tv Bloomberg Technology Bloomberg January 20, 2017 11:00pm-12:01am EST
>> you're watching bloomberg technology. look at the th a news. with far fewer crowds than his predecessor and protests across the country, donald j. trump was sworn in as the 45th president of the united states. he wasted no time attacking the establishment, vowing to return power to the american public and deliver on campaign promises. he pledged that u.s. interests will be front and center of his presidency. police and protesters clashing several times today in the nation's capital as donald trump was sworn in. authorities had to resort to teargas as hundreds of thousands of demonstrators did damage to city blocks. more than 90 arrests have been made.
meantime, in london, hundreds gathered in front of the u.s. embassy to protest the inauguration. both umplet k. and u.s. protesters say they're concerned with the way the new president seems to be taking u.s. government policy. there were similar protests in germany. the senate has the votes to confirm james mattis as the secretary of defense. the senate armed services committee already voted in favor of the retired army general james mathis this week. mr. trump signed legislation allowing mathis to run the pentagon. global news 24 hours a day, powered by more than 2,600 journalists and analysts in over 120 countries. this is bloomberg. ♪ caroline: i am caroline hyde and
this is "bloomberg technology." coming up, it is official, donald trump is america's 45th president. we'll break down the historic inauguration day and what trump means for tech. plus, apple bites back. the most valuable company in the world sues qualcomm over patent royalties. and snap hits the road with a pitch. but first, to our lead. a new era in the united states. inauguration day for donald j. trump. the new york businessman has become president of the united states. he's already signing orders nominating his new cabinet. here to break down the details is kevin. kevin, we have been watching all of today's events, there was some lip service paid to technologies of tomorrow. but what was key to you? >> he is vowing to immediately get to work during a very short
inauguration address. he vowed to get the ball rolling on a host of issues from rolling ack key regulations like a -- regulatory issues like dodd-frank, increasing infrastructure spending, and lowering taxes for the middle class he vowed to be president for all americans, but again speaking in his signature tone he presented himself as a political outsider and someone who transcends political party. and then of course in classic trump fashion he ened up -- he ended with, he promised to make america great again. caroline: how did this resonate with the american public? >> i was on capitol hill and speaking with key aides to democratic members. it was a particularly partisan speech. democrats are already organizing in terms of how to serve as the opposition party to president trump. on monday, rex tillerson, his secretary of defense nominee, will get voted on.
they're quite, you know, pessimistic about their chances of blocking any of trump's nominees. that being said, republicans like with what they heard but there are several issues, most notably trump's position on the tans pacific partnership, which he opposes, that republicans are divided on. it'll be interesting to see whether or not and for how long if they do republicans fall in line behind this new scradmrgs or if we start to notice divisions between the tea party and more establishment type of republicans. caroline: an anti-establishment call from the speech. we'll be digging into what trump means for tech later in the show. but first, to a clash of two tech titans. apple has filed a lawsuit accusing qualcomm of monopolizing the market for chips used in wallet devices. it's speaking money that they say qualcomm withheld. this marks the first direct
challenge to qualcomm by one of its biggest customers. a great piece out today moving the market, first you, ian, it was earlier week now apple suing emind us what this is about. >> the fundamentals of qualcomm's business is it gets its profit from patents. if you make a phone, you pay qualcomm. that's what this is all about. that's the fundamentals. apple doesn't like that and is trying to do something about that. caroline: it feels they pay too much because the percentage is based on the cost of the phone and not the cost of the part. what does apple want to achieve by suing qualcomm? >> apple is saying qualcomm withheld money from it, big numbers, that it agrowed to pay apple in return for apple not talking to law enforcement or
regulatory authorities as part of the agreement that qualcomm claims apple signed. apple said, if you're subpoenaed by regulatory authorities, we're only doing what is right an just. that's what is at heart here. what apple wants is in a broader business case, business model, apple tries to have more than one supplier, that allows them to play them against each other, get lower prices and until last year, until the iphone 7, qualcomm dominated that. caroline: who wins out of this? it seems apple does not just ave to go to qualcomm. >> all of these licensing fees gave qualcomm a huge lead. that is getting whittled away. there is a potential for a market share shift there. but if you look at qualcomm's gross market of 50% and apple's s 140. -- is sub40%.
what apple wants a a transference there. >> at this moment when iphone sales have declined this efirst ke de-cline since they came to market 10 years ago, that puts extra emphasis on how much money they can squeeze out of every single hand seth. they want recurring revenue for phones and if they can squeeze the profit margins higher, that's important too. caroline: is this something we might see with others coming out and sue? >> back to the conjecture of who is behind all of this, it's no secret that korea, south korea, the most strident to come out so far is home to samsung electronics, lg, qualcomm's third largest customer. it's not difficult to imagine that hand set makers throughout the world would like a better arrangement with qualcomm. caroline: we'll be waiting to
see how qualcomm responds they haven't yet. how much is cause for concern about the billion dollars being withheld? >> obviously $1 billion for apple is a lot of money but they make a lot more. possibly the element is, program down right now, strike that down and tri-to claim advantage while you can. this is tim cook's apple, built the business on an extremely good and efficient supply chain. trying to, as we said, squeeze everything out of the supplies is key to the way he runs the company. >> we just talked to people to get their take on this they're like, this is a negotiation. qualcomm tends to win legal cases, take years and years. there's no immediate benefit to anybody here unless they can settle, unless they can settle rates.er license caroline: we'll be taking a look at qualcomm's market cap. that was a great scoop, thanks for coming on and telling us about it.
analysts were expecting less. at&t introduced directv in november and charges $160 plus or channels. donald trump paid lib service to the tech industry in his inauguration. president trump: we stand at the birth of a new millennium, ready to unlock the mysteries of space, to free the earth from the miseries of ts and to harness the energies, industries, and technologies of omorrow. caroline: what is in store for the tech industry in the new administration? how big of a change will it be rom president obama? he was seen as the first fully digital president. allen, i will start with you. harness the technologies of tomorrow -- will we see an
administration as open to technology changes as we saw under obama? >> i think it's hard to predict anything about our new president. i hear what he says but you know , he says one thing one di, and then the same day will say something else. i really, we've got -- we're living in an environment, we're going to have a lot of new things happening that are already under way. the autonomous vehicle, robotics, a.i., machine learning. all of those are going to have tremendous impact on -- in a positive basis. on the other hand, it's going to have a dramatic impact i believe other time on employment and his ability and desire to put people back to work. so they're two countervailing forces working against each other. i hear what he says and i don't think he comes with any particular background in this area, but it'll be interesting to see what he initiates. he does have some involvement with some of the people out in sill condition valley. dave, i'm sure, would have a
better insight as to which technologies donald trump will be helpful with. caroline: dave, which technologies will he be helpful with? >> i don't know if he'll be helpful with technology specifically. but he'll create chaos and volatility. while that may not be great for the rest of america, in general it's friendly to most entrepreneurs. we can react faster than most tra disal businesses ta there will be opportunities created. it sounds like there's a likelihood of repatriation of overseas capital, that's probably going to good for all. i think you'll see more investment in companies and funds. and i have a feeling buzz of the relationship with jared curb never and his brother josh who is a v.c., i hope there's a little conflict and some knowledge is pass aid long from him and my former boss peter tale as well. caroline.
it's odd we see a more positive environment coming from the performances from donald trump but on one side he's talking against the at&t-time warner tie-up. what do you think? >> i think it's going to be a positive environment if the president implements the things he's talked about doing and if congress will support him on it. if they end up lowering taxes, if they do repatriation of enormous swells of capital that have been abroad for the last umpteen years, that augurs well m&a activity. ve corporations will have money, we've seen them do buybacks, i think acquisitions is a fertile area to put money to work. >> it could mean exits for startups you helped spoth. it's interest also the talk of trade. we heard allen there talk of
it's potentially the robots that are the key issues of job. how much are you worried about barriers an borders coming up? >> you know, there are concerns, i think there's concerns both in being able to sell to customers overseas and buy goods and integrate those. there's concerns about immigration, potentially the new administration might have a tougher policy on letting entrepreneurs come to this country. i spent a lot of time with a bunch of people trying to put a startup visa to come together. there's kind of a rule that will allow people to come in with 250k in capital but that's not really legislation yet. there's questions about whether we can conduct trade freely both in the tech sector as well as more generally. i think there's probably concerns about the regulatory environment changing that could be for better or for worse, it's not necessarily clear. you might see a lot of loosening of a lot of regulatory agencies
that could be perceived as beneficial for companies going public put it could crow ate consumer privacy concerns as well. >> one of the things i take exception with on dave on is the market in general, meaning the business community, and i would include startups and anyone else involved in business activities, hates surprises. and what concerns me more than anything else as we look forward to the public markets and the private markets is will the mercurial that there won't be a confidence and a consistency of his program. if that happens, that causes people to hold on to their money and not to be as -- and to be reluctant to put it to work or to do startups and we don't know, you know, where we're going frankly at this moment. we'll see it pretty fast, i think.
caroline: allen, are you worried about putting your money to work now therefore? >> venture business has sur privated in all presidencies, high interest rates, low interest rates. there's an enormous entrepreneurial wave going on in this country. i think it will be hard to stop it. on the other hand, there are exogenous events and activities that could be surprises. we don't know what the health -- this change in obamacare will do if the president really goes through with this and doesn't find a replacement, will that impact people who want to start up companies are afraid to leave? it sounds strange but their existing health care programs that they have if they have to potentially restart something if you have pre-existing conditions, although he said he'll protect that, i think it's all uncertainty at this point.
caroline: a revolving door in tech. alex announce head will join uber after 15 years at google where he led the search tuition. he will serb as uber's senior vice president of engineering where he will head up the maps and marketplace division and work to scale up the self-driving unit. silicon valley leaders were among trump's most outspoken critics in the presidential campaign of now as trump come
into power, could dissatisfied leaders turn angst into a run for public office? there are rumors that mark zuckerberg is grooming his public image for a potential run of his own. and one of the few to back trump may be eyeing a run for california governor. joining us now, blomberg technology's sara and from new york, allen patrikoff. sara, let's starts with you. mark zuckerberg, his 2017 new year's resolution has a political flavor to it. >> absloutly. he's going on travels to all 50 states, trying to keck with the people there. he was in dallas this week for the testimony in the ock ewe ulous trial and went to a rodeo, he toured a data center, he's trying to connect with the people. now whether that means he's running for office, i think people forget that the u.s.
population is 320 million. the population of facebook is 1.8 billion. it's important for him to shape his image as the leader of that as well. ploy for not just a something larger. but he is trying to shape his legacy here. and absolutely we could see him have much more involvement in government. caroline: allen, i want to get your view on the lines between washington an silicon valley, the connection there. we've seen actually the top five tech companies pay more in lobbying than the banks have been mt. past few years. are they talking to each other seamlessly do you think? >> i don't think so. not yet at least. we just invested in a newsletter company with the three main people who came out politico and one of the purposes of this is to have a newsletter system that connects people out in silicon valley with what's going on in
washington. hopefully be an interface to explaining what that's all about and vice versa, by the way. because there has been a lack of total understanding between the two communities and so i, you know, again, i don't know what the president has in mind. i know there's certainly a lot of very talented people out in silicon valley who are politically motivated at this moment in time buzz of frustration over what the outcome was of the election. it would not at all surprise me. there are people in new york and the rest of the country who are also forming entities and frming conversations to what should be done during the next 180 days and what should be done in the next four years. caroline: we saw pictures of one politically motivated man who was on trump's side, peter teal. we heard there's potential he could be running for governor of
california. is he building bridges between the two sides, silicon valley and washington? >> i've heard other things too, i heard he might be ambassador to jer germany. so i think that teal , he told "the new york times" he doesn't want a position in the trump administration but i don't think that that -- i think that we've seen other the last year that he does really care about the shape that policies take. and would like to get more involved. and so i think that would be really interesting outcome, especially considering his comments recently that he would be cool with california's secession. caroline: always a slightly offside take. >> con trarne always. caroline: great way of putting it. lastly, in terms -- we've seen the waves of those high in office come to silicon valley to take roles, condoleezza rice, colin powell, we've seen the
campaign manager of obama come to work with uber and the suck everyberg foundation. any chance obama could be coming this way? is that an obvious track? >> i think i'll take him at face value. all the pronouncements he's made the last week and last month is he is going to become, he is not going to sit on the sidelines from a political standpoint. he's going to comment on what's happening, and be, you might say a shadow cabinet of one to what happens and not just stand by and observe. i think he's very definitely, and i don't know this personal knowledge, but everything i read is he is not going to be a passive, like some other presidents have been, just taking that as a position. caroline: allen, thank you very much indeed. thank you for your time. sar remark thank you also for joining us. coming up, we'll continue our
>> let's begin with a check of your first word news. president donald trump plarninged -- flanked by first lady melania and other family members took the oath of office on capitol hill at noon today. in his inaugural address , he reiterated promises he made on the campaign trail. >> from this day forward a new vision will govern our land. from this day forward, it's going to be only america first. america first. >> former president barack obama thanked supporters today before departing for california. mr. obama spoke at joint base andrews in maryland where he traveled by helicopter with
former first lady michelle obama. >> this has been the privilege of my life and i know i speak for michelle as well. and we look forward to continuing this journey with all of you. i can't wait to see what you do next. >> the obamas plan to stay in washington until their younger daughter finishing high school. more african nations are recognizing gambia's newly inaugurated leader. south caffer rah says it recognizes him and look forward to a close working relationship with him. the country's former president is being urged to step down peacefully , he refused to leave since losing leks in december. turkey has extended the state of emergency in effect since the failed coup last july. speaking on bloomberg television today from davos, switzerland,
the deputy prime minister said the cu fews aren't helping increase confidence. >> it doesn't help but turkey still, despite our occasional issues is still a democracy. let's face it. had any other country been subjected to the type of shock that turkey has been subject to you would have a lot more draconian stuff. >> thousands have been detained or imprisoned since the coup. a referendum on constitutional changes may soon follow. inmates with makeshift weapons held their ground at a prison in brazil where 26 were recently killed. tensions remain high one day of inmates fought in the yard and set up barriers. authorities have not regained full control and have not provided specifics. exican drug lord joaquin "el chapo" guzman was hauled into a u.s. courtroom and then placed
into a mechanics mechanics -- a maximum security facility ha -- that has held some of the worth gang tersters and criminals. this is bloomberg. caroline: that the "bloomberg technology," a big day in the u.s. as president trump takes the reins of a divided nation he reiterated promises he made on the campaign trail to make american interests his focus. let's welcome in kevin from our d.c. bureau. harness technology -- tomorrow's technology is what he said but what can we expect from trump? >> he's facing increasing pressure to do something about cybersecurity. facing pressure not only from democrats but also from
republicans within his own party as a result of russia's meddling in the u.s. elections. there is of course even more growing pressure for investigations within congress. but the second thing that perhaps this is where we don't know exactly what he will do, is that he's vowed to reshape the infrastructure of government agencies including the i.r.s. to better the technology to what he argues bring it up to speed with the modern time. caroline: a few tech issues at the heart of that, kevin. what about come monday, hitting the ground running as he promised, who what do you expect? >> with regards to technology we have to wait and see. over the next couple of day this is weekend and on monday i do anticipate we'll be hearing a lot about things like how republicans will get rid of key portions of the affordable care act or obamacare as well as tax reform and rolling back
regulatory regime structures from everything from the environment to dodd frank. but with specific regard to technology, so far there hasn't been much attention on that. i do anticipate more calls for -- on cybersecurity on monday to coincide with the senate voting to confirm rex tillerson as secretary of state. caroline: i know you'll be on the ground for us. thank you and a good weekend. now it's a new era for the tech industry as president trump takes office. rlier i spoke with our executive editor and one of our kohl mmm nists about the challenges facing the sector as a whome from the biggest names in silicon valley to the startup scene. >> i think there's corporate leaders in tech and beyond optimistic about the possibility of tax cuts and less regulation, things all global business leaders like, including people inside of tech. >> when you've been speaking to
some of the biggest companies have they been exuding concerns about hiring talent or sit optimism in bringing money home and being able to invest? >> i think there are concerns about the uncertainties of the trump administration. there's a paradox. a populist message but a pro-business reality. and the tech community is delighting in things like a lower corporate tax rate, tax holiday for repatriating overseas capital. things that concern the tech community, antitrust, we're looking at to head the d.o.j.'s antitrust division. law professors who are mostly laissez-faire about the trust. it seems like the chairman of the f.c.c. is looking for net neutrality. we see telecoms probably combining and reaping the benefits of the net neutrality rollback. >> we talk about the tech sector that dominates the 10 top
company bus it goes to other area. what do we think that community is feeling about donald trump? >> i think that's a big question. so the net neutrality issue is a huge one. let's look for the giant company -- less so for the giant companies and more so for companies coming up. if you're an online video startup right now i'd be concerned if the f.c.c. rolls back net neutrality rules, you will have less access to consumers without paying up. so that's a big issue. talent is another one we saw kind of this revolving door but in a god way between the white house and the startup community people going back and forth. >> con lee zoo rice went to dropbobbing. >> it's hard to imagine that happening in a trump administration. >> i would add one other challenge for to the startup community. it is fueled to a remarkable by energy from immigration and immigrants. they start a majority of the
companies in silicon valley, it's remarkable. immigration policy will be changing under the trump administration. >> what's so fascinate, brad, you've got a book coming up, the first opening passage is about how the startup founders of uber were at president obama's inauguration. do you feel that era of innovation could thrive? >> i don't think entrepreneurs exist or thrive at the behest or policy of the american government. obama did embrace entrepreneurship. it's no coincidence that the founders of uber and air bnb were in the crowd that day. they used entrepreneurship as sort of foreign policy. loo exthey serve the -- they started the global entrepreneurship sum summit and held it every year in place like mare kesh. i don't see that happening under the trump administration that i said the global entrepreneurship
will continue but it seems like the u.s. government will be les of a sponsor. but nothing can stop silicon valley at this point. caroline: that was part of my onversation earlier. allen is still with us, you served on councils, commissions, under clinton, under bush, under obama, does politics affect your investment decision? >> i'm glad you asked that. i don't think it has any impact whatsoever, certainly on my investments, or on any other venture capitalists i know. we all are very optimistic and positive looking about the outlook and are involved with exciting new technologies with exciting new young people and i don't think there's any startup that i've come across or haven't that is focused at all on the grand political scheme and they're focused on the excitement of the concept, the
idea they have and implementing that. and even to tell you the truth, i don't think that changing the tax laws have any impact. first of all, they're not at the point they're paying taxes, most of them. they're at such early stages. so i think they are full of energy and the only thing that can happen is if the president does something to dampen that enthusiasm and energy. i think it's hard to stop though. caroline: what sector most excites you? >> there are so many things happening today. with talked and the autonomous vehicle. i was with one of the mayors, one of the major cities in the country last night. he was talk, i hadn't even thought about, there are programs out five or 10 years where they're going to have a second layer to highways which will be in effect drone like vehicles where we may have double player -- layer of people commuting whether on the bottom
through autonomous vehicles or on top through autonomous airborne born vehicles. it will double the capacity of our highways. i think that robotics is all over the place. the major thing, i think, is a.i. and machine learning. that is affecting every industry and it's unfortunately at the same time it's reducing the need for people. a lot of automated activities that people that are boring and have been done by individuals for time in memorial will be replaced by machines which is, it's an inexorable trend i don't think anyone can stop. >> something i'm sure the new president will have to tackle. thank you so much for all your time today. now up next, our full analysis of what the trump era will mean for the tech industry. we'll discuss the new
now democratic chairman tom heel wheeler sat down friday as the incoming administration took office. pi is known for -- pai is known for blocking the net neutrality rule. he could take over with a 2-1 republican majority. continuing with our theme this hour and how the tech secor will be impacted by president trump, i want to focus on immigration because it was one of trump's most controversial points throughout the company and he's
-- and we'll look at how this cowl impact the tech visas silicon valley companies depend on. you have investments across 60 country, crouff been helping startups in the thousands. is immigration something that's worrying the founders? >> we're concerned with trying to make immigration easier for people. we think the flow of people across board sers positive for business an innovation. in particular, a lot of tech companies in silicon valley have been started by immigrants an the children of immigrants. the entire "beowulf" area is full of people from all -- from other places who started technology companies here and work for technology companies here. caroline: do you think sense will prevail? will we see visas being supported? is it something you're talking to washington about? >> we have done a lot of talking to washington about this issue, as far back as 2009 and 010,
several of us went to doc try and get the startup visa started. paul graham from ycome by nator wrote about that -- from ycombinator wrote about that we got support from both sides but couldn't get the policy across the able. i guess the administration was challenged in that they were trying to get a lot of other issues across. caroline: when you're looking at the companies you're investing in, do you don't to look outside america even more so than you are now because of what's happening because of political uncertainty? >> when we first started investing globally it was because of opportunities around the world. there is a lot of volatility. we thought maybe if we diversity across many funds and country, we'll be less vulnerable to political instability. little did we know that that might be happening here at home in the u.s. but we started funds in places like turkey and thailand and we
are really strong believers in the engineering talent there and market opportunities there. caroline: despite political instability there. >> sometimes that political instability is maybe more extreme when viewed from afar than right up front. not try to -- not trying to make light of those situations but i think there are a lot of positive forces investing in entrepreneurship can have around the world that are positive for those countries and for the u.s. maybe in ways you overlook sometimes. caroline: is there a particular area we could -- that could thrive, we heard from allen talking about a.i. and robotics being a big thing, but are these investment opportunities almost in the current circumstances? >> absolutely. it's funny sometimes the talent for those things is coming from the same places the threats are from. caroline: you're looking at asia? >> there's lots of smart people in russia and asia. we're happy to invest in those
people too. there is absolutely going to be more attention to cybersecurity. there already was anyway. f you look at firms like palanteer, they're doing a lot for government. i think there's lots of opportunity there is. there's lots of opportunities outside all the sexy topics. a lot of things we do are basic, everyday services. ecommerce, business productivity tools. those are popular, not just in the u.s. they're growing all over the world. caroline: are startup founders based in the u.s. going to have a slightly harder p.r. exercise to draw talent to the united states now? are is there always going to be a calling to come here? > i'm not a fan of some of the things the incoming administration stands for, including civil rights and civil liberties, i think most of the policies will be aligned with positive business outcomes, not all of them.
i do hope some sane guidance, sage guidance, even if it comes in the form of younger folks in president trump's camp, will give him good advice about why technology and innovation is helpful for job creation, not just innovation. caroline: when you're looking at the next four year, the startup there, are you saying go for gold, go for i.p.o.'s, remain individual. >> i don't care about i.p.o.'s specifically. caroline: are you expecting the m&a to be far more active? >> we've seen a lot of m&a activity. last year activity was close to or above $50 million. the i.p.o. market was around $50 million. even though one of our companies went public last year an hopefully will this coming year. i feel we're going to see the majority of our activity come from m&a activity. i suggest m&a and i.p.o.
activity will grow under the trump administration. some from tax poll ses, some from maybe loosening regulatory policy. caroline: let's hope that helps. thank you very much. it's been wonderful having you on. dave mcclure, founder of 500 startup. a story we're watch, samsung has found out what caused its note 7 note phone to overheat. it will be announced that it was caused by irregularly shaped batteries. it forced samsung to kill the line and recall the phones costing them millions of. the parent company of snapchat is said to have more than 100 million active users. more details on snap's metrics, next. ♪
the potus twitter handle. the first tweet on the account was text of the inauguration speech. his first tweet as president, today we are not merely transferring power from one administration to another or from one party to another but we are transferring party from washington, d.c., and giving it back to you, the american people. #inaugurationday. president obama amassed more than 13 million followers on the starting it after in may, 2015. now all his tweeting live under potus 44. this week, trump turned over his main mobile phone for a secure device with a new number. it will help stop potential breaches and keep those who had
the other line from contacting the president directly in the future. let's get to a story not on politics but on snap's upcoming road show. the company is hoping to convince public market investors it's worth upward of $20 million by stressing how important snap s to users' daily lives. bloomberg technology's sara fry broke the story and joins us now from our newsroom. how important, bhar the figures we're getting in term of addiction to the app? >> let's be clear, these are numbers given to the banks that are underwriting snap's i.p.o., so this is still private discussions happening before they determine just what they should price this i.p.o. at. $20 billion is the number we're hearing for the valuation. what we can glean from this is that snapchat cares desperately about making sure that these investors understand that how --
its users are so enmeshed on using the app on a day-to-day basis, it's an integrated part of their lives, they're coming back not just a monthly active user like twitter touts but daily active users that are snap, saving things to memories and chatting on the app. it's something that sets them apart if facebook and twit for the that sense. caroline: tell us how it sets them apart. they were all about monthly act i users, expansion outside the united states, not how much it's used every single day. >> so snapchat is not really trying to do this race to more and more monthly active users like other companies have. what this company is trying to emphasize is the average revenue per user. they're going to focus on more developed markets to have healthier advertising ecosystems an more proliferation of smart phones to make more money off
people using the app. they're using things that are -- that people will interact with. one of the things they're talking about in these meetings is filters, they can be sponsored. we heard from advertisers about other methods like lenses on people's snaps that are sponsored. so it's a lot more about involving people in the daily app. >> what's interesting is, of course, the court case is ongoing. how much do you think these numbers are digested and need to be proved by the executives to support the $20 billion to $25 billion that seems to be the amount? >> it is going to be a very high bar for snapchat and snap inc. to convince people that they have what it takes to justify this very high valuation. and certainly consensus -- and certainly the discussions brought about by the lawsuit will be part of the equation.
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