tv Bloomberg Technology Bloomberg November 15, 2016 12:00am-1:01am EST
we have sources telling us the assets include hotels, hospitals which employs of 10% of the workforce. the divisions may be headed towards local government control or subject to joint ventures . the quarterly profit margin s fell. an extraordinary general meeting to push the chairman out of the board of the unit. powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. let's take a look at the markets. trading getting underway in hong kong. hong kong stocks advance from three-month lows. this is bloomberg. ♪
cory: i'm cory johnson in for emily chang. this is "bloomberg technology." coming up, the postelection tech rout continues. analysts see what a trump presidency will mean for silicon valley. mark zuckerberg strikes back at critics saying the social media site swayed the election. billionmaking an $8 bet to buy harman international. more details ahead. first to our lead, tech stocks continuing to slide in the wake of donald trump's election. the first four-day drop since february. they are wondering if president trump will foolow through with his policies outlined by candidate trump. the chinese says they will take
a different approach with apple iphone sales which are down more than 4% over the last four days. joining us now with what tech might look like is david kirkpatrick and james. amazon, alphabet, among others. james, you said terrifically this morning in your note about potential impacts. the first thought was in silicon valley, we have so many great companies from intel to google, founded by people from other countries that we depend on people with visas for these companies. why do you think immigration will not be the most important thing for silicon valley? james: we think trade is a bigger deal. when you think about
immigration, what does trump really want to do? his talks at rallies -- it is about creating jobs here. when you think about what the technology industry is doing, they are not as much as disenfranchised as american workers as they are in hiring the best of the best. at the same time, when you think about supply and demand -- there is a lot more demand for these technology jobs than supply. that is why we don't see h1b visas being a top priority. david: my thought when i hear that -- i assume you are saying if he takes his trade actions, iphones will have tariffs put on them or whatever -- my opinion is that simply will not happen. if he were to take many of the trade actions he has promised, the global economy, in particular the u.s. economy --
cory: like getting rid of nafta. david: there are so many things. this is a very delicate balance, the value of the dollar, who holds our debt? whether we buy imports or not. if he really messes with that in any direction too much, you risk creating a disequilibrium that can be damaging to the economy. damaging to the people that elected him. i'm sure he will have relatively smart people that will remind him of that. cory: a note that was nowhere near as good as yours this morning. tony of bernstein had an interesting note where he focused on taxes and repatriation. i thought one of his interesting takes, a look at the s&p 500 and taxes, non-tech companies pay a lot more in taxes. this is a duh because a lot of
s&p 500 companies earn a profit. the tax rate paid by non-tech companies shows 17.9% of the average tax for tech companies whereas it's 24.6% of the rest of the companies which suggests a tax cut will not actually help tech companies. maybe this makes some sense. maybe the rebalancing with less tech because it would have less success. james: you have to bring the cash back. we have trillions of dollars sitting overseas. if we can do it in a way that is not just done on a single basis, but rather a perpetual basis where we know it is not a one-time thing, but prolonged. i think there are opportunities. they tell me if they had the opportunity to bring it back, they would.
several years ago, ebay tried to bring it back but they couldn't because everybody was up in arms. david: that is great for these companies. prices may be dropping if that happens and it is great for the american economy. cory: which is to say wall street could be stupid here. shocker. the company that has the highest tax rate and the most amount of money overseas is apple, the very company that could benefit the most. james: i think there is an overreaction. there is a lot of uncertainty, but there cannot be something that would destroy everything that has been established. trade, yes, but if it is done with the proper tax incentives to actually encourage that behavior, it probably will be a lot more muted.
david: that is one thing is the repatriation of those profits. if you don't like uncertainty, it is a dicey time, no question. my own view, i'm just not feeling apocalyptic. i've read this great article by a really smart guy saying this is the same mood after the election of nixon, reagan. i remember i was going to leave the country when reagan was elected. these things settle in and the republic survives and probably the tech industry, too. cory: james, you also highlighted other issues. james: i'm optimistic. there are two things that are on the back of the mind.
one is net neutrality. he hasn't taken an issue. we want everything to be equal. if there is a turn of that, what that could do is empower the companies but also increase the likelihood of a netflix acquisition. the second thing is on jobs versus robots. if you are talking about job creation, we are moving towards an automated world where everything is being taken over by robots, it could slow down the implementation of tech in general. cory: interesting times. it is a great mystery to see what is going to happen. i'm glad you are both here. david will stay with me. we will see you later this week. for now, thank you. 13 filings giving us a look at what tech companies are held by
which money managers and which institutions like tech and which don't. adding some stakes to the company. investors are divided on the outlook for alibaba. tiger global adding shares. the decision to cut amazon and double down on apple. coming up, facebook attempting to come to terms with its huge influence as a news platform after the u.s. presidential election. how can the company fact check its news feed or should it even bother? this is bloomberg. ♪
they are making further moves into making profits out of its massive image library. you will hear from the ceo of youtube later who once led the google image search business. mark zuckerberg says the notion of a facebook effect on the presidential election is a crazy idea. a more complex post response -- "i'm confident we can find ways for our community to tell us which content is meaningful but we have to be extremely cautious about being arbiters of truth ourselves." david kirkpatrick is back with me right now. david: to whom he said was a crazy idea at the conference. cory: this is the heart of what facebook has been from the start. the heart of the internet -- should it be a place where
people are responsible for what they put out or is the host responsible? david: it has been always towards the former. a platform -- the content comes from you and me. what happened is this scale of facebook's impact on society, the scale of the diversity of its services it offers, it is intenable to just be that anymore and i think they know that at facebook. i think there is a little bit of an existential crisis like who are we and how do we live up to what we are now? because it is easy to forget people can bad mouth facebook or criticize them -- this is a company with nearly 2 billion users globally. that has never happened before for any company, industry. personal data on all those people. all of them are sharing news of all kinds about themselves, their brother, their dog, their
country, the pothole on their street. that is a new environment. they have a lot of systems in place. i think they have done a good job managing it, but they need to do a better job. cory: to that point, we have a clip from your conference. let's check what mark zuckerberg actually had to say. mark: personally, i think the idea that a fake news on facebook -- it is a very small amount of the content -- influenced the election in any way is a crazy idea. cory: i don't imagine him telling advertisers that the advertising is very little impact and nobody actually pays attention to it. david: yeah, but, it is a matter of the percentage of news
stories that were fake were less than 1%. i think it is interesting to ask yourself -- ok, if facebook were the arbiter of truth, how do they do that? truth is a very hard thing to define. you know how much fact checking it would take to ensure it was true at fortune? like three days worth. it is not easy. i don't deny that facebook have to do much better. i think they are taking this whole thing gravely seriously. they are somewhat taken aback by the pushback they are getting and they are working to figure out how they should respond because they feel they have to do more. i think zuckerberg's note over the weekend shows that. cory: "the new york times" suggests it was not only zuck, but a manager at facebook had a freakout over this. do we need to change our policies because we may have contributed to spreading false information? david: that is happening at
every major news organization also. that is one of many things they do. "the new york times," "the washington post" are freaking out internally. they are getting a lot of pushback from the readers and they are having an existential crisis because everybody got it wrong. they are thinking are our systems wrong? facebook is the biggest, richest and most in-your-face. cory: reuters reporting that google is working to restrict ads from being placed on fake news sites. facebook is not doing that. david: the kind of thing they could do is get authentication somehow for media properties. these people in macedonia where they are making up news organizations. cory: there was a small handful of people creating hundreds of posts that were fake, but generating a lot of clicks.
they were very popular on facebook and they made money. macedonia made money and facebook make money off of this. david: true. it would not be that hard to have some sort of authentication for media organizations that would prevent that. i think that could be done and i bet they do that in the not so distant future. cory: we shall see. david kirkpatrick will stay with us. the u.s. government will require new hybrid electric cars to make noise when traveling at low speeds so pedestrians, people that cannot see, they can hear the car coming. the new rule could help prevent 2400 pedestrian injuries a year. could uber get the last laugh in china? tighter regulations on ridesharing companies could make didi's business a lot tougher soon. we go to hong kong for the details next. this is bloomberg.
cory: samsung is making moves in the automotive technology business with harman international industries. they make high-end car audio and a leader in connected car technology. the ceo says samsung is a good fit. >> samsung and harman believe this is a strategic fit that will maximize our strengths. samsung's global scale, r&d capabilities and distribution channels will provide harman the resources to broaden our portfolio, expand our reach and accelerate the production of industry first positions. cory: it has only been a few months since the china giant
didi bought out uber, but now the cities are planning to enforce tighter rules and selecting what kind of cars drivers can drive. joining us now from hong kong is lulu chen and still with us is david kirkpatrick. what are the rules proposed in terms of both the residency and the vehicles themselves? lulu: the largest cities have ruled out tighter policies requiring only local residents, for example in beijing and shanghai, to drive these car hailing apps. all the other cities say they require locally registered cars to run on the roads. they have higher requirements on what types of vehicles can run on the roads. especially for the private car hailing business, and that is a significant part of the revenue. when we spoke to drivers, they
say the government and didi have not sent them messages saying not to use the apps if they are not locally registered but there are police raids these days. cory: i've had it with traffic. is this really about traffic and the government's response to increasing traffic in regards to the app? lulu: there is discord between the central government and local administrations. at the local level, because the city governments are in charge of issuing a lot of the permits for the taxis operations, this is probably a pushback from the cab drivers and the companies behind them where they take a cut from the operating revenues. for didi coming in and bringing millions more drivers, it is a blow to their business and that is probably where we are seeing this pushback from.
cory: it would seem they have the inside track that the government would favor them. david: i will tell you another way where i can make uber feel glad they are not involved. the answer is probably to go with the point we just heard about the greasing of the palms of government officials and the local government by the taxi industry. that is how they have to get out of it. it just gets more expensive to do business and it becomes less of a super cheap alternative form of transportation. it is so hard for western companies to do business in china because of the regulatory regime. i think uber was super forunate to get out. cory: that is fine with me. there was a thought that one of the things uber was doing by
stemming their losses in china was taking a step closer to an ipo. i wonder if you get a sense of these companies cashing out their investors, growing up a little bit and becoming a publicly traded company, uber. david: i think in general that may be happening, but i don't sense it is uber as much as it is of the other companies. i think uber is feeling comfortable at being able to raise capital at private valuations. if you look at facebook's situation, if they had never gone public, they would be able to do a lot of things to respond to situations that are putting them in a difficult situation now which they cannot do to keep churning the advertising crank to please wall street. cory: do you think this will get resolved at the national or local level? lulu: didi is providing feedback to the local bureaucracies.
they say they are more open to moderating the policies. we will see how they negotiate with the governments. cory: we certainly will. it is quite a big story and could affect how the country develops. lulu chen, thank you very much. great story. david kirkpatrick, thank you very much as well. coming up, the ceo of youtube telling us about the plans to take original programming to the next level on the video streaming site youtube. you can listen to us on the bloomberg radio app, bloombergradio.com and xm. this is bloomberg. ♪
inie: it is 1:30 p.m. hong kong. donald trump may be continuing a pattern of putting close allies into his key administration positions. the campaign-finance chairman, stephen nugent, maybe the head of the treasury. he would be the third goldman executive to be treasury secretary since the mid-1990's. china's largest robin ventura -- poroperty developer now has more 230 10% after buying about million shares recently. they have alerted the regulators
in the shenyang stock exchange. apple may move into smart classes. the potential advice would connect wirelessly with the iphone, possibly by augmented reality technology. glasses strapped its project while snapchat introduced spectacles this year. samsung electronics had an $8 billion move into automotive technology. it's buying harman international, giving it is the relationships with bmw, volkswagen and general motors. samsung says it has no desire to actually make cars. harman's was 21% above close. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. let's check in on how the markets have been trading across the asia-pacific today. here's juliette.
juliette: the yield on the japanese 10 year note has risen to zero since the first time since september 21. speculating how long the boj will allow it to remain -- the yield to climb. there is strong demand for this note at 0%. we are seeing a little bit of traction in the australian 10-year note as well but holding at 2.6% in terms of the yields that is a high since april. a lot happening in the bond space. we are seeing some coming emergingrom the markets since we had the outcome of the u.s. residential election last week. coming through from jakarta which has been hit with the weakness we saw in an indonesia. in hong kong, the hang seng up by 4/10 of 1% after a
three-month low during yesterday's trade. weakness from shanghai and a stronger yen impact in the nikkei which is down by 1/10 of 1% at the moment. we will be live from london at the top of the hour. ♪ cory: this is "bloomberg technology." i am cory johnson. we are bringing you the story of the ceo of you to -- youtube. we spoke with her on the 10 year anniversary of the acquisition and she talked about 1998, larry page, they first set up their office in her menlo park garage. >> i wish i could say i picked them out out of all of the
students at stanford, come run to my garage. i wish i could tell you that, but it did not work that way. what happened was i bought a house and houses are very expensive in silicon valley and i was a student so i wanted someone to help me pay the mortgage. they were looking for space, and they were just, the two of them had one employee. space was expensive so the idea they could move into my garage quickly and easily at a relatively low cost for them was really appealing, and so, they just moved in. emily: your mom was a teacher. you have two sisters. janet is an epidemiologist. tell me about a day in the life? susan: we grew up on the stanford campus so that meant on the neighbors we had were professors around us, which i think definitely influenced us because everybody was studying to do something and had a passion, and so, i am the
oldest, and may be the more practical one, as the oldest one, and very creative. i always loved making things and that is what led me to computers in the end. >> how did you parlay your therature degree and into company? susan: i studied literature at harvard. i had no idea i was going to go at the technology at all. if he would have told me that when i was a student, i would have thought you were completely crazy. i would do temp jobs, one week free and quality temp service and say "place me anywhere." one time, it was that a lawyer, another time was at a garbage company to answer the phone. the third time, i got placed at a startup and i realized they can use technology and they have these big ambitions and i realized that it's really cool and i want to be part of it.
when i was a senior, i decided to take a computer science class at harvard because there is no other humanities senior taking a computer class. it was really good. i got a good basis. when i moved back home, i came to silicon valley and i was able to get a job and i have been there ever since. >> you were google's 16th employee. google images. susan: when you join a startup, you have to do whatever the start of needs you to do, but also because if i did not have a fixed role at first, i was always looking for the opportunity, so, there is an opportunity. nobody else is working for example on image search, so no one else is working on image search. images would be really cool. you know, today, that is a really popular search, so i
think, doing lots of things and having the freedom to move around the company enabled me to see a lot of opportunities and grow them. emily: it has been 10 years since google bought youtube and you wrote the original justification plan, as i understand it, that convinced larry and sergey to buy the company. susan: i did a spreadsheet. i also believed in youtube. there was one video that we had and that video convinced me, and showed me that people all over the world can create content and be entertaining. so, the video was of these two students in their dorm room and their roommates in the background doing his homework and they are singing to the backstreet boys and they are incredibly funny. i still laugh when i watch it. that was our first hit. and i realized that people all over the world can be creative and funny and that other people want to watch it, and i thought "wow, if it continues like this and continues to grow, this is
going to be a big phenomena." emily: youtube has become so much, but i hear it could be so much more. susan: growth has been amazing. we have a million people who use youtube every month. that is a big number. variety did a study where they went and asked teens, "who are your stars?" in 2015, they said that eight of the top 10 of their stars were youtubers. emily: what is the personal stamp you want to put on the company? susan: it has been really fun. i love being at youtube, i love the creative aspect of it, i love the way entertainment is being opened up to everyone and i care deeply about the values we have, this freedom of expression and the fact that people all over the world can
use it to tell their story. when i think about what we want to do with youtube and where do we want to grow it, video has never been easier to create or to watch. and so, we think about ourselves as a new platform for the next generation of media companies to be able to create content and distribute it to the world. we want to work with traditional media companies so their content can be redistributed to all the millennials on the platform. >> some analysts estimate the value of youtube could easily be a settling company. why is it not a standalone company within the alphabet family? susan: it is an important part of google and we benefit from a lot of things being part of google. we run on google and the structure. we benefit from google's team that sells our inventory. we are a company within google and so we have all parts of the company, sales, marketing, engineering. we have some of the benefits of being within google. we are able to be a standalone brand within the company.
cory: this is "bloomberg technology." i am cory johnson in for emily chang. turning back to our interview of susan wojcicki on bloomberg studio 1.0. she talks about being a working parent and the importance of diversity in tech. take a listen. susan: the main thing for me has been to focus and prioritize and so, i am really good about saying "this is my work time." when i am in the office, i am really focused on what i am
doing and prioritizing. i always think about how do i get from point a to point b as quickly as possible? i don't have forever. i cannot stay till midnight and work weekends. it caused me to see some of the shortcuts, some of the new opportunities because i was thinking about, how do i grow this faster? let us forget about all of those other things that are going slowly. i do not have time on that. i have to focus on the big ideas and we have to get them done now. that is really good in tech because tech is about growing big ideas quickly. and so, i use my work time to focus on that, and then when i get home, i try to focus on my family and my kids. my husband is very helpful. realistically, to be fair, as i have risen in my career, i have been able to have more help at home. the hard part, and when i really struggled with, was when i had my first baby, i did not know what i was doing it works, it did not know what was going on at home, did not have support at
home or work. that is when it is the hardest. there is a set of women who say this is really helpful for me and other women who say, "you know what, i have made a conscious interest was not to lean in. i want to spend more time with my family, not working." i think those women sometimes, you know, find it offensive or disagree with it, but you know, look. i think of it as a business book for women, and so, not everyone wants to be in business. not everyone wants to lena and. cheryl was really open about that in her book. this book is not for everyone. there are many women who have to be working. how to ask for a salary, go advocate for yourself, and so, i think that it really applies to a lot of women who want to work
or have to work. >> what about places where there are still barriers? you cannot lean and if the door is -- lean in if the door is still shot. susan: the reality is those things get changed by having more women in the workforce, right? so like, summer camps. when i was growing up, i don't remember there being summer camps. we stayed home all day and did nothing. now, there are so many choices. computer camp, our camp, design camp. they're all of these parents who want kids to do activities during the summer, here is an opportunity for you. emily: how big a problem do you think it is that women are so underrepresented in technology? susan: it is a big issue for the world because we are missing voices, innovation from women who could be creating all of these great products and ideas and services.
i think tech is missing out. it is a problem for women because you look at it and say, women have made a lot of strides in the workforce, and here is this huge economic driver of change, and women are not participating in it. tech is what is driving the new jobs. it is what is driving change. it is driving influence. women are not part of it, then they are not part of that change, and that is a problem. cory: youtube ceo susan wojcicki. tomorrow, we sit down with google x founder sebastian. a global diversifier. that conversation at 7:30 a.m. wall street time. this is bloomberg. ♪
cory: is is "bloomberg technology," and i am cory johnson. we go back to studio 1.0 and susan wojcicki. how much is youtube willing to spend on content? susan: we have been learning about creating shows, we have been really pleased in the shows we have created and the feedback we have gotten from our users. emily: what is the most successful show? susan: "pewdiepie," a gamer. he does really funny commentary. he did a real-life game where he was put in real life situations like a game. emily: twitter, amazon, facebook are pursuing life streaming. is sport something you would consider? susan: we do a lot of highlights for sports. we did the whole football season. they did really well on youtube. the full game, right?
they are very competitive. they are really expensive. in traditional media, also, are competing for them. a lot will change over the next five years, but at this point right now, we are focused on those highlights so the users can see those key moments that happened during the game. emily: how do you think things will change over the next five years? susan: as they have some ad models, subscriptions, they will be able to be more competitive to compete for those sports rights. emily: the headlines talk about youtube being at war with the music industry. you have everyone from taylor swift to paul mccartney saying they do not like the way you do business. do you see a future where there is a middle ground where everyone is happy? susan: working with the music industry, i have learned there are many constituents in the music industry and they do not all agree with each other. labels and artists and publishers, so i remain really hopeful that as online models of
both subscription and advertising become more developed, that over time, we are able to come to a place where everyone agrees on the future vision. we are starting to see the numbers really pick up. we are starting to see more revenue from advertising. we have paid out $3 billion to the music industry since inception. we have good growth numbers. overall, i think as more time goes by, it will become more clear on what these monetization models are, and we will be more aligned. emily: how are you thinking about vr? some people think google needs to buy or produce its own vr. susan: i think people are trying to figure out what is the best way because it is a new medium. we have a large collection of 360 degree video, so we are leaning in. we think it is a great way to have an experience where you can
really feel really feel immersed and experience that story. emily: harassment is a problem for a number of different technology companies. the comments on youtube are not kind. what are you doing to get that under control? susan: i think that is a really important area. we are putting a lot of energy into it. we have community guidelines. anything that promotes violence, hate, that would violate the community guidelines, so if there's something on our forum that violates the community guidelines or the user feels uncomfortable with it, they can flag it. it goes to a queue. it is reviewed to see if it meets the guidelines. if it doesn't, we take it down. we are trying to do more, and so, one of the things we just did that i think is impactful is we created this program called "creators for change." there are creators who are actually taking some of these tough topics and doing a great
job to encourage understanding, to encourage empathy. we gave them additional funding and have a fund of $1 million we gave to them. we are promoting them on social media. the idea is, how do we get creators who are so influential in themselves to help promote these positive messages of understanding and empathy across youtube? emily: do you think the internet will become a friendlier place? susan: all technology has good and bad sides to it, just like the real world does. there are friendly people and difficult people. i have seen all the good that has come out of it, and i have seen the way people are able to connect with people like them on the platform that otherwise they would not have been able to connect with. the goal is as our technology gets better and we are better able to identify what are the right ways to enforce, that we can continue to do an even better job and have, promote even more the good stuff on the internet. emily: where do you think
youtube will be in the next 10 years, more like netflix? susan: our goal is to be the platform for the next generation of media companies. youtube started out with cat videos and people uploading cool things they found in their backyard, and then we had creators and they started actually doing it for a living, and now, we have this new generation of creators who are building media companies on youtube. if you fast forward 10 years, you will see that there will be a new generation of these media companies that have really strong followings. they are able to create amazing content. it is going to be global. they will be able to interact with their fans in all kinds of amazing ways. i am looking forward to being a part of that. cory: susan wojcicki, youtube ceo on studio 1.0. turning to apple -- breaking news. digital glasses.
marco urban broke the story for us. mark, really? they have got to do this? mark: google glass really came out too early. it was a $1500 device and it had a lot of the flaws. apple is exploring their own take on glasses. this would not be introduced until 2018. they are in the testing and exploration phase right now. it is about ar. vr is encompassed, enclosed environment of virtual reality. augmented reality would be more maps or street view or applications for both of the augmented reality features as well as the real-life environments. cory: it is interesting that are willing to pursue this at google. there are issues with google glass, not just about price, but also the impact it had on society, the dumping of the users as the glass-holes. does apple think it could get
around this? mark: absolutely. they came out with several different bands and styles. i would be surprised if there were not several different styles and colors available for any user. cory: is it typical of apple to chase these things down? float trial balloons and the never pull the trigger? mark: it's possible. right, apple has done this in the past, explored tv, a full television set pretty extensively and then did not release it. they chose to go with the box approach. all integrated. the same thing can be here, but according to our sources at bloomberg, apple is exploring this glasses product. cory: good scoop, mark gurman. in a tie in san francisco. that does it for this edition of "bloomberg technology." one of the fastest-growing startups.
anna: drums treasury. tomer goldman sachs is said be the top pick for treasury secretary in the new administration. a week on from election day, the bond selloff slows. emerging market stocks and currencies have their first gains in a week. the may doctrine. the u.k. prime minister says u.k. companies have a responsibility to show capitalism can work for everyone and soften resentment of those who feel left behind by globalization. --are they pressing on to boost the capacity?