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tv   Bloomberg Technology  Bloomberg  March 1, 2017 12:00am-1:01am EST

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>> it is one of european hong kong. i'm shery ahn with update of the top stories. president trump sounded a more optimistic tone in his address to congress, urging americans to unite and abandon internal can't wait. onrelated campaign slogans security and immigration, but offered little on funding the repeal of obamacare. china's human resources minister 500 thousand steel and coal workers will be laid off this year. gaugeame as the back to has rebounded. pmi came in at 51.6, ahead of estimates.
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be talkingsaid to its memory chip business, valley that $13 billion. it would be willing to sell the entire unit. toshiba only wanted to sell a minority stake but has to give up control because of losses in the u.s. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you are watching bloomberg. trading just getting underway in hong kong and china. the want to watch as the japanese yen as it continues to lose ground. ♪ >> i'm selina wang. this is "bloomberg technology." coming up, amazon breaks the
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internet. how a problem in the crowd trigger the error message sweeping across the east coast. plus, the final countdown to the snap ipo with just 24 hours to share pricing. we highlight the biggest investor concerns. and, getting his close-up. it's not a good look. how the uber ceo was caught on tape in a video had in that handed over to bloomberg. first, a massive internet destruction hit the east coast of the u.s. with amazon web service to blame. repair the data storage system used by nearly 150,000 websites. joining us on the phone from seattle, bloomberg news reporters. brad stone, who is my cohost of the hour. spencer, i want to start with you. what is the latest on the
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development? what caused this and where the servers down? >> we don't know what caused it. we know it affected thousands of sites using this storage. and can be used to house data and manage web applications and host software that customers download from the internet. amazon has been posting updates on its site, which seems kind of reassuring, but the language is a little -- can be interpreted in many ways. they believe they have a handle on the real cause. it's a lot like talking to mechanic when he 16 your car. that's the latest. they are working on it trying to fix it. they are working and keep trying to post updates. >> awf is mission-critical for so many organizations. the cia pays amazon hundreds of millions of dollars a year.
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does anybody use a day like today to reconsider that investment? >> no, i think today is understanding what the durability in the system is and there are ways to mitigate it and be multi-sourced. i think the shift to crowd and amazon is pretty inevitable, so the move continues, but it's about figuring out how to become more robust. selina: what do we know about what types of customers were harmed? how damaging is this? >> from the bit i read, it looks like it took out a wide swath of customers from all sectors. >> over the years this has happened to amazon periodically. maybe once a year something like this does happen. does this affect amazon competitors? have we seen microsoft or google's cloud go down with that kind of regularity? >> i don't know the actual stats. i don't know if there's anyone who seems more robust than the others, it's just the best pricing and features. amazon is clearly starting to win the business. i don't think many people will
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change their point of view. selina: this underscores just how important amazon is to the now internet society. pretty amazing that some kind of glitch would cause such a widespread problem. what kind of repercussions is amazon going to face for having this problem? they need to be held to a very high standard. >> they will have some explaining to do to their customers and more reassurances to make, but you are right. some of the companies affected include an online expense report tool, an online project management tool, and even like an automated email alert sent by a commuter rail system in chicago was affected by this.
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it was very sweeping ramifications of whatever internal problem they are having, creating a lot of havoc with their customers. >> spencer, everyone today is checking the aws health dashboard. they posted this recent update. s3 objects retrieval and deletion -- as our amazon interpreter, what do they mean? do they have to speak more frankly? >> that's it right there. i'm sure that means something to someone somewhere. i think their public relations department and email must run on s3, because they have been radio silent today. it has been difficult to
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interpret this. if you read the statements carefully, there's no real clear answer on when will be fully resolved. selina: thank you for the updates. we will be coming back for further developments on this. now to barcelona, where the annual global world conference is underway. it is not just tech leaders in attendance. regulators are there, including the federal communications new chairman. bloomberg's caroline hyde caught up with him and began by asking for an update on the at&t time warner deal. >> limited to these particular effects, the parties that structure the transactions are the ones that came before us. that's the reason i said what i said yesterday. reporter: give us what market life there actually is. the market is expecting it. are we going to see more and na 2017? >> this is a decision for the
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private sector to make. my job is a humble one, to review the papers before me and look at the facts presented. reporter: we spoke with tom wheeler, your predecessor at the fcc. he said that they needed four players for a competitive market. i wonder whether three will be enough. >> i can't say in the abstract what the market structure is. what i do know is that the current wireless structure is extremely competitive. after the fcc started and stopped, every single carrier announced unlimited data plans. that's good news for consumers. our focus is always going to be what is in the public interest. if it is in the public interest, we would be more favorably inclined to approve a deal. reporter: if you see a combination with sprint, with that allow? >> i can't say in the absence of any particular papers.
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reporter: there's already a move to roll back some of the privacy rules, being where customers have to opt in to certain internet service providers to use data. the question is, is this going bigger or are we going to completely roll back now neutrality? >> that decision simply meant putting a pause on one of the rules that was going to come to affect on march 2. more broadly speaking, there's a consensus for the need for a free and open internet. that is since the dawn of the internet age. that is something consumers and companies alike take for granted. the only western is what regulatory framework can we add up to protect the value and provides incentive to provide infrastructure across the u.s.? selina: that was bloomberg's
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caroline hyde with the fcc chairman. snape is supposed to be one of the most successful ipos in years, when it prices after the market closes tomorrow. but the unique share class structure could spell trouble for the snapchat maker down the line. we dig into why, next. this is bloomberg. ♪
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selina: soundcloud is undercutting rivals spotted by and apple music with a cheaper monthly music subscription service. the $4.99 subscription is half the cost of soundcloud's premium service and includes access to
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an hundred million songs. the move is aimed at boosting revenue after the company warned in january that it may run out of money without more paying customers. music industry executive seiji their service will draw in price-sensitive subscribers and help them compete with youtube and free services. snap is poised to price shares with its ipo after shares on wednesday. it will be the biggest social media listing since twitter went public more than three years ago. snap has a unique shareholder structure that may raise questions for investors in the long run. alex barinka has more. reporter: snap has most of the ingredients for a successful ipo. a junior social media app, failed growth, and investors who have not had opportunities to buy into new tech stock. but a blockbuster ipo has not guaranteed a great public stock. there's a growing risk between
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short-term excitement and long-term concerns about snap. the company will need to prove itself past listing day. it is still losing money, and user growth has recently slowed. is there a sign it will not be the next thing? the unique structure can mean the stock is in for a bumpy ride. we have seen stocks with great ipos go sour. twitter, took about a year and a half to lose expectations. revenue growth stalled and profits were nowhere in sight. then there was zynga, the one-time darling of the gaming industry that failed to come up with new hits. in snap's case, if investors lose hope, the stock could fall faster and further than its. investors have no voting power, no ability to nominate directors, and executive pay. if they are unhappy, the only recourse is selling. if snap can read up user growth and increase profitability, shareholders can enjoy returns the likes of netflix or facebook. selina: let's get more on the snap ipo and rudder tech ipo landscape. joining us from new york is alex barinka.
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great package. you outlined a lot of investor concerns. if you look at the current numbers, snap's price sales ratio is almost double facebook. on top of that they don't have profitability, it is a new business model, and investors have no voting power. don't you think this is a little too lofty? reporter: this is one of the things that investors are talking about. but when i think about this, i'm starting to think about it in two separate groups. you have people who will want to buy into this deal because they want to get into the stock and ride what is typical in the share price immediately after the ipo. they will probably be a little
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less valuation sensitive than the long-term investors, which is the other group of people who would consider this deal. for them, you look at the high-end, about 19.7 times forward revenue for the next 12 months. that is double facebook, and more than what facebook went public at and around 19.4. twitter went public at 13 times forward revenue. longer-term holders were saying, "i'm buying this at the ipo price, and i think i will have it for a while," they will be the ones who will be probably considering whether or not the actual fundamentals of this business and growth opportunities justify the valuation of as much as $18.5 billion market value. >> specifically, are the lack of voting rights giving any investors pause? reporter: not for the ipo. i spoke to one of the partners and general council at value. he said it would not cause investors to boycott the deal initially, but going forward, if this stock go sideways, investors have no recourse great if they buy something investors
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don't like, they will not be voting on that acquisition. they can't nominate new directors. no say on pay if they think the ceo and friends are getting paid too much for not doing enough. you have to think about it directionally. if the stock is going up and to the right, folks are not going to complain. if this goes sour, because there's less of a say with the voter, they are probably just going to exit, which could inject a little more volatility if there are negative wheeling and dealing going on. selina: i quickly want to touch on the product. how can they prove it is not just a one hit case among one demographic? how can it avoid the twitter conundrum and show they can expand the offering? reporter: when i spoke to people who are bearish on the stock, that is the problem.
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you have the snapchat app here. on the roadshow, the management team has not given a lot as to what comes next. when you think about the different phases of the company, right now they are still kind of in monetization mode. they are still trying to make money. revenue is a new thing for them. they've only been making serious money for the last two years. next will come profitability. that's the concern that it might be a one-hit wonder. executives will tell you they have been able to capture the millennial audience. we are doing well in stealing and dollars for advertisers. that is the trend you will have to bet on that they can come up with what's next, outside of spectacles, which hasn't really sold or made a big impact.
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>> facebook had a rocky couple of months after its ipo. twitter has had a rocky ride. what can social media companies learn from the trajectories of those predecessors? >> so much of the learnings i found from the twitter piece is the framing. twitter is anchored around news, and that's a big opportunity. the benefit around the political cycle doesn't seem to accrue in the business value. they need to think about consumer oriented. selina: alex barinka, thank you as always. ryan is staying with brad and myself. coming up, what the future will look like in an increasingly automated world. we discussed, next. this is bloomberg. ♪
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selina: u.s. president trump is preparing to give his first
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address to a joint session of congress. he's under increasing pressure to answer core questions about how he will deliver on his key promises, including the pledged to bring back manufacturing jobs to the usa. here to discuss automation and energy is brian farber, partner at what point ventures. trump has spoken on twitter about ringing manufacturing jobs to the u.s., but he has not given a single tweet about automation and saving costs, and potentially also cutting jobs. what is your take on that? what is the future of working looking like? >> we talked a lot about ai and machine learning making big progress. you are seeing robotics and ai make a big impact. one study said 13% of the jobs lost was to trade, the rest to automation. i am concerned about the future of what that means for workers,
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but also a lot of -- to put american workers back to work. >> is there a risk of the possibility of hastening the advancement are automation? companies will naturally try to cut costs. >> 100%. you are hearing a lot of ceos committing and investing in automation, and in the u.s. the cost structure will force more automation. selina: there's even further pressure coming from proposals that will put a tax import, even more pressure to make goods at
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home. these think this is going to create more jobs are less overall in the u.s.? >> 1.7 million truckers, 3.4 million retail jobs in the u.s., amazon go, all those guys are going after this hard. you will see more and more automation hit the really big sectors of some of the largest employers in the u.s. >> what opportunities? >> technology has always had the promise to be a will to connect people in different geographies. technology can connect people in different coasts to the rest of the u.s. we are looking a lot at what the opportunity around technology is to put people back to work that have skills, but not in the area they live. selina: kind of related, flex, a company you are interested in. they call themselves the airbnb of warehouse logistics. can you tell me more about this company and how it might fit
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into this overall landscape of changing retail and logistics? >> amazon is creating a tectonic shift, pushing everyone to be very consumer focused. all of the retailers and shippers and logistics groups i think he about how to be more agile. flex is a solution to be a will to be more ad have more distribution solutions. we think it's part of a broader trend just like airbnb and amazon, major shifts pushing people to rethink business. >> when you invest in these companies spurring automation, perhaps leading to the loss of jobs, we are in this unique climate. do you worry about the optics of that and the president might make one of your companies a target? >> let me try to focus on is where there is displacement of jobs, it creates new jobs. the analogy of the dishwasher was created. how long that --
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>> you are optimistic the economy can recover and create new opportunities? >> that is the hope. >> have we seen evidence? >> that they great example. newton technologies, there were new opportunities?
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here in hongm. kong. i have an update of the top stories. a morent trump sounded optimistic tone in his address to congress, urging congress to unite did. little detail on tax reform, banking, regulation, and funding the repeal of obamacare. toi will be asking congress approve legislation that produces a $1 trillion investment in infrastructure of the united states, financed through public and private capital creating millions of new jobs. >> the new u.s. congress
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enforcement of trade rules with china and other nature -- other nations. they said there is no point in making trade deals if they are not enforced. they will be renegotiating nafta and leveling the playing field with china. federal officials are signaling a greater willingness for a rate increase. the case for tightening has become a lot more compelling now while san francisco's john williams says he expects the hike to receive serious consideration at the mid-march meeting. in the caserested of the murder of kim jong-nam. he was attacked with a non--- with a nerve agent. the women face the death penalty. global news 24 hours a day powered by more than 2600 journalists and analysts in more
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than 120 countries, you are watching bloomberg. is julia. the trump speech widely anticipated. not many details. we did see a little bit of a dip in the dollar-yen relationship. we are seeing the nikkei leading these gains in the asia pac region in late trade. singapore doing incredibly well. aboutn the expectations concerns of trade wars. singapore a major x port partner. we had some major pmi running out of china. macau is gaining revenue, the hang seng index going up for the third session in five. the casino players are certainly
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a little more conviction coming through. this is bloomberg. ♪ selina: this is "bloomberg technology." i'm selina wang. amazon web services says it has resolved the data storage issue. the outage appeared to have started around 1230 eastern time. the storage data system is used by nearly 150,000 websites. that's another development out of uber, which has been facing battles on many fronts. senior vice president of engineering resigned after the ride hailing company learned of a sexual harassment allegation from his reviews job at google. he denied the allegations. plus, a new cam video shows the ceo writing in uber, talking
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about the company's culture, as well as getting into an argument with the driver. brad, let's start with you. what exactly did this video review, and why is it important? >> it is an unscripted moment. uber's corporate culture has been in the news after there was a scathing blog post about her experience at the company. then we received basically a -- cam video from a longtime uber diver who is unhappy about the direction pay is going. he sent that to us. have a listen. in this conversation that takes place super bowl sunday, travis is talking to friends about the
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culture at uber and how the company is doing. have a listen. >> ryan, you have had to counsel many a ceo and founder through unflattering moments. what do you tell them when they are in the vortex of bad news? >> any crisis that have been that is how do you try and get to the root of what's going on and know that most of the infrastructure and the company is there to hold the information away from you. you have to be actively and aggressively looking for the truth and figure out how to solve it quickly. >> we thought a lot about whether to break this story, but it seemed to me that travis' personality is central to these questions. this is a company who changed how cities work. he's not only talking about the culture of uber, but showing a little bit of his pet graciousness.
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have a listen to the second clip where the driver tried to -- challenges travis on the issues of driver pay. he responds somewhat forcefully. >> you know what? some people don't like to take responsibility. they blame everything -- >> but why -- >> good luck. selina: that was some pretty surprising stuff. what do you think this really reflects in terms of uber's culture? is there a trickle down effect? when you have a ceo who says how -- says rather pugnacious things, what does that say for the overall company? >> this is why they have been successful. travis doesn't suffer fools. he has bowled over every regulatory and competitive challenge in his way. that thing is, he has to deal with being a politician now. here's an example of him not putting his best foot forward. ryan, i'm curious to hear what you think. you are friends with some of these people on the uber management team. do these ceos and founders have a responsibility to be a little less pugnacious and more politically astute?
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>> i think there's a point where you are fighting as an outsider for a long time, and suddenly you are someone everyone looks to. they are going through that transition now. watching this, i'm curious to see -- you get this dropped on your doorstep. how do you think about the process of assessing the and deciding whether to publish it or not? >> uber is a utility now. it has changed the way we cities operate. travis his personality and uber's culture is in the news right now. it seemed we didn't have a choice. it is very topical. it is an unscripted glimpse around the man and the company. selina: a fascinating and ever developing story. we will see you after the break. coming up, youtube is taking on
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traditional cable companies. our conversation with youtube ceo about their newly announced tv service, next. ♪
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selina: salesforce reported the fourth quarter results after the bell. out although the company beat estimates, he gave a weaker forecast. salesforce forecasts the revenue in the current period will be $2.34 billion. now youtube is going prime time. they announced a new service today called youtube tv that will deliver an assortment of major tv channels to paying customers for $35 a month, starting in the spring. lucas shaw spoke to susan
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wojcicki earlier, who is ceo of youtube. he started by asking about the details of the new service. ms. wojcicki: on youtube, we have a nod of demand for tv content. we think it's a great opportunity with mobile phones, because everyone is carrying a tv around in their pocket, but they are not using it for tv. we saw this giant opportunity about all this amazing tv content, and making it available to a generation that loves content, but they want content on demand, they want to watch it on any device, they want to not have the commitments currently required for tv. we just saw a big opportunity to bring the old tv experience to the audience. reporter: with all these networks, neither are owned by
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companies that in the past, youtube has had a tortured relationship fighting over copyrights. you have to make assurances about those topics? ms. wojcicki: we actually work with all of the large broadcasters and networks to bring that content onto youtube now. we have clips, we have shows, so we have had a good relationship with them. we have seen the opportunities to see youtube as a mechanism to get more promotion for their shows. this is really just taking it to the next level. reporter: you experimented already. most people think of youtube as this big free place to get videos. you experience rented with paid. what have you found out about the youtube appetite for paying, and what is the future of youtube red with this other full tv service? ms. wojcicki: we think there's an opportunity for users to be able to have a subscription service, and the free ad supported model is a wonderful model. we are investing in that. we see an opportunity with tv content to be able to offer that
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to our users for the $35 a month. that's the opportunity to expand to a new kind of content and make it available to users. reporter: do you think this can help boost users and increase chances of generating serious? does it help with advertising revenues? ms. wojcicki: we see an opportunity to be able to offer tv content to our users in a way that they are used to consuming content. if you look at this generation, the court never, or the cord cutters, they expected to be on demand. we wanted to connect this generation with the way they are used to. reporter: you have broadcast network, you don't have some of
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the big cable networks from turner or discovery or viacom. is that something that will change? ms. wojcicki: it's a new service, and it will change, but we are happy with what we have right now and i think we offer a great that of content available for a low price of $35 per six accounts. reporter: what is a differentiator between this and some of the other live services like hulu, or directv or sling. ms. wojcicki: we hope this is just a great experience. when the user uses it, everything works seamlessly across devices, that we have an unlimited cloud dvr storage, you can quickly and easily save everything, that you have no commitments when you sign-up, and that you have great search. these are all things that we as a technology company have spent years developing, and now we are excited to bring this to tv. reporter: where does the normal
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youtube creator live within these services? is it part of it or is this part of the regular cable network? ms. wojcicki: we will have some youtube content as part of the service. we will also have trending on youtube available. we are excited to bring those parts of youtube to the service. of course, the original content youtube is creating as part of youtube red will be available. reporter: available for the $35 monthly price, or will you have to be a youtube red subscriber? ms. wojcicki: youtube red originals will be included in the $35 price. reporter: one thing you have stressed in this service and a
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lot of new life services, you have highlights on youtube but you don't have live sports. do you see yourself bidding for sporting sites in addition to what is available on youtube? ms. wojcicki: the goal of this product is to be able to offer tv content and have a great experience, which includes a lot of live sports. via partnerships with all of our broadcasters and networks, we have a comprehensive sports offering for users with this product. selina: that was youtube ceo susan wojcicki speaking with bloomberg lucas shaw. let's go back to our guest, ryan farber at that point ventures, who's an investor in both netflix and tivo. he gave the classic answer that what makes them different is they have a great user experience.
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but do you think they will get millennials to buy into this subscription on top of netflix, hulu, hbo? >> they can matter, but they already have the audience watching youtube creators every day, millions of hours. we will see if this is an add-on package. millennial have shifted away from traditional media and shows people care about. we will be interested to see if this actually matters. >> if you are sitting in the offices of comcast or directv, does it feel like the news is tightening? is this another step toward the great unbundling? >> potentially. they are trying to invest in their own content. there's a crazy battle going on. selina: susan mentioned they don't offer everything, because they don't want to have to pay high licensing fees. what are they not? offering? >> it seemed like they don't have the kind of cable only networks like bravo, perhaps news networks, and of course, sports.
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that's a big omission. we are talking about millennial unbundling, going to youtube or hulu. do they care about that? is that enough to keep him tethered to cable or satellite? >> i moved houses, i tried to unplug, and i went back to just sports. for me, it matters. >> you do have to wonder if youtube is spending the money to do this and probably losing money. to what extent are they next in line to going to bid for one of those nights of nfl coverage? we heard this week that facebook was talking about streaming a game. we are moving into this world where maybe those that are left out of these bundles, that category is beginning to shrink. >> have been reporting over the years that google has not gotten nfl right. but nfl viewership is down. they have to take that into account.
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selina: speaking of the other companies, there's apple, amazon, google. what is their competitive edge that their search capability and ai will make this more personalized? >> i think it matters little, but not as much as original content. netflix originals, amazon just won two oscars. everyone is interested in original content because that is what draws people to their high form. >> if you are netflix, do you worry about this? do you feel like you need a skinny bundle to keep up with youtube and hulu, perhaps amazon? >> i think different offerings. some people have two or three different packages. if i was netflix, i wouldn't be too worried, but watching. selina: look out for a future youtube oscar. that wraps it up for today. read point ventures ryan farber, -- sarver, thank you for joining us, and our tech editor brad stone.
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coming up, google dominating the market. we go to barcelona to get the latest from the global conference. this is bloomberg. ♪
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>> microsoft has announced a subscription service to allow customers to play online and avoid a trip to the store. google is sharing its virtual assistant featured with android partners, which plays music and complete tasks, now expanded to phones.
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what exactly is behind expansion strategy? down withyde sat product lead for google assistance. >> it is one product you can get to, but in different places. it doesn't matter where you are using it on, it is the same assistant. you get the same level of functionality. that is a powerful concept. you can go through the day and move through different situations and still have the power of google anywhere you want. reporter: the news here is that it is now available on android platforms. i can get google maps on my android phone. could i get it on apple eventually? >> i will talk about what led us to this moment. since last fall, we have been getting to more places. we want to be able to access the system as easy as possible.
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it's coming to your car, to your tv. earlier this month we introduced it to android 2.0. this is a natural progression. we really wanted to be on every device possible. reporter: does the assistant eventually replace search? >> the way i think about it is the assistant is a conversational interface to help get things done. now you have a way that is a natural way to talk to technology. think of it as instead of learning how to use technology, we want to adopt technology so it learns how we talk. that means the assistant can do all kinds of things. that includes interacting with search, but up, also do local
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searches, it can turn the lights on in your home, said the kitchen timer, play music. it is a lot of different services. of course search is one of the , core services in terms of asking questions. >> what about issues that have had a light shone on them? >> privacy is clearly very important. we want to make sure it is clear to use and how data is being handled. for me, it's a lot about control. we have a place called my activity, so you can see all interactions. you can delete things if you want to. it is under your control. it is important we are building a relationship of trust. we are constantly making sure the assistant is taking care of everything. we also want to provide value customers expect. those go hand-in-hand. a solid product, and solid concept. reporter: and the issue that
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someone is listening, how are you tackling that? >> first of all, it isn't. it only triggers when you say the words. you have to say the words. in addition on google home, lights show up. you can talk to it. there is a my -- a microphone on the back. if anything goes in, you can go to the activity and delete anything you don't want to be in there. selina: now that was the product lead of google assistant. that does it for this edition of "bloomberg technology." caroline hyde will be back on wednesday just in time for the much-anticipated snap ipo. this is bloomberg. ♪
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anna: trump, long rhetoric, short on detail. president trump urged americans to abandon internal conflict and help rebuild the country. president trump: i will be asking congress to approve legislation that produces a $1 trillion investment in infrastructure of the united states. >> a hike is on the table. of officials speak willingness to tighten monetary policy as soon as this month. firm footing in february. producer prices

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