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'Best of Bloomberg Technology' Full Show (3/15/2019)

'Best of Bloomberg Technology' Full Show (3/15/2019)
I'm Emily Jackie this is the

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of

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technology

where we bring you all our top interviews from this week in tech coming up a criminal probe into Facebook now includes a grand jury in an escalation of the investigation into its data sharing practices we will 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 tech agenda and our exclusive and wide-ranging conversation with former UK Prime Minister Tony Blair of the global tech landscape first to our top story the US Justice Department has broadened its investigation into Facebook to include a grand jury signaling an escalation in the ongoing federal probes of the companies data sharing practices plus sudden departures of top Facebook executive CEO Mark Zuckerberg announces that chief product officer Chris Cox is leaving the company Zuckerberg made this statement which he shared with employees before it made it to the public for a few years Chris has been discussing with me his desire to do something else he is one of the most talented people I know and he has the potential to do anything he wants but after 2016 we both realized we had too much important work to do to improve our products for society and he stayed to help us work through these issues at this point we have made real progress Zuckerberg also announced the head of whatsapp Chris...
best of bloomberg technology full show 3 15 2019
Daniels is leaving as well this of course not the only issue Facebook is facing this week from about noon Wednesday into Thursday users were unable to access the social network and its related services globally including Instagram Facebook Messenger and whatsapp in what turned out to be a massive outage as federal investigators launched a probe into the social networks data sharing practices Thursday we discussed all things Facebook with Chicana me founder David Kirkpatrick and

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's Sarah fryer you may not have heard his name as much as you've heard of Mark Zuckerberg or Sheryl Sandberg but he is like the soul of Facebook he does the orientation for new employees every Monday he's in charge of all of the products Facebook Instagram inner circle well absolutely but even more than that he created the newsfeed I mean he's he's the guy who is is really the face of this product internally so it is a big jarring change for Facebook employees now in his own statement Chris Cox said for over a decade I've been sharing the same message that mark and I have always believed social medias history is not yet written and its effects are not neutral it is tied up in the richness and complexity of social life as its builders-- we must endeavor to understand its impact and take up the daily work of bending it towards the positive there so he's clearly alluding to the big existential issues that Facebook is facing right now but why do you think he's...
best of bloomberg technology full show 3 15 2019
really leaving is he leaving because he's fixed a lot of things or is he leaving because he couldn't fix a lot of things well also in that post there's another little line that says they're entering this new era of product development that is going to be focused more on encryption and apps that are connected and the messaging is is so private that not even Facebook can see it he says Facebook deserves executives to take Facebook into that era who are excited about that change so he's saying that he's not excited about that change let's talk about Chris Daniels the head of whatsapp leaving and interestingly as Zuckerberg saying he's not filling Chris Cox's position and but he is sort of elevating the heads of each of these products whatsapp Facebook Messenger and Instagram tell us about Chris Daniels the head of whatsapp he's leading - he's leaving - so Chris Daniels was formerly the head of internet.org which was Facebook's Zuckerberg personal project to try to get more people on the internet sort of connected to what's up and that it was very international but running a messaging products a very different ordeal we don't know exactly why he left but it's a very difficult time for what's up right now because they're facing all the scrutiny from governments around the world there are what's up lynchings in India all this misinformation that has spread on on whatsapp that is encrypted and so Facebook...
best of bloomberg technology full show 3 15 2019
can't really do much about it except for changed its rules so that would be a very difficult job to do all right David Kirkpatrick is joining us now from New York of course David you were at the book on Facebook I'm sure you interviewed Chris Cox several times in that process what do you make that he is now leaving well I agree with everything Sarah said about his centrality to the company I mean he has in my mind been in many ways the person closest physical Berg from a product standpoint which is why Zuckerberg gave him oversight over Facebook Instagram and whatsapp I mean that basically he's been running all the products I also think it's interesting that he should be leaving and Daniels who runs whatsapp leaving just a few days after Zuckerberg declares essentially that whatsapp is the center of the new Facebook so to me it bespeaks some degree of conflict and disagreement how much is hard to say but clearly I someone like Chris Cox would not be leaving now with Facebook so under fire just because you know he's tired after 13 years that's not what would happen which reminds me that when Mark Zuckerberg released that memo about privacy last week he actually talked about getting new leaders on board and the challenges of getting new years on board who would be aligned with this new mission perhaps this was an allusion to him knowing that Cox and you know perhaps Daniels as well David would be leaving well one way to interpret this you know so many...
people have questioned the sincerity of that memo from last week or week before last whenever it was my time is miss miss miss missing but this actually suggests that really Joker Berg is making a dramatic change and making it fairly fast that's another possibility and and as as Sarah was saying it may be or it really could be that it's not the in in Chris Cox's wheelhouse and he wants to leave because of that I mean it's very shocking though to me to see those two guys leaving at the same time Daniel's too is on the inner circle so now let's talk a little this is on the same day of this massive Facebook global outage which is believed to be the biggest outage that Facebook has ever had which affected all of the certain its services and perhaps is evidence of you know a the power of Facebook being concentrated you know all in one place and but also the difficulties of managing that and especially when you have these different services get more and more integrated right you have you have whatsapp you have oculus you have messenger you have Instagram and then Facebook itself in yesterday they were all down not to mention the ads managers this the service for serving ads on Facebook advertisers were telling me that they couldn't see their campaigns and how they were running the in it gave them a sense of like is there really an alternative right we we were just

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ed him a map of the outage there as of noon today and Facebook has said it's...
resolved the issues there are you know a few hundred reports still of people without service but if you looked at that map yesterday it was red all over this is a heat map David do you think this as Mark Zuckerberg is also planning to merge the infrastructure behind what's up and Instagram and Facebook Messenger do you think this is you know just an isolated incident or is it a symptom of a larger issue at play well I think Facebook has said so little about what actually happened we were left guessing one of the strangest things about it was that it wasn't just the blue Facebook it was also Instagram parts of whatsapp even oculus that is extremely surprising to me that that they should have an architecture that would at the moment allow them all to somehow be connected enough that they could be simultaneously impaired in it it does underscore the risks of making it all one big integrated system which clearly is happening coming up our exclusive and wide-ranging conversation with former UK Prime Minister Tony Blair discussing the role of big tech on the global stage and if you like

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you this week I caught up with former UK Prime Minister Tony Blair about the role of tacking government as he wrapped up a tour here in Silicon Valley I started by asking him about an op-ed he wrote in TechCrunch where he said quote populace of both left...
and right have risen in prominence and in their search for scapegoats to sustain their success Tech is now firmly in their firing line take a listen to why this concern several politicians exploit people's anxiety about the pace of change and the accelerating pace of change to see these big companies these wealthy people who run them and they target the companies and they target the

technology

is something that is going to disrupt and change our lives of ways that we can't control and it's basically a bad thing and my view is that this technological revolution is a fact but in any event it's essentially a good thing but we have to deal with its consequences but if it's handled in the right way it can change our lives in good ways and it could offer enormous opportunities and it's up to politics to address how we access those opportunities and mitigate the risks because it will also for example displace jobs you also say that the first politicians who matter the tech revolution will decide what the future looks like how so because I think if it is if I'm right in saying this technological revolution is the 21st century equivalent of the 19th century industrial revolution if I'm right in saying that then you know look back on what the 19th century industrial revolution did it changed the way people lived and worked it changed the relationship between the countryside in the city in the end it changed the laws it changed politics to change...
everything and this will be the same so the first politicians that come along and understand it master it makes sense of it and

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how this can form a narrative of the future this is essentially optimistic those are the ones that will will succeed politically so Democratic presidential candidate u.s. senator Elizabeth Warren has just proposed breaking up the biggest tech companies Google Facebook Apple Amazon I assume you don't agree with her proposal but what do you think and I don't agree with her proposals but I think is a really interesting speech and you know to be fair to her I think you know it's a speech with an intellectual coherence to it and and I think it what it

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s is I think where the Democrat platform may well go and exactly the same issues are going on in the UK and Europe that there's big take personally I think a better way of dealing with it is to regulate them throughout having a regulator for these large tech companies because I think if you try and break them up I'm not sure that really works I think if you trying to you know slice them up you'll find enormous difficulty in doing that and it's important always to understand that one of the reasons these companies are so large is because they're offering a service people want so yes there are huge questions that arrived out of their their dominance and their power but I think it's a better way to regulate this in a way that has the Public Interest put into the mix...
when we look at these companies in a sort of structured way than think that you're actually if you cut them in three you're gonna create creative competition so what is that regulation look like to you and should the u.s. take the lead of the EU which has been in print tough on big tech yeah but I think it's less about sort of being tough on not tough it's working out what the right way to do it and one of the other things we suggested by the way is that it would be sensible particularly given the huge competitive power of China in AI particularly in time to come it would be sensible if europe and america work together on this now because if you created a more level playing field between europe and america you would actually you would give people the opportunity and to develop technologies of the future would allow these companies not these big companies and they're big enough already but other companies to grow and you know it would i think it would be very sensible to have a kind of transatlantic alliance on on regulation of tech for the future but the purpose of it should not be that hit them or be tough on them the purpose of it should be to represent the public interest because obviously there are public interest issues that come with this and the sensible thing rather than trying to decide each of these issues by either as I say breaking the maps I'm not even sure that that would destroy their monopoly power if you if if you broke them up we...
might just find you you've created three monopolies not one do you believe they're a monopoly well they are powerful let's say they're you know if you take Facebook Google Amazon they're incredibly powerful they're likely to become even more powerful in time to come but I think a better way of doing it is to look at it in terms of say what is how do we have the public interest into this so I think these companies where I think Elizabeth Warren is right is that they are like utilities right their utility platforms and so you know the same way when I don't know electricity and the water industry and other things were created in the 19th century and they were created first in the private sector in time people said well these are utilities everyone depends on so they're gonna have to be publicly regulated some cases people have even went to publicly owned but the point is if they've got that amount of power there will be a demand from the public that the public interest is taken into account but I think a better way of doing that is to have regulators that work with those companies rather than break them up so Facebook for example multiple scandals compromised the data of millions and millions of people many apologies Mark Zuckerberg the CEO has now said we're going to focus on privacy we're going to focus on private communication is that enough well I understand why you want us to do that and privacy is obviously an issue but I think...
the central question for all of these tech companies is power it's their power I mean they are powerful how you know if you look at the their dominant position in advertising or if you look at the role Facebook inevitably will play in in politics today now what I think is in a way absurd is to sort of say to them you've got to be responsible for everything that's happening the truth is is a joint responsibility you know we have also we have a public interest in making sure that they exercise their position responsibly but we're going to also have to work with them to share that responsibility from the public policy point of view because many of these questions you know whether it's hate speech or incitement or so for example radicalization or child pornography whatever it is these are things that obviously use a public interest in sorting out but that public interest is going to require not just those companies to behave responsibly but government to be alongside the process of that and making sure that it's done in the most effective way so how can we trust the companies to understand and live up to their responsibilities and similarly how can we trust government to not you know be mired in this political process as we see in both the UK and the US and actually do something this is a challenge but you know in the end the challenge is

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addressed I think by a concept of Public Interest regulation and whether you do that one for each individual...
company you might because there are different issues that arise for example in relation to Facebook or Amazon Google are quite different questions that arise but this is the world where where we're living in but you know there's a bigger question which is then what happens for example if you take their driverless cars and the next generation of cars is likely to be electric and put them in time driverless so this is going to change employment it's going to change transport it's probably going to change insurance it's got a massive series of implications that was my exclusive interview with former UK Prime Minister Tony Blair coming up by 2025 India is set to be the world's third largest economy and venture capital firms are anxious to get in on that growth what trends investors are seeing in the country's rising tech scene next Plus Google power struggle new court documents

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co-founder Larry Page worried he would lose control of the company in 2011 and delivered what one director called a veiled threat to quit this is

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you on Monday NVIDIA agreed to buy chip maker Mellanox and its largest purchase ever the deal for the Israeli manufacturer is worth just under 7 billion dollars and despite the size of the deal it is still smaller than the top 4 semiconductor deals of all time the move is expected to help Nvidia push into a market for data center components and meet the need for greater processing power across networks

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managing editor for us deals Elizabeth Fournier gave us their reaction to hear it from Nvidia data centers in the future are going to be not just a group of computers they're going to be all one big computer basically so the interconnects between all those individual components become more important and you spoke to the CEO last night that's right and that's where NOLA Knox comes in because they do the interconnects and that's why it's important for Nvidia to get hold of us now Elizabeth how does this fit into broader movement we're seeing in the chip sector there was a big wave of consolidation in the industry which seemed to have stalled up to this point that's right I mean three or four years ago semiconductors with a kind of hottest name in M&A there was a huge amount of consolidation a lot of it led by that sort of a Vargo broad compass and you know companies try to do similar things last year I'm sure you remember bro calm Qualcomm and then the NX PDL that fell apart and what's happened is you know people have tried to do big deals and they've really been pushed back by regulatory concerns so what we see now is a shift to some of these smaller deals which as you said this is a big number but it doesn't rank in those that top five deals ian is this deal going to be subject to regulatory scrutiny well if you looked at what happened with the share price today no I'm not goes up but it didn't go up...
to the offer price that's a sign that people are concerned that particularly in China it's going to face that kind of regulatory scrutiny which could take a while so Elizabeth in terms of what else could be in the pipeline would you say we should be looking for deals but smaller deals I think so I mean we know that this was a competitive process that there were other bidders around this till the end so we can assume that they're still looking for similar bolts on things that they do and you know Ian's the expert in this in this area but we know that there is a lot of the sort of one to five billion dollar companies out there there are potential targets in you here everything in the chip sector I mean what kind of chatter are you hearing about what could be coming next well I mean the logic hasn't changed right there are still a number of companies out there that just frankly aren't big enough the costs have gone up they're okay they're doing all right a reasonably profitable but they're just really not big enough to stay competitive long term one analyst note today said Cray computer are in a similar kind of business maybe they're the next one to become become a target here but there are a lot of companies that are arguably subscale and NVIDIA beat out Intel what does that signify that signifies that they wanted it more than Intel that it wasn't just Intel according to some of our reporting there was you know a number of other...
companies were interested and that may have prompted this deal to be announced when it was you know regardless of whether it's going to be you know an easy process and approval or not so Elizabeth what else could be in the pipeline that you are watching well in in terms of tech that the big thing we've got our eye on is obviously IPOs and a lot of those can go down the M&A route but I think in semiconductors as in said their own you talked about Intel was the name that lost out here maybe we look for them to do to do something different as an alternative

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Xion King and Elizabeth Fournier well India is coming online at an exponential rate growing from 200 to 500 million users in just three years and investors are jumping at the opportunity to be part of that growth since 2015 Lightspeed India partners has raised two new funds totaling 310 million dollars and with six partners across its Delhi and Bangalore offices it has become one of the largest VC teams in India visual samaya a partner at Lightspeed India partners joined us Tuesday to talk about growth there we started investing in India as lightspeed actually about 12 years ago and then as the opportunity opened up we decided that we would we would start dedicated funds for the region as we saw mobile growth really exploding and leading to the internet growth that you just spoke about so the growth in India has been astounding I mean 20 million people online in the year 2000 that might be 700 million in...
2020 so how do you even begin to assess the opportunities I mean is are they just exploding or you know is it pretty obvious where you should be putting your money no it feels like it and I think what's changing is at the same time that you have internet growth exploding you have now a cycle of repeat entrepreneurs in the market that are forming for summit from some of the more scale companies and you have more and more risk capital available so you have these the intersection of multiple different things happening macro tail winds are strong that's leading to a lot of opportunity and I think that what we're beginning to see and what we're excited by is that

technology

is making its way into every industry so it could be commerce and retail hospitality one of our companies or your rooms is is is doing a great job their logistics ride-sharing transportation media so a lot of the things that we've seen in other parts of the world in other large digital economies is beginning to happen in India big US ecommerce and commerce companies like Amazon and Walmart have taken an interest in India you know Amazon has invested billions of dollars Walmart bought Flipkart of course in a big coup yes and those businesses combined logistics and e-commerce how is has their arrival impact in your job yeah you know I think it's a it's a net positive thing because for us is early stage investors we want to build companies that ultimately will get public or will have...
some form of exit so the idea that there is downstream capital or strategic investors or buyers for these companies is a good thing one of the things I often say about India is it's an open market so it's the world's next big digital economy it's open and what that means is now capital and interest is coming in from all over the world so it could be the US and US strategics there are there are Chinese strategics and investors that are getting very active folks like Naspers so this capital flowing in from to the world I think that's good provided it's ultimately used in the right way Lightspeed India partners may Jule samaya coming up Democratic senator Elizabeth Warren continues targeting big tech why she thinks breaking up US tech giants could sustain market competition next and will protect his live streaming on Twitter you can check us out at

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and be sure to follow our global breaking news network tick-tock on Twitter this is

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you welcome back to the

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of

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I'm Emily Chang Democratic presidential hopeful senator Elizabeth Warren is going after a big tech after laying out her proposal to break up big tech on media blast week Warren took her arguments to the annual South by Southwest festival in Austin Texas she told an audience of many tech entrepreneurs that breaking up companies like Amazon and Google would keep the marketplace competitive that opportunity to do what you do

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to come up with a great...
idea to work your heart out to make it happen to be able to compete on a level playing field is taken away by these platforms ayats so my view is break those things apart and we will have a much more competitive robust market in America

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's executive editor Tom Giles as well as

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Susan Warren who covered the parade of Democratic presidential candidates at South by Southwest joined us on Monday to discuss she put a lot of thought and time into this there's a couple different prongs one of them very you know straightforward break up big texts and break up some of these mergers for example Facebook bought whatsapp Facebook bought Instagram she talked about Amazon and Zappos so she's got a list of like deals that she would take a clay take a closer look at and she's invoking like AT&T back in the 1980s and some of the big trust-busting cases in US history but she's also there's also a more nuanced argument and that's where when these companies start to operate like a platform like a utility and they're also competing as part of that platform or with those platform participants that's where she also was looking for some kind of way to separate out those businesses so for example Amazon Amazon is a case that she keeps coming back to time and time again that's a case where Amazon has created this huge marketplace for millions of sellers to go and peddle their wares but Amazon is also a competitor in there and she cited...
actually strike zone is selling its own batteries quiet labels exactly exactly and I just noticed that she cited our colleague Spencer so for a story that he wrote about a couple of years ago where once Amazon sees that your product is starting to gain traction on his platform its gaining you know popularity Amazon has a way of creating its own white label version of that and and creates this competitive atmosphere for its marketplace participant now on stage she talked about Amazon Facebook Google and in an interview with the verge she added Apple to this category and she said Apple you've got to break it apart from their app store it's got to be one or the other either they run the platform or they play in the store they don't get to do both at the same time so it's the same notion and you could imagine I mean there's got to be an interim step where you know maybe these proposals start to gain traction and maybe instead of actually a

full

breakup you see a company like Apple potentially maybe getting out of some of the businesses where it is allegedly competing with app store participants I mean that could be an interim step another interim step for example would be you know close paying closer attention to the ways that Facebook for example operates and and spreads information and maybe you know forcing them to be a bit more transparent about who is funding a particular advertisement who is behind a particular piece of information that's being...
circulated around face people have talked about kind of treating Facebook and Google for example more like traditional media companies so there are interim steps meantime senator Amy Klobuchar is also running for or Dakota you know now she's running for president said she wanted to see an investigation to see if breaking up tech companies is the

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option Susan how were the other candidates received at South by Southwest by this tech-savvy crowd I think everyone was all the candidates that I heard speak were very interested in seeing more regulation over the tech companies none of them went as far as Elizabeth Warren in proposing a breakup but they were open to just studying this question looking at what needed to be done closer scrutiny of the mergers maybe even a little bit of retrospective regulation of mergers was proposed and just overall solving this problem that nobody anticipated having 30 years ago Tom have we heard a reaction from any of these tech companies so far on this they're not saying a lot you know they're lobbying in Washington we have good reason to lie low on this will lay low on this one look at the fact that this these proposals have come out this early in the campaign

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s that this issue is not going away

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's Tom Giles and Susan Warren their meantime ads for Warren's campaign making her case got taken down from Facebook and then quickly restored in response Warren tweeted curious why I think Facebook has too much power...
let's start with their ability to shut down and debate over whether Facebook has too much power thanks for restoring my posts but I want a social media marketplace that isn't dominated by a single sensor she got an unlikely supporter and senator Ted Cruz who retweeted Warren's saying first time I've ever retweeted Elizabeth Warren but she's right big tech has way too much power to silence free speech they shouldn't be censoring Warren or anybody else a serious threat to our democracy so what would a big tech breakup look like Roger McNamee television partners co-founder and author of zicht joined us Wednesday to weigh in I really like what elizabeth warren is doing to be clear she first reached out to tristan harrison me back in the summer of 2017 with her early thoughts relative to what was going on in

technology

and i was incredibly impressed by the insight she had in comparing what was wrong in tech to what she'd seemed go wrong in the banking business where essentially you had markets in which one side had vastly superior information and was able to control the information available to the other side and where people who made markets were also participating in them and so when this thing came out i you know i've studied it very closely and I believe antitrust is essential in two different ways first is the big tech companies really I'm talking about Google Facebook Amazon our blocking competition from startups in their immediate area...
they're basically causing innovation to come to a stall in in in around the core Internet and they've been amazingly successful with this and I just think that's a terrible idea I want in that and Warren is very much on that issue an antitrust it's a super group pro-growth way of doing that historically in tech starting at 56 with the AT&T consent decree through IBM the second AT&T breakup case Microsoft you've seen massive new industries created by using antitrust to stop the incumbent from dominating new spaces so I like that I also like the notion of preventing companies but the topic we were just talking about relative to Apple companies that operate markets from also participating Google and Facebook do this in advertising Amazon does this in its marketplace and I just think that should stop I think the cross subsidies and cross sharing of data are also really really bad and I believe that warrants proposal is a first step down that and I'm very supportive I recognize the people to point out that the history of tech you know was misinterpreted in some of the statements that came out there I really couldn't care less and the reason I couldn't care less is because I think the issues in tech the power situation the dominance of the public square the manipulative technologies that people are using the surveillance that is now pervasive in our lives that's just bad for society and we should not allow that that the new new tech...
companies a little bit like the the they're kind of like the companies the early 20th century you know the robber barons so Standard Oil and and JP Morgan and all I should point out Roger that there's no real break up threat under today's laws and under anti-trust precedent so a lot be clear I don't change a lot of lawmakers would have to get onside do you see a better argument to break up Facebook or Google or Amazon or Apple you know which one of those four companies do you think that's the

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case that serves Elizabeth Warren's argument let me let us be clear right this is a position there's no guarantee we finished there but you want to start with a position that says we're gonna do something really dramatic we may be open to finishing somewhere else and this is where I agree with both senator Warren and senator Klobuchar and I think both of these to really understand this issue and you know whether you break them up or not is less important to me then you prevent them from operating in ways that stall the economy which is what we've got going on right now I think you can achieve some of this without breaking them up but the threat of breaking them up is the way you get them to the table to have the conversation that we need to have and I just want to be super clear about something I'm really excited about the strides we've seen in the Trump administration particularly in the Federal Trade Commission and the Antitrust Division...
of the Justice Department in my own conversations with them what I've found is that these are people who understand that there is something really wrong with what's going on in tech right now and that antitrust is the most pro-growth way of dealing with that and they are the antitrust tools in the regulatory toolbox and both of them are doing things right now that are a big big change from what we've seen in antitrust under the Obama administration or before them in the Bush administration so I look at this and I think this is I don't think this is gonna be partisan I think this is a right versus wrong issue not a right versus left issue that's Facebook Google Apple Amazon these are for different companies yes they're all tech companies yes there are some overlapping businesses but do you think any one of these is is more a sort of culprit or a target than another well I think Google is by far the most effective at this right they they had this insight in 2002 that you know when they were trying to improve search they would gather all this data and they discovered they only need about one or two percent of it to improve search so they went looking for what they could do with the other 98% and they discovered that you could use it to predict behavior so then they go in and they do Gmail because they want to find out who these people are and with Gmail they set up so they could machine read all the emails which would tell them what people's behavior...
was gonna be because people would tell you an email and then they want to know where they worse they created Google Maps and then they start things like Street View where they drive up and down the streets taking pictures of everybody's private spaces and then you know they do the satellite version of that and then they do Google glass and now you've got Google home right so you're putting audio into everybody's houses and they're basically taking away all of our privacy where privacy is defined as our ability to make choices without fear and without being exposed by others but they're also taking away our pricing power because they manage our access to information just as they manage the access of anybody who has something to sell they manage their access to consumers and essentially they're centralizing the whole economy in the hands of Google number one then Facebook Amazon Microsoft and Verizon they're the five guys who are at the core of that strategy and let's face it it's a brilliant strategy I just think we need to have a conversation as a country why is it legal for corporations to own and trade our most private data why are they allowed to buy and sell and trade our credit card transaction data which they get from you know Experian and Equifax and TransUnion why are cellular companies allowed to sell our location why are health and wellness apps allowed to sell data that if it were a hospital they wouldn't be able to sell...
why you know are any Internet companies allowed to our transit you know our passage history you know our search history online does Apple stand out to you from the rest because Oh apples not perfect right a lot of what they do in China I object to but what they're doing in this area I think they're fantastic and so the reason why I have mixed feelings and I'm not actually I'm kind of hoping that there's a way for them to avoid the antitrust problem is because I think Apple is trying to be a good guy and they've really succeeded Roger McNamee co-founder of elevation partners and author of sucked coming up Larry page's quest for power we look at how he has fought to make sure he doesn't lose control of Google next and later NASA wants to return astronauts to the moon but it will need the private sector to get there we will discuss the role of startups and the agencies moon to Mars program next this is

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you nearly 21 years ago Oh Larry Page and Sergey Brin founded a small search engine that we all now know as the behemoth Google since then it has become one of the largest public tech companies in the world with a market value of more than eight hundred thirty billion dollars and with any company becoming public comes the threat of founders losing control something a board member described as a quote real concern to Page in fact according to confidential emails and other documents recently unsealed in a court case we know how badly Paige...
wanted to keep his grip on his creation why should I sacrifice and work so hard if I might not be in control that's what Paige allegedly told a former Google director Paul Otellini Lawrence Cunningham professor at George Washington law school and

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texmarq Burgin weighed in in these court documents we don't really have Larry speaking at all there is a deposition from Sergey his co-founder but around this time Larry had just returned pages just returned at CEO so you see at the beginning or at the board brought on Eric Schmidt this is sort of adult supervision he comes back he goes to visit steve jobs that year asked him you know what does it take to be a good CEO he goes read all the books about good good CEO and he's trying to pivot the company in a big direction Sergey meanwhile is going into Google X so this is the beginning of self-driving cars the early days of Google glass we you know we talked to people involved then that had so there was always tension between the two but it's always sort of the healthy tension when the documents

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is at that times it maybe wasn't and then Larry was concerned that either Sergey or Eric would sell their shares perhaps leave the company and then an outside group would have a controlling stake Eric Eric Schmidt so what the founders wanted was the creation of a new class of shares of non-voting shares they already had these Class B shares right with 10 votes per share that Larry Sergey and Eric had and votes...
for regular shareholders shares for regular shareholders that had one vote right right and the initial plan they said I think was December around Christmas they're like we'll get this done in three weeks and the board actually pushed back for over a year and there was this back-and-forth and this lawsuit actually demonstrated there was a much bigger pushback then in what a lot people knew Otellini expressed concern about Paige's threat and the board ultimately created a committee to just to look into whether these shares should be granted Larry what do you make of how Google's board handled this situation I'm impressed by how the board handles this situation pushing back against stockholders who have a controlling stake thanks to the dual class structure isn't is not easy so I was I was impressed that they they they pushed and insisted that Larry explain exactly what it was up to I mean after all if he was merely concerned about ordinary dilution they could just avoid issuing stock they could use cash for acquisitions or they could purchase stock back so they pushed hard on him and he essentially admitted that his main concern seemed to be that if Sergey Brin were to sell his stock then Larry would lose the joint majority control and he Hertz concerned about that and issuing the the see no vote stock would would solve that problem if he could treat his c2 to surgery for the B and can retain control so I think the board uncovered that and did a good job...
now mark the board still decided to start this new class of voting shares why despite this concerns right we saw John doors a good example the legendary VC here in Silicon Valley he's been important over a long time here originally was against a proposal there was one of the deposition that said that he change his mind and part news convinced that is the

best

way to recruit talent right this is a huge concern at Google and has been historically about recruiting the

best

most talented engineers I think a lot keeping Brin and page engaged yeah and then and this is about the time you know they're they're about this this year they make the biggest twelve point five billion dollar acquisition at Motorola Paige has these big plans that that he's come see the fruition right up alphabet of self-driving cars of biotech of healthcare all this stuff that was didn't exist in Google in 2011 and now these much grander in moonshots and and areas and moving in different fields that arguably couldn't have happened if the founders didn't have such tight control the company meantime when you give founders as much power there's always the risk of them perhaps making not great decisions and Larry we've been covering another story out of Google where page himself personally approved a 150 million dollar payout package for Andy Rubin the creator of Android who was accused of sexual harassment and permitted this guy to leave the company quietly and then invested...
in his next company also paid another Google executive omits in Gulf forty five million dollars also accused of sexual misconduct where was the board then well if true both of these examples

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the downside to dual class I mean the the proponents of dual class argue that the founders vision in their long-term outlook warrant that kind of control but here to the extent that the the downside is that you sacrifice some accountability to shareholders if it's true that and I think it's disputed by the company and by the executive who was leaving that the CEO or the founding shareholder is able unilaterally to make that kind of decision that's a downside to dual class and I mean I can't say the board has a lot of a lot of power in a situation like that but it points up some of the negatives and some problems of managerial accountability with it with the dual class stock and you know to the extent that that surgery was just thinking about selling anyway and Larry is sort of faded a little bit into the background running the company it's not so obvious what their vision and their sense of the long term interests of Google and the other stock holders is that that warrants having the disproportionate control

bloomberg

's mark Burgin and George Washington University's Lawrence Cunningham still ahead NASA is a me to put astronauts back on the moon by 2024 how Trump's 2020 budget request supports its lunar mission next this is

Bloomberg

you NASA is...
speeding up its moon exploration president Trump delivered his 2020 budget proposal to Congress Monday requesting 21 billion dollars for the agency to fun NASA's moon to Mars program the effort prioritizes lunar missions as the agency looks to transport humans back to the moon and eventually Mars and the private sector will be an important part of this exploration space angels CEO Chad Anderson joined us to give us his perspective on the space race space angels is a network of angel investors focused exclusively on early-stage commercial space ventures the budgets out and it really emphasizes the moon over everything else I think that the administrator said very clearly that this is a stepping-stone so the moon is seen as a staging area it's a place for us to test out the

technology

that we need to go to Mars and that is still the horizon goal but the moon is much closer it allows us some big winds early on and allows us to develop the

technology

that we'll need to go to Mars eventually is there anything in particular that we will learn from the moon itself though that we don't already know as opposed to deep splay space exploration which arguably you know there's more to know what it allows us to test the

technology

that we're going to use to go to Mars so as investors in this space economy it's really important that NASA is going to be partnering with the private sector in a much bigger way and that was the highlight of of the announcement today...
and so there's a number of companies that are working to put a a lunar gateway in the orbit of the moon that's going to allow us to do a number of different things one is going to help develop the launch sector that's going to go out farther beyond just low-earth orbit it's going to allow us to develop the landing

technology

to go from orbit into the surface and in addition there's a number of companies that are already working on

technology

that's being funded by Clips the commercial lunar payload services program that's two and a half billion dollars over the next 10 years that's funding a number of small and medium sized Landers that are going to go directly to the lunar surface so what this allows us to do is really test out the landing

technology

and the

technology

that we need to sustain a presence around another planetary body and in addition the moon acts as a fantastic launch point to go out into deeper space missions there's no the gravity environment on the moon is much less and so to be able to launch from the moon to deeper space as much easier now we haven't focused on SpaceX which is working towards getting a human into space for the first time since since NASA paused the space program but what are these other smaller companies that are playing a critical role here that we need to know about yeah so there was 300 million set aside for the larger human Landers that's the type of thing that SpaceX and Jeff Bezos is Blue...
Origin are developing these larger loungers take the humans but to get started this this two and two-and-a-half billion that I mentioned earlier for the Klipsch program that's going to two smaller companies as well so Astrobotic which is

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ing on your screen is is a company that is privately funded has been working with NASA and developing a relationship over a number of years and is a key player in this klipse program that's going to allow them to allow NASA to deliver payloads to the moon for the first time in a very long time and what this is going to be is is to test the capability but also to lay the initial infrastructure that's going to allow for a habitat on the surface of the Moon which looks very similar to let's say the space station that it you know as it is today with a rotating crew of people that are there on a sustained basis and we have a continuous human presence there space angels CEO Chad Anderson there and that does it for this edition of the

best

of

Bloomberg

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