tv Bloomberg Technology Bloomberg July 6, 2017 11:00pm-12:00am EDT
alisa: you are watching "bloomberg technology." president trump and the first lady have arrived in germany. ahead of the g20 summit. chancellor angela merkel who is playing host in her hometown of hamburg also met with trump. the priorities of the g-20 include climate change, immigration and trade. trump seems that odds with the majority of european leaders. police and protesters have been battling in the streets of hamburg. german police fought back protesters with water cannons. germany's second-biggest city brought in reinforcements to assist local police.
organizers say the planned protests over the summit are over. president trump and russia's vladimir putin will meet tomorrow with analysts watching for clues about the future of relations between moscow and washington. a solution for north korea is expected on their agenda. meantime, defense secretary general jim mattis says u.s. investigators are still scrutinizing details of the intercontinental ballistic missile launch. secretary mattis says the pentagon was not taken by surprise when north korea fired off that missile on july 4. global news 24 hours a day powered by more than 2700 journalists and analysts in 120 countries. i am alisa parenti, and this is bloomberg and "bloomberg technology" is next. ♪
caroline: i'm caroline hyde in for emily chang. this is "bloomberg technology." coming up, the bloodbath at microsoft as the software giant turns its full attention to the cloud. why thousands of employees are out of work. and, the rush to get sales staff up to speed. plus, the investors banking on britain to keep its title and bragging rights of europe's leading tech hub. why vc's are pumping billions into london's technology sector despite brexit. and, a cofounders resignation and the downward spiral. the chinese tycoon's plea for more time to repay debt and his focus on electric cars. first to our lead. a major reshuffling going on at microsoft. the tech giant confirmed it is cutting thousands of jobs. the number of jobs to be cut range anywhere from 3000-5000, and most of those jobs in sales and outside the u.s. that is out of the company's
over 121,000 person workforce. the move is part of the company's reorganization to better focus on selling cloud software. a spokesperson told us "like all companies, we evaluate our business on a regular basis. this can result in increased investment in some places and from time to time redeployment in others." joining us now to discuss is cory johnson in san francisco. in london, frederick who i'm pleased to say is staying with me the entire hour. cory, bring us up to speed. there is a focus going on in terms of the cloud and a.i., and the memo that bloomberg saw on monday seems to say that this is because of a huge $4.5 trillion market opportunity. cory: it is about a big shift at microsoft. we have had the world go from a
client server network to things happening on the cloud to a different way to sell software. pc's are not the center of the environment. microsoft built its business and built its staff around the notion of pc's. and a client/server world. as they made this pivot, they have decided some people are not going to be along for the ride. they made some disastrous acquisitions, most notably nokia. having to write off those expensive acquisition also means writing off a lot of people and their jobs. if you go to the bloomberg terminal, there is a wonderful function called ms equity go and type in loss. and you see a table with each one of those news stories on the job losses. but you can see the long-term stock price as it goes across there. and all of those little circles are job cuts. if i zoom in, this is 2014. layoff, layoff, layoff. even as the stock creeps up, people are losing their jobs like crazy.
you can imagine the big changes going on. caroline: let's get the take of an investor, because frederic, when you look at these sorts of moves, the focus is on the rivalry between amazon, ibm, and google, microsoft. all of them want into the cloud and want into a.i. frederic: absolutely. for a company like microsoft, they are attacked from both sides. they have a very strong position in the enterprise world. google, which is a consumer facing company is now in a position as an a.i. first company. that is bound to impact the enterprise world. on the other side, the smallest startups from emerging in the enterprise world from silicon valley. guess what? they are now looking to go public. they are attacking as well the
larger enterprise business of microsoft. caroline: cory, talk us through it. it is interesting some of the reports are saying that most of these layoffs are going to happen outside the united states. is there any reason as to why we will not see the rest of the international business hit more? cory: a real focus on getting his house right first. if you look at the annual cuts, while these numberes are really big, and they certainly are, the 3000 cuts -- if you look at the annual job cuts numbers what you really see , if we go from 18,000 in 2014 to only -- and i'm sure it does not feel like only to those people losing their jobs today or over the course of the next year -- but nonetheless, when you go from 18,000 to fewer than 4,000 this is a lot more fine-tuning than it is a massive change for microsoft. they took the big pain early, which is what all of the management people say you have to do when you look at the world of layoffs. you just have to be as
aggressive as you can, early on. when you look at these pictures we see from their headquarters in redmond, in the sunny seattle, yeah, not so sunny up there. maybe this time of year. indeed, it is the kind of move you would expect to this company to make as it starts to whittle down as opposed to taking giant cuts. caroline: you mentioned there how also microsoft and amazon and ibm and google are seeing the rise of these startup culture starting to eat into some other pie. you mentioned dropbox. where are the opportunities to be investing in a.i. and enterprise startups at the moment? frederic: in the case of microsoft and the application layer. every task in the enterprises -- enterprises going to be a.i.-enabled to a certain level. it is still in the making. microsoft has got to react. i completely agree with what has been said. the scale of microsoft, it is not that big a change.
absolutely. over the years, they have had not so great track record of making acquisitions. getting the advertising space at the wrong time and mobile making the wrong pick. the big bet for them was going -- in.inked in going after linkedin. we are interested in where they are going next. slack and dropbox could be targets for them as well. caroline: do we think m&a is in the cards? cory: m&a has been in the cards for a long time. but i think one of the most important metrics to look at is the revenue per employee. what is the productivity? if you look over the course of the last 10 years what you see are two things. when economic results really hurt the company. in 2009 and the recession starts
in 2008, there was a big drop in productivity, revenue per employee. in 2014 when they had to make those first big cuts, a big decline in revenue per employee. and you see a little bit and -- in you can see that microsoft 2016. has taken the seriously. they want to grow their productivity. they want to grow revenue for employees. that is the length we should imagine microsoft trying to run their business. and clearly, taking a big step here, smaller step than they have taken the past, but trying to get that revenue per employee up. caroline: see how analysts react to this, 27 buys and only two sells. we will see how they digested this news tomorrow. cory johnson, always great to get your perspective. felix capital and managing partner is sticking with me. and a stock we are watching -- shares of blue apron continue to fall since its public debut. shares closed at $8.00 a share thursday compared to its ipo price.
it's a significant cut from its initial target price. back then it was as high as $17.00 a share. now, coming up, we dive into the european tech scene. how the u.k. plans to defend its title as the tech hub. despite the looming uncertainty of brexit. we are live streaming on twitter check us out. this is bloomberg. ♪ caroline: now a story we are
customers will be asked of they would like to leave a tip. it is a major reversal for the embattled company. lyft has always allowed gratuities. meanwhile, london appears to be defending his title as europe's tech capital according to london partners, an agency for the city. venture capital firms drove more than $2.3 billion into the city's technology center since last year's brexit vote. continuing to outpace other european cities, including dublin, berlin and amsterdam. one firm, felix capital, just announced it is raising $150 million in its second funding round. based in london the firm backed , some of the city's biggest successes. still with us is the founder and managing partner frederic. wonderful to have you with us. congratulations. it is your second fund. only two years ago you raised $120 million. now you are back for more. you have raised is there any $150 million. point, the fact you are london-based make any money -- questions about brexit?
frederic: clearly, when we started two years ago, that was a big -- there was no question about it. especially with our positioning around the creative class. london is such a brilliant example of technology and creativity living together. two years post-brexit, clearly there were some questions. that has not stopped investors from backing us, but the question was, what type of opportunities are you going to be able to find in london? based on the way we work, we tend to go after -- based on where they are. we do not expect to do everything just in our home turf in london. i first met -- in portugal where he started this company which became a global platform for fashion. our job is go, find and convince the entrepreneurs to work with us. caroline: a portuguese leader
now living here. you are in goop, which is a u.s. based company. what are you focusing on with this second fund? where do you see the opportunities lying for you? frederic: the second fund is very much a validation of our original a couple of years ago. it is too early. we back companies for the very long-term. it takes 5, 7, 10 years to build a company. the premise behind felix as we believe there is an opportunity to have a venture firm that focuses on the lifestyle. by this we mean the emergence of new -- a first brand led by founders which are impacting the way we lead our lives, the way we aspire in different lifestyle segments from fashion to beauty to food to well-being. everything is changing to digital. we are looking for those founders who've got a sense of what people want.
we're building communities in a very authentic, organic way. caroline: you are going to be writing checks for $2 million to $5 million. what sort of level do you see yourself going in at now? is it series a or b? frederic: that is why want to be a flexible investor. we are not dogmatic or want to be the first investor. we want to back the best founders in the segments we believe in, where we can see a very big opportunity. caroline: how do you find these founders, how are you seeking them out? frederic: it is both an art and a science. we used data, we look at signals. these days, you can track things, you can measure looking at the number of likes on instagram, and twitter. but, at the same time, we are very founder-centric.
while we look at data, we like to see passion, we like to see emotion between consumers and products, a service or brand. so we combine both art and science. our business is always about making decisions on the partial data, it is never black and white, it is always gray. caroline: i'm going to be asking you later about the geopolitics in europe versus the u.s. versus the u.k. and brexit but i want to ask about valuations because we are looking at companies, the nasdaq is down a percentage point on thursday trading. we see facebook, the fang dominating the most valuable companies in the world. how is it affecting the private sectors and the companies you want to back? frederic: our business is -- as we invest really early, way before, but valuations are always impacted by -- public multiples, generally. investing early, valuations
become more of, it is more of a dilution for founders. if we invest x, 1, 3, or $5 million -- where does that money take the company do we believe that the post evaluation will be fair? we need to be disciplined. at the same time eventually we , should not be losing a deal on valuation because if the company works, valuation usually will not be as critical. caroline: $150 million that you raised, he said the books were in excess of $200 million. you're not naming who your investors were last time -- it was unilever. who, is it institutional money, is a global money? frederic: we are a start up in venture capital. the bar to back us two years ago was very high. to our surprise, the investor base of the trust fund was very
institutional. people understand the venture business. there were opportunities to invest across the u.s. and asia and china and chose to back felix because they thought we were offering something different, something they did not have in their portfolio. the reason why we started felix was to do something that did not exist in the markets, where we give the opportunity to our investors to access a different opportunity. but even more importantly, we want to offer something to founders they do not get in the market. so, the investor base is very traditional, pension funds, foundations, family offices. and for the first time now with a new fund we have investors from asia and we were able to -- to broaden the base and get people back for the long-term. caroline: fascinating. us, we be sticking with will talk much more about the brexit debate. coming up, with the release of the u.s. jobs report coming up friday, we will hear from the ceo of hubspot. and what needs to be done to close the skills gap. this is bloomberg. ♪ caroline: berlin-based
digital music service soundcloud is cutting nearly half of its staff. 173 of its 420 employees. it's a cost-cutting move designed to increase its war chest against bigger rivals like spotify and apple music. soundcloud warned it was at risk of running out of cash. operations will be consolidated into its headquarters in berlin and an office in new york city. offices in san francisco and london will be shuttered. and the bigger picture on jobs here, of course, looking at the united states. after years of the payroll growth of 200,000 a month, hiring has been disappointing. more and more companies are complaining they cannot find the right kind of workers and it is particularly true in tech. on the eve of the june employment report tomorrow, our
international economics reporter michael mckee joins us from cambridge, massachusetts, for more on what people are calling, mike, the skills gap. mike: yeah, caroline. if you are high-tech company you have a presence in boston to google, amazon, they are all here. with more world-class universities in one place than almost anywhere, it is no surprise. what is a surprise is the size of the skills gap here. in fact, in massachusetts, they are ranked last in the u.s. for a company's ability to hire and attract tech talent. we sat down with brian halligan, the founder and ceo of the sales and marketing software company hubspot. >> here we've probably got 1600 employees and 300 openings right now. mike: how long will it take you to fill those? >> we'll fill all of those, but it is continually rolling and we have new openings. in any given time over the last couple years, we've had at least a couple of hundred openings. we're always hiring, always growing, 1700 people today. a year ago we had 1100. we are constantly filling new
spots. mike: what is retention like -- is there a war for talent? do you have google and amazon trying to raid you? >> we have a huge war for talent. funny story. we did an "undercover boss" thing, where i manned the front desk and i answered the phone and i had a headset on. it was fabulous. and i got about 30 calls over the three hours. i'm going to guess half of them were from headhunters recruiting into our organization. they're just pounding in here. there is not much i can do about that. i do not hang up. i certainly pass the call through. we try to make it a fabulous place to work. make it a fabulous place to work and attract the people and develop them. and if they love it here, they will not leave that is our , attitude on it. mike: for a guy at the center of higher tech education, he is surprisingly critical of the way the boston schools are preparing students. >> it is an interesting point,
in the computer software universities, they're on the , cutting edge to a certain extent. what happens in the universities, if the computer science class is out of date, they're teaching a class in fortran or pascal, an old software language no longer relevant the students themselves , are doing side projects. the students are up to speed on the latest technologies. where the schools are way behind are in marketing. we build software to help people market better. most schools are teaching the marketing playbook that worked in the 1990's, not the playbook that works in 2017. very few schools are teaching how to sell it in the way that matches the way people buy. we're trying to work with local universities -- we work with harvard and m.i.t. -- on some programs like that and we have our own academies that teaches people how to do that kind of stuff. mike: citing mark andreessen's maxim that every company is a
software company these days, every company needs software engineers. he says he does not see things getting better anytime soon. >> over the long haul in the united states, i just see the computer software industry eating up more and more industries. and every company today to a certain extent is becoming a software company. it is run by software. and so, i think the problem gets more acute overtime and companies like hubspot will have to be very competitive. -- competitive with salaries. we will have to make it a great place to work, and have to open new locations to attract people and train people. over the next 10-20 years, it will get tight. mike: hubspot already has its own internal university, trying to teach students the skills they need at their company, perhaps the wave of the future. you and i should have on into computer programming years ago. becomelly if we had coders, we would be rich today. caroline: woulda, coulda, shoulda. great to see you on the banks in massachusetts. thank you michael mckee.
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delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. kong, 1:29 p.m. in sydney. have endorsede.u. a preliminary free trade pact -- a rejection of president trump's protectionist leanings. japanese prime minister shinzo abe and others gave their blessings when called to eliminate 99% of tariffs between the two partners. the agreement follows more than four years of talks. the e.u.'sz top brexit negotiator warning even a partial withdrawal from the block will have consequences for the u.k.'s ability to interact.
they say it is not feasible. it is a blow to theresa may's conservative party. they say it is not possible. macau casino operators have been dealt a better hand, morgan stanley raising its forecast for the year. the bank expects revenue to rise from 2012.up wynn gaining market share from mass-market for dissipation. in march, a morgan stanley analyst said wynn's stock could double. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. bloomberg. >> i am a sophie kamaruddin with a check on the markets. that global selloff looking unabated in asia. asian stocks looking at the biggest loss in four months.
bonds of falling in the region. the last time a and stocks fell together was back in the 2013 taper tantrum. some are warning the party is over and central banks are set to take a punch. a few bright spots in asia 0.1%. the won gaining but set for a six week of losses. the qatar at a benchmark. the nikkei 225 down one third of 1%. this, despite the yen falling despite its major peers. deepening on the back of the boj's move with a deal. aussie shares of the biggest in the region. look how it climbed in aussie bond yields, in particular, the 10 year, which could be headed toward a 3% in the coming weeks if they can beat 2.71%.
oil had doldrums. brent and the bti falling 1.2%. gold falling a second day, trading at the lowest since may. ♪ caroline: this is "bloomberg technology." i'm caroline hyde. world leaders are gathering in germany ahead of the annual group of 20 summit. brexit and trade will be among the major topics discussed, but not without some resistance. thousands of protesters took to the streets ahead of president trump's meeting with the russian president vladimir putin. that is going to be at the g-20. u.k. labour party leader jeremy corbyn spoke with bloomberg about the future of great britain's plans for leaving the european union. >> listen, we did very well in the election. we did not win the majority of seats but we put out a very
large number of votes. we put forward a credible economic alternative to this government. this government does not have a majority. it has done a very strange deal with the democratic unionist party and does not look to me to be very stable. guy: you think things can change quickly? >> i think things could change quite quickly we could at some , point have another election. i do not know when but we are ready for it. i'm very ready for it. guy: very ready for it? there are many unknowns in british politics at the moment. >> are you going to tell me about the known unknowns? guy: no, but one of the great unknowns is where jeremy corbyn stands on the details of brexit. and we hear this all the time. i'm curious as to why you are being as vague as you are. and when you will provide us with transparency on your thinking. >> fundamentally, we want to make sure there is a fair free trade access to the european market. that is crucial. half of our trade is with europe. secondly, that we do not become sort of offshore tax haven on
the shores of europe. hence, the response i gave to the chamber of commerce speech. i gave questions now about levels of taxation. thirdly, the european nationals are guaranteed unilaterally rights to remain in britain with full citizenship and rights of family reunion. i think that is crucial. and that we maintain that the university connections across europe and that we maintain a broadly similar level of regulation of consumer products, environmental worker rights. i'm sorry, it would be a partnership with europe in the future, not membership in the european union. we accept the results of the referendum. guy: is membership in the single market compatible with brexit? >> well, the single market is a concept that is required membership in the european union. and so, what we are looking for is a tariff free access to the european market.
our shadow team has had many discussions with the e.u. officials, members of the european parliament, and we have a good relationship with socialist parties all across europe who want to work with us in the future. and i will be in brussels thursday having an extended meeting with michel barnier to outline what our issues are. caroline: that was bloomberg's guy johnson with the u.k. labour party leader, the leader of the opposition, jeremy corbyn. despite uncertainty surrounding brexit, as mentioned, london is still the leader in venture capital in europe. in the first half of this year, venture capital investment in london-based tech companies reached over $1.4 billion. still with us is the partner at felix capital. we were talking before about perhaps the fact that you're london-based -- it does not seem to matter. does it matter -- are we seeing the talent pool, the rich diversity of entrepreneurs still staying here?
frederic: our business is about people. we back entrepreneurs. we provide them with capital and that is a tool for them to get the best talent around. going forward, there is a big question on what access to talent will get in london. and that is true for startups and what is also true for what made london the capital of the tech ecosystem in europe. the most prominent city in europe. facebook, google, amazon. they have built a big campuses even apple is planning to do , that. these companies come to europe, come to london to get the best talent. so, we will see what happens, they will need access to the best people. caroline: and, therefore, when you look at the $150 million that you just raised in the second find a new look at ways to spread it, you're going to be looking globally. but how much do you think will be potentially landing in u.k. entrepreneurs' hands?
we have seen cash go towards improbable coming from softbank. frederic: we have a global ambition for companies. we are very focused on europe and selectively invest in the u.s. we definitely are very attached to our european roots. it was interesting the numbers mentioned earlier with london growing most of the capital in the first half of the year. there were two big transactions that kind of change those, skewed those numbers. improbable and -- with $400 million. you take those two out of the equation and the numbers look a bit more balance. in the past, what we are seeing is that london has a bigger share of those companies that could attract global capital
from softbank from japan, from the case of far-fetched for those companies will become the big champion of tomorrow. well will they be based? in london, in berlin, in paris? or barcelona? caroline: let's talk about paris. interestingly, of course, i look at the next two years of uncertainty facing the united kingdom. meanwhile, you suddenly have leaders, like macron and justin trudeau in canada. there has become a lot more opportunity to invest in your hometown? frederic: france has been the first market. you listen to me, you know i am french. we do have an angle in the country, but that is not why we invest there. we invest talent. and we have been very impressed by the talent that we have been able to find there. caroline: what companies, what verticals?
frederic: we look at brands, technology brands. we backed something in the food space, which is created a brand for online access to good food at affordable prices. that we backed a couple of months ago. and miracle, a software platform enabling retailers to build their own online marketplace, competing with the likes of amazon. caroline: how does your stack up versus silicon valley versus the u.s.? frederic: it's their interest in to see how -- over 15 years as an investor. and i've seen the rise of ambition from founders. now i've got access to three things. the same platforms -- to silicon valley. everyone has got a mobile phone in the pocket. global access to the internet. kind of a level playing field. then better talent. young, smart -- they want to work for facebook google or the best start ups.
and the third thing is capital. as we have seen, capital can fly from one country to another. and there's no limit to that. so it is a very strong environment and we are very bullish about the potential for, from europe to be global players. caroline: it has been wonderful having you. he's my guest host for the hour. a new bloomberg forecast says electric cars will outsell fossil fuel powered vehicles by 2040. that is faster than estimated. according to a new energy finance team, battery prices will plunge, turning the global auto industry upside down. that will also signal economic turmoil for oil exporting countries. faraday future hope to be part of this electric car push. coming up, we discuss the start -- the start up that in the 1050 january horsepower ff91. its backer is under pressure from debtors.
caroline: tesla has not had a good start in july. elon musk's company has probably has seen its stock plunge falling 14.5% this week, the worst three-day slump for tesla since february, 2016. it was triggered by a disappointing second-quarter delivery numbers. and let's dig into the bloomberg terminal, if you want to get this graph. you will see tesla's decline. it has pushed its market capitalization back below gm. look at that white line below the yellow. much was made when tesla on the white line was able to surpass gm earlier this year.
now, staying with electric cars -- who built a sprawling tech , conglomerate, will have more time for faraday future. the u.s. based startup is trying to raise funds to bring the ff91 electric car to the market. jia resigned as chairman days after a chinese court froze billions of dollars in assets he controlled. joining me from new york, selina wang. take us to the background. this is such a fall from grace for this chinese tycoon. he is now no longer ceo or chairman. selina: this is the latest thing to happen in the continuing downward spiral of leeco and his sprawling empire. this one famed executive is now not only a step down as ceo. now he is stepping off from the board and stepping off from chairman as well. and this comes days after $182 million of his assets was frozen
in china after repeated failure to repay interest on loans. now, this means he has more time to spend on faraday futures. but they are under a lot of turmoil they struggled to raise , money. they did hire a new cfo to bring order and raise but even then, i $1 billion. reported recently they face a lot of executive turnaround only several months ago and there is still a lot to be worked on there. unclear of jia's fortunes will be much better moving his time over to faraday futures. caroline: i want to bring the focus in on electric cars because we have had a lot of it in europe this week to read we've had volvo think it is going all-in in terms of electric vehicles. how are you seeing opportunities? is this a hot area in terms of mobility? frederic: definitely, it is a question for startups.
these are technologies that require enormous amounts of capital. so, we are very cautious with our more limited funds. we're ambitious for what we do. but we can definitely see the trend where people are very conscious about the, what we're doing to the earth and they want to have a better life and they also want to make earth a better place, which means they will start to reduce consumption of oil and looking at alternative technology. that is a big trend as an investor. that is not where we are playing but we are very bullish on that trend. caroline: interesting tie-in is that, of course, volvo is backed by a chinese company. it seems as though china is taking green energy seriously. you have done a great number of stories on an amazing amount of funding going into very clean energy, into biking. selina: there was a whopping $700 million raised for a three-year-old bike sharing startup in china backed by
alibaba. and it's waging a war that is unleashing a significant amount of cash to win market share in this new market. its rival is called mo-bike backed by tencent. they are almost raising this proxy war for alibaba and tencent, for who can get the most users. this is not actually bike sharing, it is more like rental but the user does not even have to take ownership of making sure they return the bike. they can just leave it where ever they want on the street. there are significant risk for this model, but the cash spending is not going to stop anytime soon. caroline: $700 million blows my mind, for a bike. how many countries are they looking on entering? they claim on the website they are already in the united kingdom. i have not seen many. why are they needing quite so much cash? selina: it is not like the uber or didi model.
not only do they have to have the back end system in tracking and allowing people to unlock it with smartphones. the also have to produce these bikes. they have inventory risk. it is very expensive. thievesso very prone to and people that just throw it on the sides of the streets. there is actually been lots of clogs with these bikes being strewn everywhere. it is quite expensive. over the targeting expansion, 20 countries with 20 million bikes. and they say they only have 6.5 million bikes. this is significant global expansion, and they really are neck and neck with their competitor. caroline: i mean, i know this is not your typical area of investment, but you are in the lifestyle area and in clean and healthier living. when you look at the opportunities in mobility, is bikes an interesting ones? we see electric bikes and car sharing? frederic: there is a big trend that is very interesting, that people have a very different
relationship to ownership. you no longer need to own your car or your bike. and you can just share with other people. especially when you look at younger people who have more constraints financially, more constraints on the space at home. they are very much focused on experiences as opposed to owning something. so, i think that is the sense of history, and i'm bullish on the possibility with bike sharing. we need to look at the details of the opportunity -- but i can very much see a company like this become global, and just transform the way people live in all over the world and look in london. we have got shared bikes. this is what people are using every day. caroline: thank you very much, indeed. it was a great discussion. brilliant reporting. frederic court of felix capital is sticking with us. coming up, social networks vying for the rights for the world cup. what is at risk for traditional media companies? we'll discuss.
and snap are seeking online rights to video highlights from next year's world cup. that is according to two people familiar with matter. the companies have offered 21st century fox tens of millions of dollars. the event is an attractive target to social media companies. they are eager to exhibit more premium video and attract advertisers. but there is a risk that media companies will have too many sponsors. still with me is frederic court. this is a fascinating trend, of course, but we are seeing it more and more -- amazon getting in with the nfl and facebook already doing a deal with european championships when it comes to football, or soccer as they call it in the u.s. they just seem to have limitless
amounts of cash. frederic: they have a few things. they have a lot of money but they also have amazing audiences. for different kinds of age groups. my daughter, two of them, one of them is glued to snapchat. we are using, my wife and i, facebook and instagram. they have got our attention. they have got plenty of money. so, why not compete -- and offer that content exclusively to their audience. caroline: will the media giants, the likes of 21st century fox, allow themselves -- they might be getting lots of money off of social media but it is also -- frederic: i think going forward, they will go directly to the right owners and they can compete directly with them. so, we will see when that happens, but i can very much see this coming. facebook, in particular, but also amazon or even apple could spend very significant amounts
of money or even take netflix to go directly to the owners. it's part of the transmission of the world. those companies have the audience and technology platforms to get content for the people in a very efficient way. i watched your program yesterday on twitter, it worked very well. caroline: what about the likes of, who ends up owning an ecosystem? we've got also mobile carriers. vodafone and the like in europe, trying to get in and make sure they own the contents. we're glued to our mobiles. are we watching it on social media that we happen to access via our phones? who ends up fighting for this pie? frederic: what really matters is content. people love football, as an example, or soccer. people love that. they have a passion for it. they do not really care where they watch it. they want the content. we have seen price escalation. i've seen what happened in france where -- they lost the
rights versus fsr, which is a mobile player. but now they got the content. guess what? people go where the content is. caroline: the winner here is the sports company. frederic: whoever owns the media. it is all about products. eventually, media is all about the content. and that is why we've seen the likes of netflix or amazon start producing their own content, which is not something you can do so easily in sports. right now, we start to see this with technology companies investing in e-sport, to create their own leagues. caroline: it'll be fascinating as this continues to evolve. it has been wonderful having you here. frederic court, announcing the new fund. he has been my guest post for the hour here in london. that does it for this edition of "bloomberg technology." a reminder that monday begins our focus on tech week, showcasing the breadth, the depth of bloomberg's expertise in taking advantage of our multiplatform global reach.
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