tv Best of Bloomberg Technology Bloomberg October 21, 2017 6:00am-7:00am EDT
♪ emily: i am emily chang. this is "best of bloomberg younology" where we bring the best of this week's interviews on tech. i will have an exclusive interview with arianna huffington from the conference in laguna beach, california. plus, we will sit down with toebook's head of messaging find out how he plans to make it the default messaging app. after a summer of disappointment
at the box office, disney double down on fantasy. lead, this week we brought you bloomberg technology from the conference in laguna beach where we had conversations with some of the biggest names in tech. let's start with my interview with arianna huffington. we spoke about the changing role of travis kalanick. >> he is on the board, and he is very active. he obviously built uber into the juggernaut it is now. he passed the baton. it was a very nice transition of power. the new ceo has been amazing.
he has been handling all the problems whether it is what is happening in london with the suspension of uber's license to the deal and process with process withn softbank, he has been a great leader. he has shown he is very committed to building a thriving culture and company. emily: you mentioned the difficulties faced in london, elsewhere,gal probes how do you see the life-changing around the world going forward? better at to do serving the communities where uber exists around the world. we need to make sure we add value to communities. terms ofue in
transportation and jobs. days of change80 people toh allowing rebuild their relationship with drivers. emily: would you say the fractious miss that we saw -- fractiousness of the board from the outside is now changing? >> the board is changing. the new measures that are going to be put in place include additional, independent board members and chair. all of these things are really going to make sure that uber has governance before going ipo in 2019. emily: we understand that uber
has been a close confidant for travis kalanick. what is your relationship with him? x he is a friend. he is only -- friend. a he is only 41 years old, and we are excited to watch his journey and see what he is going to do. seen the have recently harvey weinstein scandal come out and how men can avoid can use -- how men positions of power to harass. what is your reaction? >> we see two issues here. there is this cult in silicon valley and hollywood where, if you are delivering results or
great performance, then a lot is for given. the other issue is for us to break the silence. people see things but they do not say anything, especially if whoever is involved is someone powerful in an organization. you also see that in politics also. i would love to see more republicans talking out about what is happening at the white house. .o, breaking the silence ideally before it has to come to that point where you have women coming forward finally to speak out themselves. what are your biggest concerns now that we are nine months into this current administration? >> my biggest concern is that so few republicans are speaking out. it was great to see senator mccain last night speaking out and now senator corker speaking
out. this is not a partisan issue. it clearly involves the safety of the country. need republicans. they have a lot more impact if they speak out about what is happening. ,mily: facebook, twitter google, they are now having to answer the congress for russian meddling on their platforms. what is the responsibility of these companies when it comes to foreign actors weaponize and the tools they create -- actors w eaponizing the tools they create? >> they do need additional oversight. newbook is investing in employees and machine learning to catch these foreign actors.
no one wants to see fake accounts being started. there is another problem which is what we are trying to address globally. have of these companies incentives to hijack more and more of our attention. we see that being a problem when it comes to teenagers and college students. we see it in the newspapers, the mental health problems increasing in teenagers dramatically. you are in a partnership with samsung to turn a smart phone into a dumb phone. what do you mean by that? >> when you do not want to be interrupted like when you are with family or sleeping, then you can put your phone into mode."ing called "slide
during that time, you will not be able to receive calls, texts, notifications, but you can specify if you want to receive calls from a specific child or person. diis one director -- one rectional. e,"you put it into "drive mod it will tell you when you are supposed to be out of it. it will also alert you to win you are spending a lot of time on apps. for example, it will let you know if you have been on instagram for nine hours and ask if you want to change that. emily: what is the next that? >> it is our work with corporations. where we work to improve culture
and outcomes when it comes to productivity and well-being. we are also a media platform which increases awareness around these issues. also, new models. there are a lot of people who are practicing and taking care of themselves and recharging. i have seen the impact this has on their productivity and performance. emily: that was arianna huffington. have more we will from laguna beach including our conversation with facebook vp of messaging products. facebookans for messaging to become the default messaging app. that is next. this is bloomberg. ♪
♪ , bloomberg week learned that facebook is looking to hire individuals with security clearance. they want to eliminate the possibility of foreign actors of using facebook for social media campaigns before elections. facebook declined to comment on this story just sticking with facebook and one of the tech leaders in attendance at the the good of each conference was the prof facebook's messaging ducts. he was recruited personally by mark zuckerberg. i asked marcus how much revenue the company is driving into advertising. >> we do not break out revenues for specific- products, but i can still say it is very early in the developed for messaging as a business or facebook could the early signs
-- for facebook. the early signs are promising. if you redirect people from either a facebook ad, instagram ad, youmessenger redirect them to a conversation inside messenger, then that is a great roi opportunity. it gives businesses more opportunity to create conversations with customers and generate more revenues. i have cons of examples for you, but a good one to share for instance is that t-mobile is now sharing it is that -- data plans and devices on messenger, and they are seeing an increase in comparison to traditional web shopping, because they are able to re-create the the experience would have inside a store with ui elements inside messenger.
emily: the competition in the chat space is heating up. how do you see messenger standing out amidst the competition? is a very different geographical split between different types of messaging apps. ist we see is that whatsapp very strong in certain markets like latin america or india. we are very strong in north america and western and central europe. thatnk one differentiation messenger has are groups. when you create a group, you are seeing identities and not just numbers. you can send media very quickly. when you add a device, it works flawlessly.
great chatl of these extensions from creating a playlist with friends to playing games or making plans. you can do all of the things much better on messenger, and it is a key differentiator for us. we will continue to invest in groups and in real time. you can upgrade from texting to live video in groups. it is a very delightful experience with augmented reality. so, we are going to continue to invest in it. emily: you have new features spotify,ation, polling, the ability to buy movie tickets from fandango or share recipes from the food network. how do you see the trends continuing? >> those types of experiences,
once you have them, you tend to stick with messenger and create more conversations on messenger. when people actually get what they want, when we can infer intent from a conversation and then leverage them to suggest the right thing at the right time, what we see are that people are having a better experience and sticking around on messenger to create more groups and more conversations. technology, some people are saying that facebook seems to be a little behind when it comes to the home ai game. to do think that facebook and facebook messenger have some catching up to do? >> i think we are having a very different approach here. the current experience you have is that they suggest things that you want to do based off of conversation, and it is really
popping up at the right time. to results tend not disappoint when you have an intent you want to complete. we only surface suggestions when we feel confident that this is what you want to do. the model we have been working on right now is the model we have been talking about with suggestions in conversations, and we are continuing to invest in bringing a more full-fledged assistant to market. we have been really working on it for a while. somethingwant to ship that is valuable and will not let people down. we do not want to rush to market. we will get it right, and then once we get it right, we will ship it to the 1.3 billion people on messenger and counting. emily: facebook along with google and twitter will speak before the house intelligence committee about russian meddling on the platforms. what responsibility does they spoke bear here?
what mistakes do you think were made? >> one thing i want to say windows things come up -- to say up, weose things come have spoken about the responsibility of the platforms, but i want to highlight one thing. we talk about the downsides of the platforms but not the upsides. this is something i feel very passionate about. the number of people who connect with other people around the are able to connect with them in ways that they cannot connect with friends or family, the fact that we had turned on safety alerts and we have the ability to reassure people that everything is ok, the fact that we were able to raise millions of dollars for harvey on the platform, these are things we do not talk about. there is so much goodness on the platforms. scale, operate at this
the are things that happened that should never happen on the platform, but we do have a plan on how we will go about it. we are hiring more and more people, and we are collaborating with special counsel in congress on these investigations, but we are taking this very seriously. we have a clear plan that was outlined recently, and we are going to go after it very aggressively. these platforms can be used for good, but they can just as easily be used for bad. when it comes to advertising, we are seeing blind spots in how facebook develop its advertising system. things that facebook has apologized for, but as you continue to build out advertising capabilities in messenger, are you looking for ways that your platform can be abused and are you taking steps to prevent it?
>> we can definitely be better at this. all of these things that are currently being raised are things that have made us realize that, as we roll new things out, we need to continue to be more thoughtful and try to over think how the platform can be used in ways that it was not designed for. going forward, that is definitely what we are going to do. we tend to learn very quickly and fix things very quickly. i have no doubt we will do it again this time. ofly: that was facebook vp messaging products. they might see a payoff from ridesharing investments. this is bloomberg. ♪
♪ emily: automation in the drivers seat. in gm over the past year. deutsche bank expects a big push coming for gm self driving cars. >> we actually think one of the big advantages we have today is that we have everything integrated under one roof. we have the advanced software engineering, the vehicle manufacturing piece, the vehicle engineering, and what is allowing us to move so quickly is that we have all of that capability under one roof. that gives us that real speed advantage. emily: so you are saying that automation is not a choice now? >> we are moving as fast as we can to get to commercial deployment of this technology. we believe the best way to do
that is to have capability under one roof. emily: investors are starting to realize gm's ability to diversify. whether it be through ridesharing, self driving cars, some of these things are still out in the future. how does it all come together for you? mobilityou think about and autumn the taste -- and automation, we believe there will eventually be automation in all vehicles along with electricity. having all of these abilities under one roof it's us a real advantage on how fast we can move and get this technology deployed commercially. emily: how do you leverage what you have learned? >> we have a very productive investment relationship with lyft which gives us a perspective into the ridesharing business. we still think it is in the
early stages of shared mobility. we are just at the beginning, and there is much more to come. emily: uber has had some struggles the past few months. do you see some opportunities there? opportunities to take advantage of a weakness? >> we see ridesharing over all as at the intersection of autonomous. ridesharing today accounts for 1/10 of 1%. we still have about 99% of the opportunity, so it is still very early days. we think the autonomous technology we will bring to fruition is the key to unlocking a lot of next opportunities. emily: why have you not bought lyft outright? >> we have a lot of possibilities when it comes to going to market. we could go to market in different partnerships. all options are open at this time. --ly: at one point do you
now that you have learned all this, do you make a decision to move forward? comes more clarity that as technology gets closer to commercial deployment, then the commercial -- then the more clarity we will have when it comes to this decision. matters is to get the vehicle profitable. we do believe in an all electric future at general motors, and we believe that, in order for that to come to fruition overtime, we need to get it down to a better price compared to internal combustion engine cars. we, as a company, have the capability to solve that problem. we do still have a little more work and time -- work to go. gm is moving faster than i think a lot of people expected. when you say self driving cars will be on the roads in a few
years, what you mean by a few years? i really cannot get more specific than that at this point in time. all i can say is that things are moving very quickly. we think we have a good approach when it comes to integrated technology which allows us to move at a good speed. we feel we have an obligation to move this technology to commercial appointed as soon as possible because of the impact it could have on improving road safety. ently: that was gm's presid dan ammann. up, more from the laguna beach conference. bob iger is confident that disney's portfolio of super hero films will pack a punch in the coming months. this is bloomberg. ♪
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emily: welcome back to the best of bloomberg technology. the name of the game at cisco the last few years has been transition on legacy hardware to software and services. the push has been led by the ceo chuck robbins. i caught up with him at the wsj conference in laguna beach and asked about cisco's role in building the city of tomorrow. what we see happening around the world whether it's a company, a city, a country, technology is at the heart of every strategy. cities are no different. whether it's meeting the objectives cities have around revenue generation or solving some of the problems they have like lightingr
costs, etc., all of those can be solved or achieved through the use of technology. a quick example, 20% of the lighting costs in the world are 20% of the energy costs that come from lighting. by connecting these lights and controlling them more effectively, you can reduce that in the sits -- in the cities by 50%-70 5%. the network is at the heart of making that happen. emily: how do you turn that into big business? at -- in 120rating cities around the world right now. we also have digitization agreements with 16 countries around the world where we are helping them with education and health care. all of it continues to contribute to the transition you talk about as you open the show, around moving to more software with software platforms in addition to the network. we have innovation going on across all of these areas in
helping the cities achieve their objectives. with these road businesses but we think it's going to be a great business for a long time. emily: you have said cisco will not stick its neck in the sand and ignore the changing industry. how would you rate your progress so far in making that transition? >> i never think we are going fast enough but i don't think any ceo does. aen we started this, we had couple of big objectives we want to drive in one was the transition to software. in eight quarters, our deferred software revenue on her balance sheet doubled from 2.5 billion billion. that's significant and we have over $10 billion software business today. we wanted to also move toward more recurring revenue as a percentage of our business and less quarter we exited at 31% which was up four points from the prior year. that's a big move for big business. our product revenue, we had over $1 billion of that coming from
recurring revenue which was up 40% year-over-year is the first time it had over been over one billion in one quarter which represented 11% of the product revenue. we may progress there and we of massive innovation we have been working on in the core franchises. see softwareill and services revenue become the driving force of growth? now, atu look right where we are headed, i think they are going to be the drivers of growth over the next few years particularly if you look at the launch we did the summer. what are the things we wanted to do was re-energize our core franchises and bring a software model to our core franchises. we did that this summer. we launched the very early phases of what we call intuitive networking which is intent-based networking which is a category. it allows you to take the priorities of your business and drive them through to how you run your infrastructure as well as drive context out of the infrastructure through analytics. we have rewritten all of our
software, we got analyst capability coming out of every aspect of our technology and we launched a subtraction business on top of our core switching platforms which people did not think we could do and we are having a good uptick on that. emily: you have been aggressive on m&a are you open to more acquisitions? >> we are open to any acquisition that aligns to where we want to go. innovation,k about we spend a lot of money on and wanted to refocus that on our core which we have done. i think we bought somewhere between 15-20 company's i became ceo. we're also driving a lot of deep strategic partnerships like what nd did with apple and inspur a rockwell and more partnerships will come from us. one interesting aspect we have begun to implement is co- development with our customers in an iterative way.
emily: john chambers, who was the ceo for many decades before you, will be stepping down from the board at the end of this year. many of the executives that he hired have also left the company. what does that kind of sea mean? what does it signify? >> this was part of his plan. he's got so many things he's off doing now. is into startups and wants to help drive the start of capacity in the united states. i think he will do great things. if you look at the leadership team we put in place, we really that we had ensure the leadership team that bought into the vision of where we wanted to take the company and i think we have that emily: today and we are executing really well. emily:the supreme court just decided to hear the microsoft case against the doj over whether companies can be forced to hand over information on their customers stored on servers outside the united
states. what are your biggest concerns? i don't worry so much about a precedent. these are policy issues. -- we do support microsoft in this case. countries that the need to define what the policies are. in fact, in this case, we believe countries that are involved actually need to figure out what are the cross-border data, privacy issues and how will we deal with them. the technology can be deployed aligns with the policy but we have always just view this as a policy issue that the governments need to decide. emily: the tech industry has made some effort to bridge the gap with washington. in silicon valley, that is largely anti-trump. have you seen the efforts to engage what the administration
actually pays off? >> if you look at the priorities of coming out of washington from a business perspective, we remain very active in congress and on tax reform and remain active on discussions around high skilled immigration come all the things that matter. there is tremendous progress. if you look at what's happened with the early framework for tax reform and what we see happen this week, i think they are making progress. emily: you see? >> i am happy with the business imperatives they are trying emily: to do in washington, absolutely. what are you unhappy with? >> my 16-year-old's latest grades. there is a lot of things. in washington, you just have to -- it's always a dynamic place. there is obviously lots of politics and in my view more discretion about things that divide us than things that unify us. again, with the approach that was taken on trying to get this
process for corporate tax reform done, it was done across the house, across the senate as well as the executive branch. i think that is promising so we are hopeful. emily: that was the cisco ceo chuck robbins. every blockbuster -- a blockbuster third quarter for netflix and beat on revenue. it added 6.3 million subscribers , nearly 4.5 million overseas surpassing expected subscriber growth. sign forncouraging investors since they just announced their first price hike since 2015. amazon announced it will sever ties with harvey weinstein's former production company. pointing was fired after a litany of sexual harassment allegations against him. amazon had ordered two seasons of a high profile project produced by the embattled production company starring robert de niro and julianne moore. that show will no longer be made. in further developments, roy price resigned as the head of amazon's movie and tv studio
after allegations of sexual harassment. amazon studios chief operating officer robert chang law oversee the studio while amazon searches for a report -- a replacement. had an estimated budget of $4.5 billion in 2017. after the worst summer box office for hollywood in a decade, bob iger has high hopes for his companies fall releases. that includes the new film. why is he confident of a box office turnaround? we talked about the importance of this film. it's important and not just to disney but the whole industry. we have been developing the past few months about the big hollywood disappointment. the industry is down about 5% this year. it looks like things could turn around a bit and the last quarter in large part due to disney as the new thor looks
good and a new pixar movie and star wars in december and i could get more people into theaters. emily: what are box office projections here? >> thor looks like it will open 105 million and do $270 million domestically. it will make it one of the top 10 movies of the year. the other two movies will both be over $200 million. rogue one did over $1 billion. everyone expects the latest star wars sequel to do more than that. if these sequels and revivals have not been doing well, why do they keep making them? >> because when they do do well, they make a lot of money. aboutd bob iger keeping these fresh. he says it's a lot of work and new stories, new places for the heroes to go, new characters. it's acase of thor, funny movie so there was kind of
a change in tone from the past. there is more humor in this which people teams -- seem to respond to. emily: we do have a chart theaters -- movie you can see how they have tumbled over the last year. in terms of keeping things fresh, one of the things that's interesting is the marvel comics print edition, they have try to increase diversity. thor is now a woman and ironman is a black woman. when will see that kind of diversity translate onto's the screen. >> you are starting to see it. there are definitely new .haracters you will see black panther as well as cate blanchett. there is also an african-american director for next year. diversity is a big issue in hollywood of all kinds. you will start to see it reflect more in the product as well. emily: what would a hit mean for
the film business? now, we are just trying to get back even for the year. last year was a record year. to welles the movies and another warner bros. film, justice league, is coming out and we could get back to breakeven and that will at least take away this feeling that people are not going to movies anymore. up, the founder of paypal ending rotatory lending. -- ending predatory lending. soare streaming on twitter check us out at 5:00 p.m. in new york and 2:00 p.m. in san francisco. this is bloomberg.
crowds. they can use remote control devices from insurance inspections to cover news. the approval of the first time the was government agency has granted a waiver for unlimited flights over people. read is exempt is allowed flights of drones over people in closed set operations and only when tethered with a maximum height of 21 feet. this week, top business and tech leaders gathered at the wall street journal conference in laguna beach, california. among them, max levchin. he cofounded paypal. in mike's was of interview with him, asked about the trends he sees in the lending arena now. >> think we are just about ready to enter the consolidation fees of this new market were companies good at managing risk and smart about underwriting, smart and reserving our set up for long-term success and will start picking up. the stragglers or the ones you don't have the r management teams are not ready to take on the risk management demands in the regulatory demands. emily: what do you see happening
when it comes to predatory lending? promise, thee to do inhave come here one way is to get rid of predatory lending. it's to shine a spotlight of what is the right and wrong way of doing this to bring more credit to those who are excluded, pushed out by the players into the darker reaches of pawnshops. i think the opportunity is still there. we're all working on it very hard. i would say the dent has been made by the industry is fairly small. we are doing our part and then some but there is a lot of people who have no access to credit. emily: talk to us about the newest developments at a firm and how you guys are trying to combat some of these trends? the firm has been scaling very five or six years and's we have been around. we are focused on this idea of
being able to deliver a loan product to the consumer that uniquely tailored to the purchase they are trying to make with very transparent pricing, something we can commit to that will not change there will be no hidden fees or interest rate changes or any other plagues that hurt consumers and would give the industry a bad name. we have just been working on and havea long time picked up some happy customers. we have been hovering well north of 80. traditional banks have a negative nps score so i am proud of that. what of big things we have been able to show with real data is excess,open our credit we approved more than 30% knew financialn usual institutions a we are actively bringing in credit access to audiences that are traditionally excluded.
i think that is the best way of doing it, create responsible people and led many to those who can't afford to borrow it but provide guidance and guardrails to not overextend people and put them into more debt. emily: the equifax attack is the spotlight with hundreds of millions of people having their private information stolen. you are just asked on stage if it should exist. you said credit bureaus should exist but how do we avoid risks like this? think it's the reality that many traditional players have not yet come to full terms with. security is no longer optional. it used to be the joke in the cartography and insurance is only something you want to buy after your house burns down. the only thing is to sound a loud enough alarm that teaches everyone in the industry to do
yourself and your customers a favor and encrypt your data and have real security practices. we should spend a lot of our time pointing out how easy it is to fix that problem. we do not have to have that. emily: i'm curious what your thoughts are on bitcoin. jamie dimon says it's a fraud. how do you think about that coin -- about bitcoin? >> i think it's a developing story in the sense that from a skeptical perspective, it's a hammer looking for nails. theyone -- every time hitch a new cryptocurrency company, nine out of 10 times, it's unnecessary to bring it in. adding said that, the promise of the currency and the ledger of the idea of inexpensively creating fully distributed verifiable trust is really powerful. we will converge on
concept and companies and fundamental improvements to our society through the usage. i'm just not sure what they are yet. emily: mike schools of interview with a firm ceo and paypal cofounder max levchin. ising up, pinterest inventing a new way for small and medium-size businesses to reach the masses. we will catch up with the president next. check us out on the radio or bloomberg.com or on the radio on sirius xm. this is bloomberg.
-- particular products. the ceo joined us to refine the new move. pinterest to plan. since they are planning, it's an awesome time for businesses to connect with the consumer while they're in the early part of the buying process. what we are announcing today is the ability for small businesses to reach people on pinterest while they are searching. emily: when they are searching, there some sort of intent. you worked at facebook for many years, do you think the pinterest ads will be more effective at getting people to buy stuff than your typical facebook ad? >> we see what people search on pinterest. they know what they want, they couchoking for a l-shaped or a bedside table but they don't know what brand they want to buy it from. that's a unique point for an appetizer to get in front of that consumer. they know what they want but they don't know who they wanted from. smallsinesses, especially businesses who have to acquire new customers to grow and have
to find people to buy their product to never heard of them, it's an awesome time to get in front of them. if you are searching for a couch now baby stroller, we can let a small business and sells those products get in front of new people. emily: how much could this boost the pinterest revenue question the small and medium-size businesses are fastest-growing segment and some people do a trick of small numbers. in this case it's a big number and its growing the fastest. i think pinterest, because we and beautyin home and style and food, these are categories were small businesses thrive. there are lots of new an entrants and because pinterest is strong, it's a natural place for businesses to be. emily: what can you tell us about trends in advertising revenue at large? direction, thect
trajectory is great and we are pleased with it. emily: one of the weaknesses with self-service advertising is the potential for abuse. we saw this with the russian meddling on facebook, trying to swing the election. how do you make sure this kind of thing does not happen on pinterest? and terms of our ad review, every single at on pinterest has been reviewed by a human. every single one. emily: can you keep that up as you scale? >> i believe we can. the second thing we do is we use technology to look for fraudulent ads and then we have e humanval to check that technology and continue to provide constant feedback on that technology so it keeps getting better and learns. emily: there was a report in the washington post that russian content ended up on pinterest. a policy responded to this and you are looking into it and it appears it came from facebook. what more can you tell us about
what happened there and what measures you are taking? been acrossnt has the internet and our pinterest saw the content i. it is convincing content and it doesn't look fake. we saw it and we removed it. emily: what is the responsibility in general of these platforms? when we see that content, we have an obligation to remove it. we are trying to stay in line with that principle. toly: when it comes advertising in general, pinterest is on the list of the potential companies who could go out of the gate and hit the public market. does this bring you closer to an ipo? have any plans for an ipo. we super focused on making the product better for our users and growing the business. emily: what can you tell us about them a graphic trends among users? women use pinterest mostly, is that true question mark >?
are growing. 40% of sign up today are men. it's significant. emily: where do you see this going? you are in charge of building the business beyond these new ad features. discovery to do for what google did for search. that would be a huge opportunity. if we are the service and never once phone that they used to discover what they want to eat, what they want to wear, where they want to live, where they want to travel, it's a gigantic business. it's also a gigantic service for everyone to use and improve their lives. emily: that was the pinterest president tim kendall. for this edition of "bloomberg technology, the best technology." tune in each day at 5:00 p.m. in new york and 2:00 p.m. in san
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