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tv   Bloomberg West  Bloomberg  December 18, 2013 11:00pm-12:01am EST

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>> live from pier 3, this is "bloomberg west," where the focus is on innovation, technology, and the future of business. the white house advisory panel calling for a significant limit on government surveillance including stopping the nsa from collecting and storing billions of phone records. talent agency william morris extending its reach in both sports and entertainment. they are buying img worldwide.
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from ipos to smart watches, 2013 has been an exciting year from tech. we are breaking down the top tech stories and the biggest controversies this year. government surveillance taking a new turn today recommending significant changes. the white house released the findings just hours ago. they said surveillance should continue but with significant restrictions. there are 46 recommendations including making it harder for the feds to get access by having third parties store the call data. the government would have to get a court order to access the records and the panels also calling for new criteria for eavesdropping on foreign
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leaders. this comes one day after talking technology with tim cook, sheryl sandberg, and are a semi. phil mattingly joins us now. what can you say about the reaction to these recommendations? >> they would have a major impact on how intelligence policy is put together. you listed are the big ones. the key is the storage issue. in this metadata collection of phone records of u.s. citizens, what this report is stating is that the government should not be the one holding that collection. it should give third party, telecom or someone else and they would need a court order to go search through that metadata. the other issue from a political perspective is the surveillance of world leaders and this is a decision that can be made by the intelligence community. this report says it should be a white house decision. going above the intelligence community straight to the oval
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office if they ever want surveillance on a world leader. obviously with going on with angela merkel is a very big the lyrical issue. about a 300 page report from the five-member review group and any way you cut it, major significant changes to how the obama administration implements its intelligence policy. >> the obama administration does not have to do any of this, but what kind of pressure does this put on the white house? >> this is the review panel's recommendations and none of them are binding. jay carney said today the president is likely to take his report on his two-week vacation to hawaii for the holidays and he will review them in january to have a wide-ranging speech to implement and talk about the policy changes they will put in place. what we know right now as this has been a rough week on this issue. you have the federal court judge stating the bowl collection program was "likely unconstitutional."
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you had a rough meeting with technology executives yesterday and they want a lot of changes to the program. a lot of pressure to make changes and this only adds to it. >> phil mattingly in washington, thanks so much for the up a. what could these panel recommendations mean for the relationship between government technology and security? we turn to a special bloomberg roundtable. bob joins us now from washington, d.c. they help businesses collect and analyze cyber intelligence and was founded by a group of intelligence and military veterans. the senior director for public policy and government affairs at the computer and communications industry association, an advocacy group protecting groups like yahoo, google, microsoft.
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thanks for joining us today. i want to start with you because your resume is quite extensive. you help stop these high targets. do these recommendations made by the panel put us at risk in any way? >> thanks for having me. it slows down the process of our ability to gather intelligence and analyze, if it does anything. for example, i like to use the 9/11 example. right before the 9/11 attacks it became evident that one of the hijackers was communicating with elements in yemen. following that, we were not able to actually collect that to analyze because it was emanating from within the united states. after that, the 9/11 report, a recommendation was made to change some of our collection ability in order to catch
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intelligence items of that value. if we swing the pendulum the other way too much into the privacy realm, i think it might slow down our ability to find things like that. >> if the recommendations are implemented as is written, they would be dangerous? >> not all of them would necessarily be dangerous. as i was saying with my pendulum analogy, following 9/11, we swung the pendulum from privacy to security. there is always that balance between privacy and security and we are trying in this recommendation to point to the needle to the preferred area where it would be the sweet spot. what this does is it goes more towards the privacy area and may sacrifice some speed in our ability to process information. >> daniel, you're part of a lobbying group advocating. the privacy groups want more privacy and protections.
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how is it being perceived in the technology community so far today? >> thanks for having me on. it's a great step forward and it's a 300 page document. my colleagues and a different tech companies are going through this as we speak but it's important to start this in balancing security and privacy. as all your viewers know, international markets represent some of my member companies biggest targets right now. it's important for internet users across the globe to get this right. it could be a disaster blow to our economic security and that's another thing we have to consider. it's not just national security but the health of the u.s. economy going forward. >> you represent facebook. mark zuckerberg has said the nsa blew it. what do you think he thinks about these recommendations?
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are they strong enough in the direction he thinks they should go in? >> i will not speak for mr. zuckerberg, but there are important things on the table. it makes it harder to collect and analyze metadata and it requires a court decision from the other day that said it's a violation of the fourth amendment. another thing i like about this, and needs to go further but it's good to start this conversation, it discusses international users. facebook and google have half of their revenue coming from overseas. if their users do not feel like google and facebook can be trusted, then it will be a huge blow to their business and bottom line. the other day, cisco released in its quarterly statement that they have had overseas sales affected him as a new study that shows the damage to the u.s. cloud computing and hosting economy could be over $30 billion over the next five years. it's important to get this right.
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>> in terms of getting it right, my question for bob, are we going to swing the pendulum towards privacy until something bad happens again and it will go back in the other direction? >> it is a possibility. i believe nsa and the intelligence community has a lot of oversight. there is an executive and legislative oversight over the intelligence community and certainly the nsa. you have to realize the people behind the scenes are constantly trying to move this process and balance as time goes on. when a large global event occurs like this, the snowed in documents, this is a catalyst in order to swing the pendulum back towards privacy just as 9/11 was a catalyst to swing the pendulum back toward security. that's how the process works but it's happening in smaller iterations all the time but we
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just don't hear about it in the public every day. >> you wonder how we find a balance. you worked inside the nsa at the cyber unit four years. what you think the nsa is doing wrong? >> i was not really on a decision-making authority to determine where we were able to stop our privacy limits but i really think it's one of the best methods we have for handling this very difficult problem. there's really no better way than we've come up with. it's a challenge to try to protect the united states, try to protect u.s. persons because the problems are not going away. there are threats out there and it happens every day. in my opinion, this was a very balanced in a calculated measure with a lot of oversight. >> how cooperative do you think technology companies like facebook and google should be? how cooperative are they willing
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to be with the government? >> they are willing to become operative but oversight and checks are in place and they need some level of transparency not per se to talk about who is being targeted but to talk about abstract numbers and what kind of surveillance also, we would like the government to be more transparent about different legal authorities under which they are operating. companies are very supportive but at the same time they care about their international users and the reputation overseas. this is something they take very seriously. it's false to say there's a trade-off between privacy and security. we can have robust oversight and checks at the same time and still respect international and domestic internet users. >> bob and daniel from the computer and communication industry association, thank you both. lots of debate about this and
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i'm sure there will be more going forward. we will be back with more on "bloomberg west" after a quick break. ♪ >> this is "bloomberg west."
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i'm emily chang. william morris endeavor will be buying img which represents sports and models. cory johnson is here. this would significantly alter the landscape of the talent agency world. tell us about the impact we are expecting. >> in this time of changing media, it's interesting that los angeles-based william morris endeavor and new york-based img will be combining. big agents in both worlds, $2.4 billion for the whole deal. img has so many of my favorite models. cristina alesci has been looking into this. >> there are too many to count. >> this is actually really
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interesting. it affects a lot of different industries. >> you say it makes a lot of sense, one agency buying another. the man who runs william morris endeavor has done this before. he combined the businesses and made them more efficient to bring on more clients and potentially having last cost is you are doing with fewer agents. this is not the same kind of business. img has an agency business but the profitability will come from developing contents, which it has been doing -- sports content. essentially, nationalizing local or college sport and bring in big-money sponsors. >> the creation of the sec league and the sec channel, the university of texas, it is created new media entities. >> it's a huge opportunity for them. can he keep the guys around who
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built the business to still build it for a new management team? ari has a big personality. you've met him. you know. do they even want to guide the stick around or do they think they can do a better job? >> we are showing pictures of taylor swift and peyton manning. >> roger federer, peyton manning, justin timberlake, gisele bundchen. >> you take gisele and i will take justin and we will both be happy. the question is not only how do you execute the actual merging
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of these two cultures but how do you execute with a large amount of debt? they did not have $2.4 billion lying around on its balance sheets. they had to go to lenders and borrowed the money so now they have to be a lot more disciplined with cash flow and they have to be very mindful of overhead. they have to keep the best agents and shed the ones they don't think are the producers and is going to be a problem. >> cristina alesci, thank you. emily. >> jeff bezos, tim armstrong, elon musk delivering some unforgettable lines this year. we bring you the best tech quotes from 2013 next. ♪ >> welcome back.
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i'm emily chang. "i would like to die on mars, just not on impact." that's a quote from spacex founder elon musk at this years sxsw conference. for more unforgettable lines from the year in technology, let's go back to cory johnson in new york. >> there are lots of limes that i want to forget. nicholas thompson, editor for the new yorker, joins us. he's come up with some of the most ridiculous or incredible thing said in technology and he's here to talk about them. i want to go through a few. tell me the story behind them. number one, jeff bezos. "are you lazy or just incompetent?" >> this is something he said to one of his employees. it was listed in brad stone's book about him.
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they do not adore the way he is portrayed. the story of the book is very interesting because it's a book about him, amazon, a very important company. his wife goes on amazon to review the book and i thought it was an interesting tech story. it is a list of about eight hostile things. >> and people don't love the books but i challenge people to find a single thing that's wrong. >> the quote gets at something about the changing opinion on amazon. maybe it's also a little frightening? >> lazy or incompetent. i'm probably both on some days. let's stay in seattle. this is from a seattle restaurant. "if you wear your google glass inside and film or photograph
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people without their permission, you will be asked to stop or leave. if we ask you to leave, for god's sake, don't start yelling about your rights." >> some people love it. the issue with google glass, and it came up in the restaurant, you can record everything around here. other people at the restaurant did not want to be recorded by someone wearing google glass. it's one of those existential tech questions at the moment. there is a culture clash. get out of here. and they say you cannot wear them. >> when i see people walking around with google gloss i'm like -- what are you doing? what are you recording? there are times when i don't want to be surrounded with cameras. >> they love it because it allows them to have a computer right there on their face. it's very efficient and simple. google thinks it will be adapted
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and we will have cultural norms around them. >> i think that fairly well captures how much of a change google glass will be as a new thing literally in your face. this one was a tweet i believe. "misogyny is hatred of women. it's not misogyny to tell a sexist joke, failed to take a woman seriously, or enjoy boobies." can i say that on tv? i apparently still work here. >> this comes from the ceo of business insider, pax. i was trying to find a quote that get that this debate over women in technology. they believe there are not a lot of coders because the industry is just so darn sexist. he was cto before his twitter account was discovered and then he was no longer the cto but it was the most awful
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representation of public misogyny in the tech industry. >> i remember this door he from tim armstrong, ceo of aol. "abel, you're fired." we've heard the recording of this. >> there were all of these high hopes. so this -- focusing on local news, the big meeting bringing in 1000 people and some insert stick a picture in the meeting and he fires him on the spot. >> as i said at the time, when you're ceo, don't put a video camera or phone in his face. >> thank you, cory. holograms have hit the live
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concert scene but do these high- tech illusions sell concert tickets? that's coming up on "bloomberg west." ♪ >> you are watching "bloomberg
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west." i'm emily chang. another quarter of sluggish sales growth for oracle. revenue up but new software licenses and the scripture and revenues dipping slightly. the revenue from hardware systems and changed. apple will start taking orders for the new mac pro tomorrow. tim cook tweeting they started making the whole computer in the usa in austin, texas, calling it the most powerful mac ever. it starts at $3000 and 1/8 the size of the current mac pro. one of the biggest airlines says they will not allow in-flight
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calls. internal research says it would be a disruption. last week, the fcc voted to seek public comment on ending the ban. 2013 has been an exciting year for technology to say the least. stories about the problems with healthcare.gov, virtual currency bitcoin dominating the cycle below are the top five stories? joining us with his top five, maynard webb from yahoo and he is currently on the board of salesforce as well. he founded a seed stage firm. great to have you here on "bloomberg west." number one, not surprisingly, the nsa. >> security as a whole is a big deal.
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>> still today months after the edwards noted leak. >> absolutely. security will be with us for a long time. some people want more freedom and some governments want more access to information and it will be something we battle for quite a while. >> some have been more vocal than others. mark zuckerberg saying they blew it when it came to surveillance practices being invasive. what do you think? >> i would love to tell you what we think but you know the board policy. i would say that yahoo has been front and center on supporting, with facebook, more scrutiny on this topic. >> one of the things that you point out when it comes to security is the rise of disappearing information in companies like snap chat. i spoke to yuri milner about this and he thinks it's a whole trend where not everything needs to be permanent.
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not all information needs to be preserved forever. >> people will get more and more terrified about what they have, who has what, where it goes. you will see more and more trends. it's about making sure you have different ways to experience money that is not controlled by the government or nation states. >> you think companies like snapchat are here to stay or is it more of a fad? >> kudos for the growth snap chat has had. it's too early to tell whether they will be around forever but i think the issue of privacy is going to be something people are very concerned with for a long time. >> what are the opportunities out there given your concerns about security? >> i think the industry continues the two raise their game to do a great job here and ensure that the people are secure as they go about their business.
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i think all the big companies need to look at that but there is a ton of opportunity for small companies to go in. we have one company doing really great. this is a ton of opportunity for out. >> let's look at the biggest growth stories of the year. in consumer technology, it seems like consumer tech made a comeback. what do you think about that? >> alibaba is blowing the doors off. every time you turn around, they have an amazing amount of growth. tumblr was bought by yahoo. i think the enterprise space also had an amazing year. i don't believe there's a company out there like the size of salesforce that has ever grown at these growth rates.
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>> do you think the consumer comeback will continue into 2014? do you think consumer technology there is all this talk about a bubble, valuations being too high, the think they will be justified? is something wrong actor >> i think it depends on which investment you are talking about because valuation is a tough deal but i believe that we will see more growth in consumer tech in 2014. >> any areas in particular? >> i'm very focused on mobile. i think it continues to be a hot area. i do believe the monetization of mobile will catch up with what's going on on the web. take a look at one of the companies we have invested in that are doing great. they look at the mobile experience -- >> remind us what they do?
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>> they market it some other way but that's just what i call it. >> we will talk about mobile after the break. maynard webb, chairman of yahoo, back with us after the break talking about the top tech stories. forget album downloads. ♪ >> i'm emily chang and this is
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"bloomberg west" on bloomberg television, streaming on your ipad, and on bloomberg.com and now on apple tv as well. we have been talking with yahoo chairman maynard webb about his tech stories of 2013. we are moving to mobile. mobile has been big. you think mobile really came into its own. >> it grew tremendously in 2013 and it will be an even bigger story in 2014. everyone says mobile first but development the starting to
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happen first on mobile devices and experience on mobile first israel. data is another big trend around mobile. what's going on? i believe monetization on mobile will begin to catch up with monetization on the web as well. >> you said mobile has become on par with desktop. do you think it will surpass? >> the monetization has potential to surpass what you've been able to do on the web. it's not there yet but its coming. >> you mentioned big data. one thing we've been talking about is there's a lot of data and it's out there, but how do we actually use the data, analyze the data and make it valuable? >> a lot of people can collect data. how do you serve it in a relevant fashion and give an experience that they want? i
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spent a lot of time not only on big data but the synthesis and who delivers what to whom. >> your next top story, people still matter. were they starting to not matter? >> i wrote a book on this topic earlier this year. frankly, people are more dissatisfied than they have ever been. >> why? >> the age of the paternalistic company is long gone and people are now on their own more than ever. they like to be entrepreneurs but there is this disconnect with how companies work and how people want to work today. >> you have techs paying higher
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salaries than ever before and offering perks that are unheard of. >> if people don't feel that they are growing and learning, they get the satisfied. a lot of people look to the company to solve that and i tried to get people to look to themselves and be the ceo of their own destiny. we need more focus on this than ever going forward. >> what should people do? what is focusing on your own destiny mean? >> do not cede control to any company. take control of your own life and career. understand that you have to get voted on the team every day by your employees and understand that you have to get rehired every day. >> interesting. your last story, the rise in the sharing. the uberization of everything. >> it was an interesting mashup sharing and mobile building an entirely free mesh mobile network. you share your phone and network
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access with everyone to make your service better. it's called open garden and it's early. they are thinking differently about how to share and deploy. >> can it really be done well with everything you go >> a lot more than we think. i could not find a seat for the super bowl. we got a few more tickets and my wife and i had an unbelievable experience through air bnb, there was not a hotel room to be found. >> the uber pricing strategy has been under fire. there was a big snowstorm in new york and the charged up to $35 per mile. they said it is to increase supply to meet increased demand
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and attract more drivers on the road. is that fair? >> if you treat people correctly at all times, not just when you have a chance to take advantage of them, it's a better long-term growth strategy. i'm an investor in relay rides sharing your personal car. i understand you can get opportunistic pricing based on certain things. think of the super bowl in new york city, i'm sure the rates will go up. that leaves people with a bad taste. >> you think uber was taking advantage. >> i would not go that far. i would ask that they take a look at the strategies and ensure what they do for the long haul to retain customers and not just when you can optimize for a special circumstance. >> in your view, that would be more fair. >> they did something different for sandy where they were working very hard. >> they've done promotions in
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the past but in situations like -- it's winter on the east coast. what should they do in this situation? >> i think you find a way. it's supply and demand the. if they have enough drivers willing to go do that and make money for the drivers willing to do it and can satisfy demand, i would love to see that. if they are in a situation, there is not enough a supply of drivers then maybe the economics have to change to force more people out on the road. >> do you think uber should take a smaller cut to pay their drivers more and charge riders less? >> potentially. you should know is make sure the consumer is the one who feels the best about the transaction. >> maynard webb top five stories of 2013. we will be looking for the top stories of 2014. maynard webb, chairman of yahoo. and now to our series, the digital remix, how technology is changing music.
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these days, artists make most of their money and live performances turning to technology to draw the crowds. cory johnson is back with more. >> it is crushing the music business so ironically technologically driven changes is changing the concert business. some of those changes are just an illusion. ♪ young again? alive again? a hologram, rapper odb who died in 2004 hits the concert trend this summer. the hologram started with tupac shakur last year at coachella. 15 million watched the hologram and his sales grew 500%. a similarly ecstatic response for digital domain which includes 75% in just eat it
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weeks. why set the stage with a hologram? with digital destroying the new music model, live concerts have become the industry's bread and butter. rappers bone thugs 'n harmony are creating an interactive experience with their longtime mentor easy e. >> we bring the live element with the avatar and recreate that whole existence of easy e and his life. >> truth is, this technology is an old trick. here's how it works. images are projected from above the stage onto a mirrored surface which then reflects the images onto an angled transparent screen spanning the width of the stage. >> give me something that's worth all that money.
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>> it looks so real. what company makes this? >> a company called av concepts. they've done it for cher, celine dion, your favorite. it's an interesting business. they do a lot of big technology conferences. this has been a neat trick for them. it did not work for this concert that shut down nearly as they tried to get it to take off the way they wanted. >> we will see how it works in the future. cory johnson, thank you. our mobile devices can make cashless payment and hail a cab. what do we expect next? that's right after the break. ♪ >> this is "bloomberg west."
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i'm emily chang. we saw the rise of mobile dominance, the sharing economy
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explode, and a creation of an internet of things with smart tv, smart watches, smart thermostats. will they converge into a mobile connected world? cory johnson joins me with what to expect in 2014. >> they're wanting to connect digital and physical worlds like any before. ebay is at the center of this. a little start up dialing getting the payment mojo, hotel tonight, airbnb. joining me now, matt ready, did you see the ebay special last week? >> it was fantastic. really enjoyed it. >> we talked about your service. why buy it? why not just build it? you have figured out the future of payments.
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talk about how you imagine this connected experience. >> one thing happening as people move to mobile devices, we're moving from inteny driven to context driven experiences. it started with intent, going to google search for something. versus in the mobile world where you're not really willing to do a lot of data entry defined what you want. you are starting to expect applications to know about you. when you take an uber ride and the payment happens, you expect it to know you. there is a various experience. >> the reaction to this uber pricing we've been talking about is the one recently wrapped so strong as people have this
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closer connection with the uber experience. >> people really do embrace some of these apps. uber, airbnb, fab, they come to love them and it is a day-to-day part of their lives. >> i'm going to bring up competitors square because they get more attention arguably than you do. it's totally not fair. i've had the experience with square and we can see you're on your phone, paid for, done. it's an amazing experience. >> you are seeing more and more. you have paypal beacon. >> he showed me that very exciting. >> to have your payment information and they know you like a tall skinny latte extra hot. that is the context driven experience. you start to expect that, of course, they just know what you want.
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>> do you have any data? people spend more with credit cards than cash because they don't feel like they are spending as much. do you have any data on how much that value happens because of using a service like yours instead of a credit card? >> for mobile optimized, it is getting a higher average total. it varies from one application to another because they have a different buying experience but some will be 10%, 20%, 30% higher than on mobile or desktop. >> that's a huge convergence rate. >> sometimes they are 75% worse in versions. it can be a great opportunity if you optimize awry thread if you have not. >> braintree ceo, thank you so much. cool stuff. >> it's time for the "bwest byte." what do you have?
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>> $6,585,000,000. that's the giant amount of paypal transactions growing at a rapid pace. electronic payments are a thing of now and growing fast. >> paypal has become nearly half of the business for ebay. you can imagine when it will become the majority. david said paypal growth was going to re-accelerate which is pretty crazy, right? >> they were very committed. i can imagine it is a very separate business. it would give them a very different valuation if that were the case. they are separate but connected in interesting ways. i don't know if they have plans to do it. >> you should ask bill ready. >> i will grill him as soon as we are off the air. >> thank you for watching this edition of the show. we will see you back here tomorrow.
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>> live from pier 3, this is "bloomberg west," where the focus is on innovation, technology, and the future of business. the white house advisory panel calling for a significant limit on government surveillance including stopping the nsa from collecting and storing billions of phone records. talent agency william morris extending its reach in both sports and entertainment.

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