business meters throughout tech have been reacting to what a trump presidency might mean. i had an exclusive opportunity to sit down with blackberry ceo john chen. i begin by asking what a trump win means for blackberry, and for business. >> this really came out of nowhere. the reaction, it is pretty shocking. emily: what does it mean for
blackberry and business? >> actually, i am an optimist. i think about the good side. the way i view it is, it is reality, it happened. so, we need to make the best out of it. i think -- nobody really knows what he will do next. but if trump is really pro-business and a smaller government, less regulatory, i think it will actually be good. not only for the tech industry, but for banking and many different industries. i would suggest it very much isends on who hhe surrounded by. i hope they are moderates. emily: i know you are a registered republican. you worked with president bush for a time.
you said a few months ago, you are an immigrant. he did not know if you could vote for trump. what did you decide to do? >> i am not going to tell mainody what i did, but i re truthful to the fact that i think being an immigrant, it was problematic. emily: given that so much of the technology industry is built on immigrants and skilled workers who come from other countries, how do you think a president trump could impact the workforce? be again, i could absolutely wrong. position is more deal driven. everybody at washington wants to this illegal immigrant issue. you never got through the voting
process. would endmp said he it. >> as i said, people have said a lot of things in the political process, the election process. and i think it is impractical to end h1b. i think it would really hurt the country in a profound way. i hope he is a businessman enough. -1bwill notice that ending h would really hurt across the board for all of the tech industry. that hope we do not get to point. emily: president george w. bush, you advised him on u.s.-china relations. how do you think president trump will impact the u.s.-china relations? >> that is very interesting.
i think the beginning will be rocky. i also do believe it gives an opportunity to restart a different type of narrative and dialogue. it might not be as bad at the end. we have been running the same framework with the u.s.-china. they call it containment. we have been running that dialogue for better than one decade or more. trump, he indicated on his website that one of the top priorities would be to declare china as the currency manipulator. that is what he said. now, no president has done that. democrats or republicans. that, ittually does will really create a lot of tension. worknk the chinese will those things out with the u.s.
at the end of all of that, there might be "a better deal" for both ends. again, i hope i'm not overly optimistic. emily: in what way could it be a better deal? >> china does have a problem in opening and broadening our region within the chinese market, for example. in fact, it is going to go back the old way of being more protective. maybe it is the economic drivers, maybe it is many different things. anhink there might be opportunity there. as i said, it is reality. emily: he said he will end a number of free trade packs, and the china in particular, there are concerns it could lead to a trade war. how likely do you think a trade war is? >> i don't think so. it hurts everybody. i am sorry to say this, but i
don't think anybody is that dumb. you know, what do i know? but if you want to be a logical businessperson, you look at the well-being of everybody, including your own people. a globalizedin system, it is absolutely devastating, to say the least. it would put the entire world into a recession that probably would be very difficult to get out of. we do not have any more weapons left. they areof funds, done. we have deflationary moves in many places. we have no growth around the world. starting a trade war right now, it is the worst time we could possibly do that. emily: that is my exclusive interview with blackberry chairman and ceo, john chen. that does it for this edition of "the best of bloomberg