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tv   Bloomberg Business Week  Bloomberg  March 17, 2019 4:00pm-5:00pm EDT

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carol: welcome to "bloomberg businessweek." i'm carol massar. we are inside the magazine's headquarters in new york. in this week's issue, what feels like facebook's never-ending crisis, one year since the cambridge analytica scandal. and was elon musk really, really fixated on destroying a whistleblower at tesla's gigafactory? we will tell you about the allegations and how the company is responding. first up, our global cover story for "bloomberg businessweek" subscribers.
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boeing 737 max 8 nightmare. two catastrophic crashes. 346 people killed and flyers across the globe taking to social media to express their fears about the plane's safety. editor jim ellis is with us. so jim, boeing, no doubt about it, our big company story this week, the big stock story this week and the ending still yet to be determined. big story. jim: boeing -- this is a company that was doing everything right. ever since -- they had a new ceo for years ago, dennis muilenburg, and he had managed to basically ride up the value of boeing to unseen levels. revenues were clicking away. $100 billion a year. this was a company that not only were they doing everything right, but one of their main competitors, airbus, was in all sorts of trouble. this big bribery scandal that was holding a lot back, and management changes. and the a-380, that big superjumbo which had to be shut
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down. everyone said boeing is doing great. and they have this wonderful plane called the 737 max which is an -- excuse me, the 737 which started back in the 1960's. carol: it has been around for a while. jim: it has been around forever, but they have been able to continually upgrade it. and the latest upgrade was the kind of plane people want nowadays. it is much more fuel efficient. it is 14% more fuel efficient than previous generations. and that is what is the hot thing for new carriers, for low-cost carriers, and for established carriers that want to compete with low-cost carriers. so everybody wanted one. what they ended up doing is they have an order book of 5000 of these. that is a huge amount. carol: did i hear something like $600 billion of orders are now at risk? jim: $600 billion of orders are at risk now, because, as people say, if this plane is not guaranteed to be safe, and a lot of purchasers are saying they want to rethink. some are even saying now i want to cancel my order. carol: it is an interesting
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story, and a bit of a controversial one, as so many countries led by china around the world, the european region, ultimately canada were grounding the plane before the faa finally in the u.s. said we have to ground this plane. jim: that is a much different situation than we normally have. most times, people wait on the faa and sometimes the eu to decide what safety issues should be acted upon. in this case, the day after the crash, china jumped up and said no, we're not going to have our airlines fly the 737 max anymore. right now, they account for about a third of all the max's that have been delivered. carol: each week we do so many company stories here, deep dives, and i do think about companies that have been in trouble before. bp, exxon with the oil spill. i think about the corporate reputation for boeing and the future of the company and they did not maybe get out ahead of this before other countries did. jim: yeah, they completely lost
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control of the narrative here. instead of talking about the software fix that they supposedly have for what people think might be -- carol: almost being defensive to some extent. jim: yeah. they sort of said hey, there is nothing wrong with this. as one country after another not only said the airlines could not fly the plane, but they closed their airspace to the plane. and you can see where this was headed but boeing was last to see it. and finally, after having the faa say there was no problem and after the president giving mixed signals, finally on wednesday, the president said enough, we're going to ground the plane. carol: right. the media all reported on how the president had a conversation with the ceo of boeing and it took some time before we got that grounding. jim: that is one of the issues for some of these international carriers, they are wondering whether the company was so close to the government and the u.s. that that might be a reason they
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were slow to ground the plane. carol: it may be a reason why we have not gotten the black box back to the u.s. and that was a little bit of a hot potato. right? germany said we do not want the black box and it ended up in france. jim: yeah, normally what happens is people are very happy to send the black box back to the u.s., which has a lot of experience handling the forensic looking at a crash. in this case, the ethiopians were saying we don't know. we think it ought to go to europe. that was sort of a slap, because that sort of suggests they worried there would not be, let's just say, as truthful -- carol: regulators too in bed with the company? jim: a little too close. carol: and there is one less thing i want to get to, and this is how the magazine was really smart and covering it. social media really played a role. consumers saying i want to know what plane i am flying. and pushing back. jim: there was a lot more than we typically get. part of it is because this plane is such a workhorse. it is on order by so many carriers around the world. what happens then is that social media posts were out there and it sort of fed on itself. we ended up with newspapers
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outside the u.s. that were jumping. a couple of british tabloids called this the death plane. carol: so we just heard from jim ellis on the boeing story. jason kelly joining us now. we talked about boeing so much and understandably so this week. jason: we wanted to get inside what actually happened, what the market reaction was. so here's a snapshot of the days following that 737 incident and what happened after country after country, regulator after regulator grounded those planes. carol: we are talking about approximately in the first three days, about $40 billion erased from boeing's market cap. investors did not hesitate. they weighed in right away. jason: let's also point out that the stock had been trending up very nicely. dennis muilenburg doing a very good job. you can see why investors got very worried and that steep decline over just several days. carol: yeah, definitely a big deal.
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jason: up next, an outbreak of banking scandals raises a big question as to why the eu is not policing itself so well. carol: plus, why venezuela needs its oil workers back, and they need them fast. jason: also ahead, march madness. betting makes its legal debut this year. we will tell you about one company at the center of the action. carol: this is "bloomberg businessweek." ♪
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carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. join carol and me for "bloomberg businessweek" every day on the radio, from 2:00 to 5:00 p.m. wall street time. also, catch up on our daily show by listening. subscribe to our podcast on itunes, soundcloud, and bloomberg.com. carol: and you can find us on businessweek.com and our mobile app. jason: over in the finance section, dirty money scandals seem to be pouring out of europe. carol: they do indeed, including some nordic banks that appeared to have been caught handling suspicious russian money.
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jason: but potentially funny russian money in the eu's financial system operated something like an open secret, almost tolerated until recent reports. carol: reporter alan katz has the story from paris. alan: there are two things really. one of them, surprisingly, was the russian attack on sergei skripal, a former russian agent living in the u.k. the reason it made a difference was that for the first time in a long time, europeans thought that russian actions might actually be harmful to them. this has nothing to do with money laundering. it was a russian attack on a former agent, but it was with a chemical agent that made him and his daughter violently ill and sent them to the hospital. killed a woman whose boyfriend had accidentally found a perfume bottle that contained this agent. and it really personalized russian actions, and so it made people in europe warier of
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russia and its intentions toward them than they had been before. the u.s. has a long history of viewing russia as its enemy, so americans tend to think more naturally that maybe russians have bad intentions towards americans. europeans do not always feel the same way. and the skripal attack made the difference. the other thing that changed was the danske bank money laundering affair, particularly in 2019, when danske reported the full scope of that. which is around $230 billion that they moved through this tiny unit they had in estonia, itself a tiny country that used to be a soviet state. the size of that shocked a lot of europeans, particularly a lot of scandinavians, who viewed their region as very clean, very not corrupt. and the rest of the world views scandinavia the same way. i think that that much money moved through a danish bank was really surprising to a lot of people, and really caught their attention. jason: because then it goes to swedbank and then to nordia --
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so you sort of have this domino effect of sorts and people really looking much more deeply at the activities of some very well-known, and as you say, well regarded european banks. alan: that is exactly right. to step back for a minute, the russian money was going through the baltics, which is lithuania, latvia and estonia. these are former soviet states. most of them have big russian speaking populations. there is a lot of cultural connections with them. the scandinavian banks, the ones from finland, sweden and denmark came in and bought a lot of these baltic banks. so they sort of bought their way in to these former soviet states. when they bought them, they got the same issues the banks had in terms of moving russian money, and they did not appear to do much about it. i mean, danske bought a bank called sampo back in 2007, and for years let russian money roll through in an ever greater amount. yes, they bought into this issue, but they had plenty of
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time to do something about it and chose not to. so it really was a cascade effect. and again, danske appears to be the biggest hub of this. but nordia and swedbank and who knows if there are others to come, also might have been involved with it, because all the money slushed through the baltic units of these scandinavian banks were linking to each other. carol: what is interesting -- and take a step back and look at the history of the last 15 or 20 years, everybody seemed like they were ok with so much russian money in particular, whether it was flowing through the u.k., going through switzerland, cyprus. what is interesting is we talk about how it fueled real estate in new york, london. it bought what, the chelsea football club? everybody seemed to be ok, but with the skripal incident and the poisoning, all of a sudden it became a security issue. everybody realized, wait, this is a different type of threat and concern. alan: it did, and you're absolutely right about that.
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it really personalized it for a lot of people. don't forget, the first point when russians and russian money became less wanted was after russia invaded crimea in 2014. and the u.s. and the european union imposed sanctions on a series of russian individuals and russian companies, and to a lesser extent, on russian banks and companies. so that was the first point when russian money, at least from a legal and political perspective, became more suspect. until then, everyone was happy to have russian money. and in fact, it was seen as more of an advantage to the west and a problem for russia, but not a problem for the west. starting in 2014, it started to be a problem. and again, more in the u.s. than europe. in europe, with skripal, it suddenly became, well, it is not just russian money that is the problem. russia might be acting in a way we don't really like. jason: to the economic section. a troubling side drama to the ongoing crisis in venezuela. carol: that's right, jason. the country's opposition leader has assembled a shadow team to revive the state-owned oil company should he be able to
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oust the maduro regime. jason: but recruiting workers with the necessary experience and knowledge may be impossible, or at least incredibly difficult. carol: more on this story from editor cristina lindblad. cristina: we are talking about a company that was at one point one of the best managed oil monopolies in the world. then in 2003, many thousands of its staff had participated in a protest and a work stoppage to force new elections to defeat chavez, hugo chavez. and as punishment, 18,000 people were fired. so there was a huge brain drain essentially and they scattered all over the world. you know, they went to saudi arabia, they went to canada, which has similar types of heavy crude that venezuela has. so that kind of know-how is very valuable. now, they are being -- people are reaching out to these folks
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saying, "would you come back? would you be ready to come back if there was a change in power?" jason: and before we get to that, i do want to go back to that initial launching them into the world, because what they found is they were in heavy demand, right? i mean other places really wanted them and they went. cristina: we don't have statistics on how many stayed in the industry, but we know that yes, their skills were in demand. also, immediately, about a year after these mass layoffs, there was a group called oil people that started this database to keep track of all of these folks. so that is this list they are managing. that is how they are reaching out. carol: and they went to some coveted places like the middle east, saudi aramco. cristina: right. saudi aramco. there are some in a chinese owned company that also has operations in canada.
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we found -- not everybody landed on their feet, i would say. because that was the first wave of the exodus, but it has been trickling on through the years. so it started with this kind of white-collar and it is now blue-collar. everyone who is -- rig operators, truck drivers, oil hands. so it's -- people's salaries cannot keep them alive. carol: you know better than most there are so many different battle fronts when it comes to venezuela right now, but if you are going to turn around the country, you have to turn around this company and you need the employees. they've got to figure out a way to bring back people. cristina: it is going to take money, but money alone would not do it. we talked to somebody who said if you manage to bring back a third of the staff -- as long as there were people there who were able to teach new people, that you could do it. there is still a big question mark. jason: up next, facebook celebrates an anniversary of sorts.
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that cambridge analytica scandal. carol: hard to believe it is already a year. plus, how wework is expanding its effort to trace movement in its offices. jason: this is "bloomberg businessweek." ♪ jason: welcome back to
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"bloomberg businessweek." i'm jason kelly. carol: and i'm carol massar. you can also listen to us on the radio on sirius xm channel 119 and on am 1130 in new york, 106.1 in boston, 99.1 fm in washington, d.c. -- jason: am 960 in the bay area and in london on dab digital and the bloomberg business app. carol: in the features section, is facebook doing enough to protect your data? we are talking about your personal information. jason: and does the company actually care about fallout from last year's cambridge analytica scandal like the company says it does? carol: and does it matter? jason: sarah frier took these questions to facebook. sarah: i want to bring us back
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to one year ago, almost today, when the news about cambridge analytica broke. the company for years had known about that problem too, but until the media wrote about it and until senators and congressmen started calling on facebook to do something, that is when they had to formulate a plan. and we have seen that pattern over and over in sri lanka with cambridge analytica. with the opioid crisis on instagram. this is a company that really starts to step it up and respond once there is public pressure to do so. and then, in that case, they will say -- one of zuckerberg's lines is "we now have a broader view of our responsibility." and this story is really about what that broader view entails, and if it is still a very reactionary posture that facebook is taking. carol: well, talk to us about the folks you talked to at facebook specifically.
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monica bickert, she's their head of global policy management. what does she say about facebook's ability to police its platform and about its willingness to police its platform? sarah: i found monika bickert very earnest in trying to solve this problem. i mean, there is only so much she can do with the resources she is given to deal with the content of 2.7 billion users across all of these platforms who are posting billions of things a day. she is trying to make it systemic. carol: so let me jump in for a second. do they have a point? i think about we are so critical of what goes on in china in terms of -- jason: censorship. carol: censorship, excuse me, of that going on there. what is the line that something like a facebook or any social media platform has to follow in order of letting people do their own thing without policing it too much? freedom of speech. sarah: that is the same debate
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they are having right now at facebook. how much can we really decide that we want our platform to not have this kind of content and how much is overreach? if we say that this information is likely to spark violence, should it be facebook that is saying that or should it be some outside groups who really have the expertise? in that case they decide it should not be facebook, that they should bring on outside groups. of course that makes responding to the content slower, but the trade-off is that you have a single company making all of these decisions. mark zuckerberg has said he thinks that it is not even sustainable from his point of view, that in the future he wants facebook to just not be in charge of this in the end game. and he's going to appoint this outside board of people from diverse disciplines. we really don't know that much about the board. we know there will be 40 people on it who make the final call on these decisions about content on facebook, who are not affiliated with the company.
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carol: speaking of using big data, that is the focus of the solution section. jason: from helping farmers improve yields to a new wave of investment in undersea cables. didn't not see that coming. carol: no, we did not. here's our editor, dimitra kessenides. dimitra: is it a surprise that a company like wework, which is controlling, let's say, managing so much office space in the world, in the country mostly today, that it is going to find a way to capture some data from that and sell it and make some use out of it? no, it is not surprising. but how are they doing and what direction are they moving with that? because it is not just they are leasing space and releasing it to people. there is some other kind of end game. carol: they are getting more proactive when it comes to data. dimitra: indeed, they are investing a lot. in the last year, they acquired two companies that are companies that provide them with a lot of data. one is a conference room booking software company. it makes software to book those rooms. in the process of you using that software to book those rooms -- it's called team, the company -- you are providing them with a lot of data.
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the times when most people are looking for conference room. how many people are they looking to fill that conference room with? how long are they spending in that conference room? maybe that is going to provide you with information you could use if wework analyzes it for you and sells it to you that lets you better manage and be much more efficient with your conference room. both the size of your space, how many of those rooms you have. what times of day you make it available. maybe you lease that out to somebody else. jason: you mentioned the idea of collecting data and selling it back to the user, which takes us to the farm. dimitra: farming. a couple of generations ago, one of the farmers we interviewed, his grandfather used to have in a shed on the property a stack of spiral notebooks and that is how he tracked. how much did i get out of these? how much was good and how much was bad? as best he could, he would use
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that information to try to perfect the next round of crops. today, companies like bayer and syngenta and so many other big seed -- they're in all these businesses. they are in health care, pharma, and seeds. they're developing software and programs and tools. and farmers of all sizes -- this is what is important about this -- it is super useful, both to the large-scale, mass farmers, but especially to small farmers. it could be a farm that is just several acres. the data is enabling them to do all kinds of things. to adjust based on weather patterns. to detect very early on using certain technology that are scanning, right? almost like facial recognition software. it is software that allows them to identify it and very early stages whether there is a possibility of a disease in a crop. so you are better controlling and estimating your yields. jason: and i did like the story to round it out about undersea cabling. here, you have what feels a little bit old-school, of transmitting, the fastest way to get things from london to new
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york -- dimitra: exactly. jason: it is under the atlantic ocean. dimitra: the companies that are making the biggest investments and really building these cables are the big tech companies. facebook and google, especially, that's what we focus on in our story, are making these investments as ways to more easily connect very remote places. really, there is such a need for this right now because the amount of data that is flying over the internet, when you think about streaming and voice and all kinds of things, it is just tremendous. so i don't think they can do this quickly enough. jason: later on in the program, i will tell you about the company using data to perfect running shoes. i'm obsessed with getting faster, as you know. carol: you definitely know about this area. plus, if you have dreams of becoming a pop star, who doesn't? in china, we will tell you about one guy who made it all happen. jason: from a twitter meltdown to a fake mass shooter and back again. we peel back allegations against elon musk and recent drama at tesla's gigafactory. carol: it is an unbelievable story. this is "bloomberg
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businessweek." ♪ jason: welcome back to
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"bloomberg businessweek." i'm jason kelly. carol: and i'm carol massar. still ahead in this week's issue, we've got the pop star who sings love songs like it's 2014 and topping the charts in china. jason: plus, maybe you are listening to the music in the most luxurious backseats on the road. carol: that's where you want to sit in these cars. rather cushy. and speaking of cars, let's get to "bloomberg businessweek." we've got a new report on elon musk. jason: so you may remember when musk falsely claimed on twitter
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that investors have put up funds to take tesla private, resulting in an sec lawsuit. carol: in "bloomberg businessweek" this weekend, you can read about elon musk's plot to allegedly take down a whistleblower at a tesla gigafactory. jason: and why the sec forced tesla to appoint him a "twitter-sitter." here's zeke faux. zeke: the gigafactory is tesla's giant battery factory. it is in an industrial park in reno. it is in the middle of nowhere and is one of the biggest buildings in the world. we spoke to some whistleblowers who works there, who had some crazy stories about what went on. carol: such as? zeke: this all started last june 4. this story appeared in "business insider," and it said there are huge amounts of waste, that there were wasted parts piled up high all over the factory, and tesla was perhaps using damaged batteries in its cars. from reading the story, it was
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clear there was some sort of whistleblower who had gone to "business insider." and the story was, you know -- there are so many crazy things going on with tesla, people basically moved on right away. it did not make a huge splash. carol: another day, another crazy story on tesla. zeke: right, but elon musk was not ready to move on. he was angry that anyone would leak, and he hired a special team of operatives to track down the leaker. jason: i want to talk about the team of operatives. because as i was reading the story, it takes a little bit of a left turn, and you start to talk about uber a little bit. zeke: uber had an intelligence team, and one of the members of the team blew the whistle on uber, and he said his colleagues were spying on people, reporting rival executives' conversations, hacking into their databases. he later took some back, but there was enough that the ceo apologized and the head lawyer said uber employees, stop following people around. so the members of this team, several of them sued the whistleblower for defaming them, and they said, this is going to make it hard for us to get a job.
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but it didn't. as soon as this came out they got jobs at tesla. jason: most people read this and said, oh, my gosh, this is really bad behavior, but elon musk apparently read it and said, "those are my guys." zeke: they have identified the leaker. his name is martin trip. he is basically a low-level assembly line junior engineer. and they interrogate him for hours. he admits to it, he gets fired, tesla sues him. here is where it really gets weird. carol: this is unbelievable. zeke: just a few hours after that, the local sheriff gets a call from the gigafactory. it is one of tesla's security guys, and the tesla security guy seems really worried. he says, we have just had a threat called in. we heard that this guy, martin trip, this whistleblower is coming to shoot us up. so the sheriff goes to investigate, and he finds that the threat is bogus. after the threat, the tip is discredited, after the sheriff
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says it is not true, tesla calls reporters and says "hey, guys, did you hear there was a shooting threat at our factory? it was that whistleblower guy. he sure seems crazy." like -- just in the corporate world, this is so bizarre that you would publicize a shooting threat that no one would have known about if you hadn't. i mean, even on the day of the threat, while the sheriff was trying to find the whistleblower, elon musk was emailing reporters himself and saying, "we just had this threat. it is this whistleblower." jason: amazing. so you have these, as you pointed out, you essentially have whistleblowers effectively on both sides of this issue in a
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lot of ways. where does it go from here? zeke: yeah, so this brings us to sean guthrow, one of the security managers at the gigafactory. he is actually the guy who called the sheriff to tell the sheriff about the threat. and now he has been fired, and he is saying -- he has turned whistleblower himself. he is saying that him and his colleagues on the security team went too far in their pursuit of trip. carol: right. zeke: he is saying that they had trip followed by private investigators, they misled the police about that. they were somehow able to monitor his communications to see -- because elon musk had this theory that trip was working with hedge funds, short-sellers, oil companies, that there was some sort of big conspiracy going on. and he really wanted his security team to find evidence of that. jason: up next, so exciting. it's march madness time, and one gambling startup, they are ready for the big tournament. carol: plus, growing competition in online hotel bookings. we have an interview with the owner of priceline. jason: this is "bloomberg businessweek." ♪ jason: welcome back to
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"bloomberg businessweek." i'm jason kelly. carol: and i'm carol massar. join us for "bloomberg businessweek" every day on the radio from 2:00 to 5:00 p.m. wall street time. you can also catch us on our daily show. just check out our podcast. you can find that at itunes, soundcloud, and bloomberg.com. jason: and find us online at businessweek.com and our mobile app. carol: in businessweek talks, we were joined by the ceo of bookings holdings, glenn fogel. jason: we talked to him about consolidation in the online hotel reservation industry,
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competition for big tech and the market for listing home rentals. glenn: i don't think anybody can go to sleep and not be concerned about what would google do next or facebook would do next or amazon would do next. and that is just in the u.s. you've got alibaba, you've got tencent, you've got baidu. lots of really big, technology oriented people who if they wanted to, perhaps could do something. the fact is, though, it's a lot harder than you think. we have thousands of people every day who are calling on hotels to make sure we are getting the best prices for our customer and working those relationships. that is not just technology, that is boots on the ground, that's an advantage. jason: i have to ask you -- you and i were talking right before you came on air. you have been on this company for almost two decades. how has the travel business changed? how has running essentially a travel services business changed during that time period? glenn: i was thinking about how much things have changed. i remember starting off on aol dial-up, trying to connect and trying to buy something -- oh my gosh. carol: i remember travel agents, not to date myself or anything. glenn: well, there are travel
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agents, right? less so, but now, when you can use your phone, what a difference, it makes things so easy. so much easier. but not as easy as it should be. think about all the troubles you have had traveling. think about all the problems booking something, something goes wrong, how you fix it and the fact that you have to enter your credit card several times. we are building a frictionless solution, that is what we want at the end of the day, is that you just have to do it once and it's done, and if anything goes wrong, there is someone who knows everything that has happened that can fix it. when you use ai, it is figuring out where the problem is before it happens and suggesting corrections before it happens. carol: you are spending on technology, obviously, for the platform, but you are also spending on marketing. you know that your stock took a little bit of a hit in the latest earnings because of the concerns about spending on marketing. what specifically will you be spending on? glenn: i do not think that is the reason, by the way. one of the things we talked about in our earnings call is that parts of the world are a little softer economically than perhaps they thought they would be, western europe, in particular.
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and western europe is, by far, our biggest area. so that's one issue. regarding brand advertising, we know how important it is to make sure we are well known everywhere. when you go to the u.s. and you ask somebody, where can i get a home or an apartment? they may not think of booking.com first. that's something we need to correct. if you go to europe and then you say, i need an apartment, they think booking.com. we need brand advertisers so that people understand we have a great product, a better product, i think. first of all, when you use our home product, it is instantly confirmable right away. you are not going back and forth with some host to decide you can get it or can't get it. with us, right away, you get it. on top of that, we don't hit you with a traveler's fee. after you go through the aggravation, you finally get it, and then you get hit with a traveler's fee? to me, that's absurd. we don't charge them that. and we also have 24/7 customer service. if anything goes wrong, we are going to fix it for you. jason: 30 seconds to go, how is the consumer, the traveler feeling right now globally? nervous, confident?
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how would you describe it? glenn: depends on what part of the world. carol: well, you have a lot in europe. glenn: there are some issues not only in the economy, but let's face it, brexit causes uncertainty. when you are thinking about going somewhere in europe, you're english, and you're thinking what might happen to me, they may wait to book until they see what happens next week and the week after that. in france, there is political uncertainty. who knows? but in the long run, people like to travel. carol: in the business section this week, you might remember that last year the supreme court in the u.s. overturned a federal law that confined legal sports books to nevada. jason: what does that mean? it means march madness betting is actually legal this year. carol: our reporter tells us what this means for this gambling startup, the action network. >> the supreme court ruling that made it possible for more states to legalize sports betting came down last may, and you can see it coming when the court agreed to hear the case. so around that time, chernen group, a private equity investment group -- carol: peter chernen, formerly
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of fox. >> yes. they rolled together some smaller companies that were already serving daily fantasy players and people already betting in the gray and black markets and started the action network. the idea was not to be a betting operator, but as they put it, the bloomberg of betting where they are giving you all the data and tools you need to be a smart better. carol: thank you very much for the compiment. but it is all about data. increasingly, we see a lot of data and data analytics used for players and strategies, tell us about their strategies. tell us about action network? they have a couple of tiers and they are hoping to bring in people. ira: it starts with a media company, where they are writing the stories. here is the line for the game, here's where the smart money is going. here is a funny thing that happened and a better won a huge payout. that is to get you in and get familiar with betting, download their app, and that they have a series of paid services that get more and more sophisticated. so you can get basic data about where the money is in a given bet, some expert picks for $8 a month. for $50 a month, you can start
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trying to become a system better, where you filter through decades of data and say, i think nfl teams underperform when it is windy against the spread or the home team after a bye week does better, and you can actually test your theories out and see if they do in fact bear out historically, and then he can find ways to bet that system. that's $50 a month. for $250 a month, you can look at really granular data about how betting markets are moving all over the world. so they are trying to basically be the one-stop shop for anybody from the casual to the really serious better, who just wants to read about it, or maybe for a living. jason: we mentioned chernen, a well-known name. there are a couple of well-known names recruited into this, not least of this is a familiar name to lots of folks. he covers the business of sports. he has 2 million twitter followers.
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widely followed, clearly. what is his role in all of this? ira: basically, they are trying to gain awareness right now of the brand and bring people in and he is the top of that funnel. so they hired people who have big followings, he is probably the biggest among them in the world of sports and sports betting and sports business to basically sort of grab those 2 million followers and say here is the action network, here are stories we're doing, and hey, you should buy this $8 service. he is there to report every little thing he sees and keep the name in the news. and then they will just keep building out to more states. right now, you've got about eight states with legal betting, i think it's eight right now, but they're hoping that these dozens more they are looking at will come on board. jason: for the fifth year, bloomberg, we are putting together a special march madness contest. carol: we call it brackets for a cause. jason: big names, hedge fund titan bill ackman to former ceos, and many more, they pick a
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charity and pledge a donation. carol: and the winner's charity is the real winner. jason: that is where the money ends up. we will keep you up-to-date with who is leading the bracketology. it gets pretty heated the next few weeks. carol: next, the name topping the charts in the world's hottest music market. jason: and some are betting that runners like me cannot resist more data. carol: and really, really, the only way to backseat drive if you are super, super, super -- let's just call it uber-wealthy. jason: this is "bloomberg businessweek." ♪ carol: welcome back, everyone,
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to "bloomberg businessweek." i'm carol massar. jason: and i'm jason kelly. you can also listen to us on the radio on sirius xm channel 119, also on am 11 30 in new york, boston, 95.1 fm in washington, d.c. carol: am 960 in the bay area and in london on dab digital and the bloomberg business app. in the features section, how to become a pop-star in china.
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jason: lucas shaw profiles danish star christopher nissen -- carol: you mean the danish justin bieber. jason: of course. lucas writing about how he has conquered china. lucas: he is a popstar from denmark, grew up in a suburb of copenhagen and had this rapid ascent in his home country. you know, got signed when he was 17, walked into a record label and started performing. they liked him so much they gave him a deal. his second album, which came out in 2014, won pop album of the year at the danish music awards. he had all of these number one songs and at that moment, he was convinced that he was kind of on his way to becoming one of the biggest pop stars in the world, or at the very least he hoped that that was what was going to happen. but when he tried to test the waters outside of denmark, he went to germany, norway, he did not have much success. nothing happened. but around the same time, he found out that one of his songs had started to really make it big in china. and he started to go there in 2014.
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and so since 2014, though to your point, he is pretty much unknown in the u.s., u.k., germany, japan, the world's biggest music markets, he has had eight number one songs in china. carol: all right, so what is it about the chinese market that makes him so appealing that he is not necessarily translating to other parts of the world? lucas: so part of it is that china still loves really traditional pop music in a way that most of the markets in the west have sort of moved away from. a lot of pop that is successful now coming you fold in some kind of hip-hop beats or some dance music. you combine some of these other genres that have taken over the culture of the past 10 years. but a lot of the biggest musicians, not just in china, but across much of asia are mando-pop stars, k-pop, j-pop, canto-pop stars, traditional pop in different languages. that is one advantage for him. another thing, china is just such an unproven market at this point. almost everybody, unless you are
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taylor swift, adele, or bruno mars, you are starting from square one, and christopher just chose to put in the effort in a way very few artists do because it's hard to make money out of the gate. carol: let's talk about in general, the music industry in china -- it's very restricted, right? foreign artists have to get a visa to actually perform there. i mean, there are tight controls on all of it. jason: and many have been banned. carol: yeah. lucas: yeah, there is a very long list of top acts not allowed to perform there. bon jovi, bjork, katy perry, justin bieber. and all for different reasons. some have said something about taiwan, which is a point of conflict for china. some have voiced independence movements in tibet, and if you wish the dalai lama happy birthday, you will probably not be able to perform in china. justin bieber was ambiguous bad behavior, but talking to some of the big music promoters in china, the restrictions on what
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you need to do in order to play there are pretty severe. you know, it comes down to not just submitting everything you are going to say, because there is no spontaneity in musical performance in china, which is sort of weird when you think about the whole point of live life music is to sort of ad lib or maybe play a guitar solo or sing something a cappella. but you have to submit a video of everybody who will be on stage. and that's not just for performances. i have had promoters tell me they have to submit a video of the security guard standing there for five minutes, because the chinese regulators want to know every facet of a performance because they see the potential power of music. and you have seen restrictions on what you can or can't say in china get a lot worse over the last five to eight years. carol: time for the pursuit section. jason, you have a story in this section about this shoemaker. jason: many people have never heard of it -- i see what you did there. what is so interesting about this shoemaker is they have a partnership with fleet feet. many people have heard of fleet feet -- carol: we have talked with them,
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yeah. jason: it has been around since 1976. hundreds of locations around the country. what they do is have machines inside the stores that measure your feet. they put all that data together, hundreds of thousands of scans they started with, to create a new shoe. carol: so they are creating a shoe with all of that data. it is interesting, the magazine has this week focused on what data is doing for farms and other industries, and also doing it for this industry. jason: let me tell you, runners are obsessed with tracking everything. it seems like putting on a pair of shoes, so simple, but it is so much more complicated than that. data can only make it better. carol: this guy has so many running shoes under his desk. also in pursuits this week, what it's like to be driven around in a rolls-royce santa. jason: or a bentley. carol: our reporter got to brave the back seats of the most luxurious cars on the planet. >> imagine private jet travel on four wheels. that is basically what these automakers are going for and that is kind of what you find. carol: you tested all of these, and let's go through these, because it is so much fun to read through. the rolls-royce phantom. extended wheelbase. that's important, because it gives you more room?
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>> nine more inches over the regular phantom, which is already a massive car. so this adds another nine inches, which, of course, makes room for things like champagne coolers, massagers, foot rests covered in lambswool. you can put in cases to store your watches, cigar humidors, lots of fun things like that. carol: you actually said it is two thrones? hannah: yeah. two separate seats that recline pretty much fully that have monogrammed pillows, all leather, over 10 inch touchscreens for each one. bluetooth headsets, the whole thing. carol: honey, you're watching "billions" and i am watching "outlander." [laughter]
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jason: this is a $525,000 car. hannah: base price, yes. and when i asked rolls-royce, they said over 90% of the phantoms they sell are heavily bespoked, which means this $525,000 number is a suggestion. most cost more than that. carol: what is extra on something like this? hannah: an extra would be getting the trim on the seats to match your favorite pair of shoes or your favorite color of lipstick. or to get a special safe you can keep your diamonds in that fits exactly your specific diamond jewelry that you have. jason: all right, so let's go a little bit downmarket to the lexus. [laughter] hannah: sure, yes. jason: which isn't, doesn't have all the bells and whistles, necessarily, but you point out that the appointments and the leather are pretty amazing. hannah: it is probably the least expensive car on this list, but for the price, you actually get a lot. i wanted to call that out, there are a wide variety of price ranges. the lexus is very well thought out. so while it does not have the champagne coolers and the lambswool, everything, the wood that the phantom does, it is very well thought out. a good use of space.
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the seats also tilt back to a 48 degree angle, which is great. everything is just really well thought out and again, it's big. so for the money, a great backseat. carol: i love it, you call it a 70 mile per hour hotel room. hannah: yeah! yes, exactly. and the whole thing about these is you can use them to work, to sleep, it is an extension of your day. jason: well, and we also, here in new york city, we are very familiar with the whole fleet of black cars. even with the age of uber and lyft, there are a lot of black cars moving around. the lincoln continental, well known to many of our listeners and viewers, they have upgraded that as well. hannah: they totally have. this is a continental reserve, and this is really the car that is keeping lincoln in business. it is kind of an institution. it is just like rolling through town in a big black safe. the doors are really heavy, it is silent on the inside. again, you have the nice tactile finishes, the woods of the interior, everything is electronic. you have seat controls in the back that control every motion, the massaging.
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carol: "bloomberg businessweek" is available on newsstands now. jason: and also online at businessweek.com and our mobile app. what is your must read? carol: what we just heard from hannah elliott, riding in the backseat of a car, really cool cars. really expensive cars. i love the details. jason: i also love the details, she really took us there. again, she has one of the best jobs at bloomberg. i have to say -- carol: your must-read? jason: elon musk. the reporting on that story. zeke faux has got me every time, and the team up with matt robinson who understand the fec, the enforcement mechanisms in place against elon musk, fascinating. carol: this is a guy and a company where we always hear unusual stories, but this is on a whole new level in terms of unusual. jason: absolutely. carol: you can find more stories on businessweek.com over the weekend, so check that out. jason: and check out our daily businessweek podcast. download, subscribe at itunes, soundcloud, and bloomberg.com. carol: more bloomberg television starts now. ♪
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this is the "best of bloomberg technology." where we bring you all of our top interviews from this week in tech. coming up, a criminal probe into facebook now includes a grand jury and an escalation of the investigation into its data sharing practices. we cover the growing list of controversies surrounding the social network. and both sides of the aisle are taking up the issue of breaking up big tech, but breaking up is hard to do. we'll talk about washington's new agenda. and our exclusive and widra

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