tv Bloomberg Technology Bloomberg February 13, 2018 11:00pm-12:00am EST
>> you are watching "bloomberg technology." is director christopher wray providing new details that call into question the white house timeline leading up to the departure of former staff secretary. >> i would say that the background investigation process involves a fairly elaborate set of standard guidelines, protocol agreements, etc. that have been in place for 20 plus years. it isuite confident that particular since the fbi followed established protocols. porter left the administration following domestic abuse a gala -- allegations. reportes -- a new u.s.
says russia will metal in the elections. they say it is likely that russia will try to interfere as it pursues bolder cyber operations and false campaigns against america and its allies. terrorists who set off bombs in new york and new jersey in september of 2016 have been sentenced to multiple terms of life in sza -- in prison. the injured 30 people when his bomb exploded. federal prosecutors that he try to radicalize federal inmate. global news, 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. "bloomberg technology" is next. ♪ emily: this is "bloomberg
technology." rally cools after weeks of back-to-back games. we will check in on the latest regional currency struggled to maintain momentum, and the current cryptocurrency landscape. bonanza. big tech we will hear from the ceo of gopro and prove about the cyber attack that has already plagued the olympics. blue apron may finally have a recipe for winning. we will take down its better-than-expected earnings score and weigh in with the ceos turnaround strategy. first to our lead, the recent decline gains we have seen the last two days has come to an end. the longest rally since december. for more on what is going on in the crypto market, i am joined by cory johnson. walk us through the day. cory: we do not know who the buyer and sellers are, but we have seen a bounce off the bottom from a technical basis.
in these things, we are in a freefall. as we have talked about many times, they were all trading with each other. despite the differences between the different types of cryptocurrencies all turning together. we have seen a separation between the different kinds of currencies over the course of the last week brady could see it in the price of the different cryptocurrencies. emily: talk about how they are tracking relative to bitcoin. cory: they differ. beside big bounce. bitcoin was up a fraction of that. today you saw a turnaround today, but i think there is a separation showing up. of speculation seems to be coming out of sales. the steady stream of ico's and companies rushing out to create new coins for no purpose, except for the few that did. some of these technological
solutions actually have a purpose and a point. the others are just a store of value or a way to speculate are looking -- are looking more silly. we are starting to look at these companies as different from each other. emily: japan's coin check had frozen withdrawals. million was withdrawn. what do you make of that? that there was a notion someone will buy it for more later. it was broken by the problem of , losing hundreds of millions of dollars in value. having that value, i think it surprised people. they were that buying, they were only buying get so they could sell it to someone else. it is a failure of what we do as journalists, is taught. the community of journalists, not me and you of course. talking about stocks because
they should go up or they go down because they should go down, and not talking about intrinsic values or the businesses that underlie them. at least a speculation and people not knowing what they are doing or why they are buying things. we think about cryptocurrencies or equity and investment, the underlying theme is what it will be. emily: what do you think regulators are learning from fiascoes? cory: different things. i am pleased to hear that they are not all the same and that regulation can protect investors crooks andams and let real companies flourish with a light hand where protections are needed to -- needed. emily: we will dig into regulations right now. we caught up with one of the biggest players in the digital currency market.
brad from the goldman sachs tech conference. has gone up and down with the market, take a listen. >> we have seen the markets bounce back some, but i don't follow it day-to-day. isthe peak of the market over $800 billion. it dropped down to maybe 300 billion and today it is back to 450 or so. counsel for anyone following these markets is, do not follow it day-to-day. believe this is fundamentally a movement that is changing the nature of a new asset class, to measure that over month in years. there is talk about it being the next bitcoin. is that a benchmark for you? brad: i do not think it will be one size fits all. i think it coin increasingly is digital gold.
it is a store of value. bitcoin will not solve a payment problem. the time it takes to confirm a bitcoin transaction on averages 3-4 hours. per transaction the fees are around $15 per transaction. that is faster than swift. in contract, x rp's 1000 times faster and cheaper. a sent toaction of confirming transaction and it takes three seconds to complete. i look at bitcoin at solving a different problem than what xrp is solving. i do not think there will be one them all.set to rule we will see multiple players that have success. there will be quality rising to the top and overall market has been trending. emily: volatility is due to regulation. what are you expecting? there is more regulation.
if we want the asset class to grow up and mature, of course there should be regulation. those that combat regulation are not thinking about the benefit. the revolution of blockchain will not happen from outside the system, it will happen from within the system. governments will not go away and banks are not going to go away. the bitcoin community comes from that libertarian view. hasof the reasons ripple been successful is we are working with the system. we count the bank of england as a customer. central banks are working with ripple today. we have to continue that in the future. emily: what do you think the regulation should be? brad: regulation should not change much. when youan by that is, are executing a transaction using ripple software, you will regulate institution to another regulation. your requirement stands for know your customer requirements. your anti-money laundering
requirements. ,our bank secrecy requirements that does not change because the bank is doing the on both ends. we are making the plumbing more efficient, faster and cheaper. we should continue to have regulated financial systems. are, oh my gosh, it will change, xrp is not circumventing any regulation so i am not concerned. emily: what about what is happening in asia, does that concern you?} brad: the only thing that concerns me is throwing the baby out with about bathwater. not all digital assets are the state -- are the same. we talked about the differences in the our op-ed piece. some of this is designed to circumvent regulation. i sigh founder of eight company talking about his digital asset. for jugular's and people
on tax evasion. of course there will be enforcement against that. that is crazy to me that he was in a public setting and said that. is working with central banks and within the regulatory frameworks. -- embracing the fact that it should be applied to the crypto market. emily: you just partnered with leon leon? digitale of the largest payments in china. emily: what does this mean as a partnership to come? they are the paypal's of the world. we think about how to enable low friction between them. we are going to continue to work with players across the world. ripplese understands value proposition, the pipeline of customers have grown.
i am excited to come back and keep you posted on the customer announcements. emily: cryptocurrency, 2018, what are you expecting? brad: despite the volatility, i think you will continue to see a lot of bullish behavior. volatility will continue. we are in the adolescent stage of developing a new asset class. my conversation there with the ceo of ripple. apple ceo tim cook address shareholders at the company's annual meeting. we discussed the dividends due to the tax overhaul and a slowdown in mobile payments. he also adjust the sessions plans, saying a role as ceo is passing the baton to the next leader. up, hackers took aim at the winter olympics. we sit down with the ceo of one of the companies on the frontline of cybersecurity. that is next. if you like numbered news, check
the ceo says a movement is coming at facebook and it will not be pretty. speaking at the new york times new work summit, he said that there is a threat to pull ads from the social media giant is the start of a growing backlash heinst facebook or it criticized facebook's decision to dismiss human editors in favor of algorithms. thing that started the downward spiral that they are in today. the winter olympics are off to a start complete with medals and a cyberattack. it cause network communications
during the opening ceremonies. in underscore the ever increasing need for vigilance. earlier, we sat down with the at the goldman sachs technology conference to talk about the hacks and what threats he sees out there. >> i've worked through four different waves of cybersecurity and we are in the fourth. have modern nations engaging in cyber operations were there is no rules of engagement. nobody knows what the rules should be. what is fair game, how do you conduct espionage? in media right now. because there is no risk or repercussion for cyber operations, meaning it is hard to figure out who is doing it. it is a gray area. people don't know if we are doing the right are wrong things in cyberspace. we are seeing a lot of attacks from nationstates. i do not think the gloves will come off yet, but there are
different things. interesting this idea of right and wrong, given that there are some attacks that are ok? onin: it depends perspective. every nation wants to defend itself and no other nation's secrets. geopolitical conditions will always have espionage or ideological differences. every nation is developing a modern capability for cyber operations and we have not figured out how the community operates. how would you describe russia versus china versus north a and how they have of all. break it down for me. kevin: the russians are great at this. commitow how to operations, but they cannot operate at the scale and scope that the chinese do. the chinese recently, especially in the united states, have been operating with a broad birth of targeting. they are more obvious.
they do not do as much counter forensics. north korea is less predict the bowl. they had to make money and probably for espionage. they also had to be destructive. other nations, vietnam has been on the radar. we have seen other nations compromise. iran is getting big and cyber operations. level of capability, different targeting and different fingerprints they leave behind. emily: any insights into who was behind the hacks. ? there was speculation about russia for being banned for doping. kevin: i am not sure who is behind it. we do not have that at fireeye yet. you do a major event, there is no risk or repercussion for those who do that. you have to do security and also cybersecurity. cybersecurity changing relative to last year and what is the exposure of fireeye? kevin: if you are hacked and you know it, the impact and
consequences seem higher than in the past. it used to be when you are hacked it was a business problem. but it could be much larger now. know it,re hacked any the bottom line, consequences are growing. more ceo attention and people are making sure that at least they get a good roi on security. emily: have you seen any market correction? kevin: i keep looking around, i go to the conference every year and i can't remember how many companies are there. to donds are proclaiming cybersecurity and it feels like there are only 10 or 11 ideas. i question how many companies the market can support. thousands feels like too much. kevin: how does fireeye stand out from all of these competitors? we actually do our market research by responding.
we are on the front lines responding to these breaches. vantagean amazing point. what is the threat intelligence, meaning who is attacking who so that you can assign risk in your industry. today there was a russian attack route interested in attacking the energy grid. we see them on the front lines. we have nearly one million hours, the frontline investigations every single year. youru put that into product, we are finding the needle in the haystack every day with our people. i think we have developed the innovation cycle to do that. emily: emily: do think -- emily: do you think we will see more consolidation? kevin: i think so. you saw cybersecurity becoming marketplace within the last six or seven years. thousands of companies have run into this marketplace. not all will survive. there will be a lot of losers and some winners. during that there will be consolidation. emily: who survives? every company has their
different strategies. i like to meet the founders and make sure that the genesis of a company makes sense. what they are doing a minds with their passion and experiences. there are companies that do make sense and a lot that do not. fireeye ceowas speaking with us at the goldman sachs tech summit. coming up, is blue apron finally delivering for investors? we will look at the financial results. this is bloomberg. ♪
they lost head of product and head of engineering in november. they said they will not be looking for a replacement for lucas. on company's revenue defends direct sales -- depends on direct sales. blue apron has struggled since last year, but could its year end results mean the company has ironed out some of the kinks? sales jumped and beat analysts estimates. brad is also predicting narrower losses this year. his blue apron out of the woods yet? i am guessing the answer is no, but why did the stock jump so much today? they beat expectations on revenue, as well as profit. it was more so the language that came out of the statement where andsea -- the co to go over try to patch up major problems they had over the past year.
was wordsge he used like stability and confidence. he said a lot of the problems they had over the past year had been taking care of. he said he would increase market spending, which is something they cut heavily last year and it led to growth falling off the cliff as they try to get their stuff back in order. we will see you happens. the stock did jump in the early part of the day, but by the end of the day it was back to where it was at the close before the earnings even came out. analysts digesting it are reading reports that maybe things are not as rosy as we thought in the morning. emily: what remains the biggest risk factor for this company? the biggest risk is competition from amazon overtakes them. brad thatsts asked question, how do you come out of the gate and say heavy competition from amazon, hello fresh being a key name, he said we have a lot of products coming
out this year that will change our offering and allow us to charge more money and find more customers. people said, what are those products? and he said they did not want to talk about it yet. that is where concern comes from. they do not want to be just a meal kit company, they want to be a consumer lifestyle brand and we are still waiting to see what that will look like. look at 2018,u what are the main things he will be watching? products will be eight she won. we will have to see exactly what they rollout. they will talk about it in the next few miles. it could be anything from partnerships with other food or drink companies. they have this brand that is trying to be chris -- cuisine forward or fresh forward and easy to prepare. they will be increasing their marketing and seeing where that goes from here.
the big thing is, now that they say they've got this major growth issue out of dust in control, what is the next step? quickly, blue apron came up in an unexpected place, the white house budget. what happened? the whiteried in house budget was this plan, a combination between a couple of government departments to do food deliveries to people who are getting food stamps. i am not sure if they had to do with the stock up and down of blue apron. they were not specifically mentioned, more as an example of what the government wants to do, anti-hunger activists in poverty activist were very confused by the statement. if it is any measure, it has been tough for a private company such as blue apron to make this, it will probably the tough for the government as well. emily: thank you for that update on blue apron. coming up, goldman sachs oversaw
you're watching bloomberg. checking in on the first word headlines from around the world. they indicated that the timeline for rate rises remains unchanged. the u.s. central bank is on the lookout for threats of financial stability and turmoil in the markets. president is -- sources say impress the white house. none since had stanley fischer step down. police are recommending the israeli prime minister be bribed with -- charged with bribery. favors.d influence for
he denies any wrongdoing and claims he is the victim of a witchhunt. data show japan's economic growth slowed sharply in the fourth quarter. iny were just under 0.5% three months. that is far short than the 1% they estimated and down 2.2% growth in the third quarter. will berican president at a meeting. it comes after ruling that they describe its newly elected leader will replace him as president for the transition of power. we are seeing stocks fluctuating. have a look at what you are seeing in the japanese yen. saw a through after we little bit of a miss in that data. of japanese yen up by a 10th 1%. you can expect it weighing heavily on the nikkei, which is down by 1%. --are seeing upside from the
thanks to the strong rally in tech players today. samsung helping the index. it is falling and we are seeing a little bit negative movement coming through in some of the commodities players like aluminum by 4/10 of 1%. by 4/10 of 1%. looking at the stocks in india. let's have a look at the bank of india. it has slumped in the early session due to his third quarter results. billiontecting a $1.77 at the fall, then we have seen the real estate company dlf rise after his third quarter and exceeded estimates. looking at the regional index as a whole, it's slightly comes down to the weakness you have seen coming through in the japanese equity markets. up by about 2/10 of 1%. i mentioned the strength coming through. also a little bit of a beat from energy players.
you are seeing consumer stocks being dumped once again. that sector up by 9/10 of 1%. also along with weakness coming through. we are waiting the u.s. inflation data. a little bit of a mixed session in asia. it is wednesday. ♪ is "bloomberg technology." to our coverage of the goldman sachs technology conference happening right now in the heart of san francisco. alex joins us now to talk about the current landscape. here with grade, he is the cohead of the investment banking division here at goldman sachs. thank you for joining us. m&a, debt capital markets, we have had a lot of talk these past couple of weeks about the volatility in the market right now. overseeingdeals,
raises for your clients, has that impacted this decision-making? was a pretty interesting week in the markets. it goes to show that conventional wisdom is wrong. if you went back and asked someone about volatility they would say they would never see it again, then we saw the highest amount of all time. down.rket has settled the volatility will be able to be contained. volatility is generally not a friend of ama and a friend of transactions. what may be a one-time market correction of values being down 8% to 10%. i think we will be fine. alex: your private equity firm sitting on all that cash, or looking to buy another company, evaluation correction might be a welcome occurrence. are you having conversation with your clients? gregg: it is only one week, but
if what happened last week is a percent to 10% lower, and the mindset of sellers realizing that things do not always always , sellersalways go up are being more realistic and people with cash or sitting on the sidelines. alex: talking about m&a, last year it was about slack globally in terms of value for deals. what is your projection for 2018?? do we go up above the $2.7 trillion in deals? meaningful. gregg: quantify it how you want. if we go back and look at the overall environment, we win into 2017 with a pretty robust outlet . holding your politics aside, you had an election in the u.s. that had a pro-business agenda. youad cash repatriation, had a lower benign regulatory environment. last year we of
had discussions with our clients about doing landscape and redefining transaction. the one caveat was that they wanted clarity on the regulation picture and what it would look like. they waited and you saw a big low. they finally said, i am sick of waiting. it is gridlock as usual in washington. we will just go back into the activity we will do. you did see clarity on tax reform. he had meaningful pickup and activity going up in 2018 and that was the corporate ceos and poured seeing the pretty optimistic. >> it does look a little bit different than it did back in the early 2000 when it happened. but if you look back then, a lot of companies spent that money on
dividends on buybacks. will m&a win more of that allocation? what we do at the he going to telegraph it. how much time we have to make that decision? client inlk to our anticipation of cash repatriation, it will not make a difference. we can always get it or borrow it in cash. just because we have a does not mean we will spend it. now that it is back, they are feeling it before shareholder say i want to hear it back. it will be near-term pick up as the caskets repatriated. alex: in terms of uncertainty, ,he regulatory environment there has been a lot of talk out of the trump administration. been more in have
play in the conversation that i have heard about. increase in the chinese investment or dealmaking in 2018. it fell off the map last year. the protectionism we saw from the u.s. administration and issues around china not wanting so much cash to go off short. i am not sure you will see meaningful pickup in terms of pure m&a china to u.s.. i think the regulators will -- will improve. notwithstanding what we all expect to be a nonregulatory environment. there is just so much uncertainty over which will in which well. and in china in ways we have not alex: we saw amazon by whole foods. industry and the tech industry. in terms of transformative deals, are there other areas
that you think are right through m&a third tech companies in 2018. health care distribution around m&a. for all the disruption that has taken place in technology, the technology has not been disrupting m&a. the six largest market companies in the world, they are all technology companies in all 500 billion are greater. they have not been there are in that market. they have grown organically. they come in and disrupt industries and we will see a massive trade up. alex: i will be watching those and i am sure you will be watching them get there. thank you for joining us here at the goldman sachs conference. back to you. emily: our reporter at the goldman sachs tech conference. that is happening down the street.
i do have been new numbers from google and financial results. it is good news for uber. of oneought in revenue play for billion dollars in the fourth quarter of 2016. that has almost doubled in the fourth quarter of 2017 to $2.2 billion. narrowed their losses. the company lost $882 million in the quarter of 2016, and that is down to $475 million in the fourth quarter. up, gopro is out of the drone business. what is next for the extreme adventure camera company? we will sit down with the ceo. this is bloomberg. ♪
emily: facebook's attempt to build a rival video network. speaking at the conference was a joke that facebook should get back to baby pictures. rate about competition from the social media giant. it is doubling down on its news feed video facebook watch. gopro has recently gotten out of the business, but it's chairman has not stopped his optimism. we spoke with him at the goldman conference, and if his position on a partnership for acquisition has changed. >> no. still the same. --job as ceo of grow pro gopro is to look for opportunities and create an
opportunity for our investors. as a standalone independent company, that is terrific. if we can achieve that quickly with a partner, we would jump at the chance to look at the opportunity. >> have any interested suitors reached out in terms of partnership? nick: no comment. >> no comment. if you change your mind you let us know. according to a recent filing, your chief operating officer will be leaving the company. he was someone that was supposed to turn around the business. what explains all of the executive turnovers? cj was a terrific aphid to the company and helped us build our software team. team thatart of the led us to turn around. he has done a terrific job and we thank him for that. now that gopro is even more focused in 2018 and moving forward on our camera app and cloud businesses, the scope of
the job just got smaller. addition to becoming more focused with our product line, our management team is becoming more focused. we are a more focused business and we have a great leadership team that is capable of growing gopro. >> talk about your efforts to attract and retain talent. nick: it starts with having a big enough vision an opportunity for people to grow their careers. gopro is known as being a very innovative company. we have be in -- we have been extremely innovative with our products and pioneering new categories and helping people capture and share themselves in new ways. yet the continue to innovate as a business and grow our business model in today's world. this is what we are doing with new programs like subscription. we will be growing the subscription part of our business in 2018 and moving forward. it is initiatives like is that
continue to excite, attract and retain talent that want to come and help invent new business models and grow gopro. >> we have learned that the business will be shutting down, that was something investors were excited about to turn around the business and rejuvenate growth. what can we expect in 2018 to be new revenue drivers towards the business? nick: we have a lot of opportunities at the core business. for an example, we are spending advertising the dollars right now to sell approximately the same number of cameras we did year-over-year. gopro's lineu that up is selling much more easily, and we see an opportunity to increase our advertising spend two significantly grow our business this year. we will do that within our operating envelope of $400 million. there is significant opportunity
to grow gopro's business. >> what about the software business. you talked a lot about this subscription service. how meaningful will that be to revenues in the coming years? we hope it will become more and more meaningful. as we shared previously, we have 130,000 paying subscribers. we have only really just turned on the marketing for our plus subscription services. the last year we grew it quietly. we were in test mode. we found that we had a very strong trial to paid conversion rate. we had low turn rate, which told us our customers valued the service. we think they will value it even more if we dramatically increase the benefits but cap the price the same. emily: gopro ceo and chair speaking exclusively with us at the goldman sachs technology conference. uber is betting on a yard to ramp up user engagement.
it will begin rolling out new augmented reality futures -- features for shoppers and exploring a credit program that they hope will encourage sellers to keep money on the platform. ebay had 170 million buyers and in increase in gross merchandise volume. coming up, talking about uber's tobers, doubling revenue $2.2 billion. we will break it down with eric and corey, coming up. ♪
biggestfter one of the cyber security attacks in history, equifax has hired a new head of data security. credit join the reporting company as chief information security officer and report directly to the ceo. he had a similar position at home depot. let's get back to uber. reporting and has narrowed its losses in the fourth quarter and is moving towards profitability. bloomberg editor at large, cory johnson. here are the numbers. revenue in the fourth quarter of 2016, 1 $.4 billion is up to 2.2 billion in the fourth quarter of last year. losses significantly narrowing down. cory: looks like the information got a scoop or it what we see
here is reduction in expenses. reducing ad spending. a lot of the ad spending was spent within apps. this is a mobile for his company. spending in terms of advertising, service growth, the result is, fundamentally, business is getting closer to profitability. still losing a vast incredible amount of money every quarter and minute. what we know from the past is that uber likes to talk about how successful they are on a city by city basis, or a domestic and u.s. basis. more money from outside investors is that they will go in and have the same kind of success they had in the u.s.. they had great struggles in places like china were they had billions of dollars for states competition unlike what they faced in the u.s.. business has not been as profitable. new leadership of the company changes as they inch towards
ipo. ipo is their goal in reducing losses and joining the revenue is a key to that. analysis just coming in, he is saying that uber had a painful 2017 but the business managed to grow. it is interesting that they tried to release this information, given that it is not a publicly traded company. cory: we will see. i think that they have so many shareholders, at a certain point they might have to relieve. you have to release some information. what was the requirement. want the pump for investors. stocks toto sell the the public. let's also remember that there were a lot of insiders to the company selling shares as private shareholders to the secondary market of shareholders and that that is an important constituency for them as well. emily: tim cook addressing the
issue of success. always an important question. there is a great piece out about the bench that apple has. what do you make of how could responded saying he is figuring out how to pass the baton. ? to the factaks more that we have been sitting in these chairs for a long time. it was seven years ago he wants the show in this room. the notion of what tim cook will do. it is a picture low one -- peculiar one. it is an archaic thing from a pass required for companies to address public office of shares. it becomes this comical thing of retirees and senior citizen showing up. apple is unique. people have this passion about this company as they start in
silicone value were a continues to be held. the people really built that company remain shareholders in a lot of cases of deal that they have a vested stake in the company. it is now the largest company in the world. emily: the current coo would be the first in line if this were to happen anytime soon. there are no suggestions that tim cook is leaving in the near future. cory: mark would know better than i. mark has no idea. whenwe have seen is that these things come to the floor and to a vote, you don't know what will happen. politics of always been intriguing inside that headquarters for apple. it will be no different when tim cook decides to do that. it is really important for a company. the more iconic the leader the more important together. we have seen a lot of companies do not want to be the obvious. the board might be looking around for someone who is ready to jump in the shoes and people
often get pushed out as it is about to happen. that it is going well, whether it is suffer development or changes they are making. i think when they look at the release ishe iphone the a.m. and 10 was a higher revenue event than they have ever seen before. the company continues to grow to be bigger than it has ever been, even as it faces -- emily: markets are in a calm day. ending the day slightly up. our editor at large. that does it for this edition of "bloomberg technology." on wednesday we will have a lot more at the technology conference. we will speak with the copresident and co-coo of goldman. livestreaming. 2:00 p.m. in san francisco. this is bloomberg. ♪
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