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tv   Best of Bloomberg Technology  Bloomberg  October 13, 2019 7:00am-8:01am EDT

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taylor: i'm taylor riggs. this is "the best of bloomberg technology." we bring you all of our top interviews from this week in tech. coming up, high-level negotiations between washington and beijing begin again this week. we dig into the issues of intellectual property and u.s. companies that do business with china. plus, zuckerberg to testify. the facebook ceo will appear
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before lawmakers this month on the social network's controversial cryptocurrency. we have details. and whistleblower speaks. center he people at the of the cambridge analytica scandal oins me. high-level trade talks picked up this week in washington after tapering off in july with no clear breakthroughs. china's vice premier was greeted by treasury secretary steven mnuchin and trade representative robert lighthizer before talks resumed thursday. the stakes were extremely high as president donald trump threatened to raise tariffs on $215 billion worth of chinese goods on october 15 if there was no progress.
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the technology sector paying close attention to those sessions as intellectual property is playing a prominent role in the negotiations. i spoke to someone from a firm who helps u.s. firms protect intellectual property. eric: a fairly large company in china, just saw $100 million in evenue that files and protects intellectual property for clients that have previously mostly been in china and is now expanding into the u.s. that's what we are doing here based out of boston. taylor: what kind of ip theft language do you need to see to get a deal? eric: regardless of the status of the trade talks, the importance of securing ip protection for u.s. companies that are operating in china should not get lost
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anywhere. u.s. companies should not be missing out on that opportunity if there going to work in the chinese market. many things are manufactured in china and they are in that market already. taylor: who is stealing whose ip? eric: good question. there's a fair amount of confusion when we talk about ip theft. it really needs to be defined a bit better. we hear that routinely and the question is, what are we talking about specifically? we don't hear a lot of specific examples that are at all recent. i think most people think of ip theft as counterfeit goods and that is a very real problem that exists in china and it is a problem for any manufacturer
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outside of china. where we tend to be thinking about ip is in the patent world, where you are disclosing, when you get a patent, getting the protection not only in the u.s. but in china, where china is fairly open to protecting their markets for anyone operating inside china, by filing and protecting it with patents. taylor: do you trust the protections in beijing given the relationship between the u.s. and china not being the best right now? eric: if we just abstract ourselves from the battle and put that aside for a moment, when you get a patent in the united states, you are telling the world how to practice your invention in exchange for the rights to do that. you have the right to exclude others, but only in the united states and you have made your invention public and anyone from anywhere in the world can look at the u.s., look at your patent, see how to practice it and go ahead and do it. if you're not protecting it in
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the country were someone is doing it, you don't have any protection. it is largely a situation where you want to file for protection in china if you're going to be filing for protection at all. it is almost crazy not to be doing that if you're going to be operating anywhere in the world besides the united states. taylor: that was eric giler. as for companies affected by the ongoing trade war, one company manufactures a significant portion of its product in china. it added to his lineup of tracking devices that helps customers keep track of keys and other things viewed the company may be considering future manufacturing hubs outside of china.
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>> because we manufacture products and do a lot of that in china, the trade wars and policies there are impacting us. we are subject to tariffs, they went in effect on september 1. we support the policy, but one of the challenging things for companies like ours is we did not have a lot of notice that tariffs were going into place. i think we had four weeks notice. while we support the policy when you think about building product leading up to the holiday, we didn't have a chance to react. taylor: there needs to be a less tacit he of the supply chain, you need to have two quarters. what is your leeway? what is your legroom? >> it does take time to shift a supply chain. if you think of a businesslike tile, we started in the u.s. and now we are global. we are selling in well over 40
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countries, our community has expands across the world. when you have complexity like that, 40,000 retail, growing like crazy in japan, last quarter we sell 106% growth. you need a supply chain that meets the needs of retail customers, distribution customers, and we have a big direct business as well, so selling to the direct customers. there is a lot of complexity. so making moves takes time. taylor: have you started moving manufacturing in those places? cj: we are basically viewing this as an opportunity. as i said, we support the policy, so now we are taking a chance to reshape our supply chain in a way that serves our customers best. both, again, direct customers nd retail customers. taylor: you are talking about a new hardware lunch which is great, and there is a software component as well. you were here a year ago and you said sometimes you don't need the hardware because the
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software is bluetooth enabled and in connected devices like google home and amazon's alexa. how is that interaction between hardware and software? cj: it is a great question. a few things that are not super well-known about tile, one is we have a community platform. it's basically the largest lost and found network in the world and if you leave your tiled item at a starbucks, a train, it gets found by the community. we have an app mesh network of users helping you locate your things. the second thing is our big focus is around embedding the tile capability into third-party projects. we have announced about six or seven different audio headset partners and we have launched products with companies like bose and skullcandy. we are looking at big verticals like laptops and cameras and wearables. and anything with a bluetooth device, and there are 30 billion of those shipping in the next five years, can be a tile with a software update. taylor: how do you respond to some reports that apple could be
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coming out with a competitor product? do you see apple as a colleague or competitor? what do you do if that's the case? cj: apple has been a great partner for tile. the way we think about the rumors around the competitive product is that it is really validation. we have been building this category for six years and it basically illustrates this is a real pain point. of those 30 billion devices shipping with bluetooth, only about 4% are apple devices. it's a big opportunity for the rest of the market. taylor: that was the tile ceo. protests in hong kong ticked off again this week following months of demonstrations demanding universal suffrage and the right to choose hong kong's leadership. the level of violence has grown in recent weeks and police have responded with mostly tear gas and batons. apple joins other foreign companies struggling to navigate the pro-democracy movement.
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apple pulled a popular app from the app store that shows police activity in hong kong and was said to be used by protesters for demonstrations. bloomberg's selina wang filled us in from beijing. selena: so this is a crowdsourcing app that allows users to see were protests and police activity is happening. apple is reversing course again after saying it spoke to local authorities that said it was threatening public and police safety. the app creators have said there is no evidence of this and critics have scorched the company for saying it is basically capitulating to china's demands at the expense of free speech, but to be clear, this is not the first time apple has made a move like this. a few years ago, they removed vpn apps on the app store in
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china, more recently it removed a taiwan flag emoji app. greater china is apple's largest market after the u.s. so there is a lot at stake for the company. and it just underscores the increasing challenges when it comes to balancing political risks at home and abroad for international companies operating in china. taylor: and within that balance you talk about, was this really harming police or is it seen as caving to beijing? selina: we did hear from me hong kong legislator say he was deeply disappointed in this decision and that in his view, this is actually hurting individual, innocent passersbys who would use the app to avoid violence. there is no evidence of the app being used to threaten public safety, but apple says it did in investigation showing it was used to potentially target individual police and individuals in areas where police are not around. i think the broader significance of this also points to what we have seen happen other companies caught in the fray, not just apple.
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you have seen companies from vans, starbucks, zara, blizzard having toe a delicate line and get scorched when it comes to taking a side, either side when it comes to the hong kong protests. i think this is a significant example. a single tweet has threatened the entire business of a company that in china, has spent decades building its business there. they have more than 800 million fans. with a single tweet seeming to be sympathetic to the hong kong protests, you have firms, the state broadcaster refusing to broadcast their games, all distancing themselves and cutting ties to this company. we have seen beijing take a very hard line, zero-tolerance policy approach when it comes to companies seeming to meddle in what they say are internal affairs. taylor: that was bloomberg's selina wang from beijing. ♪ taylor: and coming up, mark zuckerberg summoned back to
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washington for another out of hearings on the libra cryptocurrency this month. we will have details. and if you like bloomberg news, check us out on the radio. you can listen on the bloomberg app,, and in the u.s. on sirius xm. this is bloomberg. ♪
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♪ taylor: mark zuckerberg will get a firsthand look at the growing opposition to facebook's plan to create a cryptocurrency. we learned this week the social network ceo will testify before the house financial services committee october 23. the hearing will examine facebook's impact on the financial services and housing industries. for more, i spoke with bloomberg technology's kurt wagner. kurt: anytime the ceo testifies it is a big deal, but mark zuckerberg is a huge deal. i was there when he last testified and it was a total zoo. it was just everyone wants to see mark and ask him questions, and i imagine this will be the same. i know they had been trying to get sheryl sandberg, they were talking to her, we wrote about
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that a couple of weeks ago. it looks like they got someone even better in theory, her boss. taylor: what do we know about the content of the hearing? kurt: we know the committee focuses on financial services, so libra, the cryptocurrency facebook is spearheading, will probably be a large portion of it. they also do housing stuff. you mentioned housing in the intro. facebook has been accused of issues around its advertising business where people are discriminating or being discriminated against, i'm sorry, for housing related issues. and so i imagine that will come up as well, but the thing about these hearings i have learned, once you get executives in front of these committee, pretty much everything goes. so with mark zuckerberg in particular being there, i imagine we will hear questions that spanned the gamut. taylor: i think i've asked you this before and i continue to be perplexed, did facebook realize the amount of opposition would be coming their way about cryptocurrency? kurt: it's hard to imagine they would have foreseen this level of pushback. because if they had, i think
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they would've done more work before announcing the currency. that being said, it is a tough chicken and egg situation. if they had gone out and started having these conversations with politicians, it would have leaked, people would say, what is facebook doing? do they even have a plan? so they took the other approach and announce the plan and now they are having conversations and everyone is freaking out. i feel like it was lose-lose for them, but at the same time, did they anticipate mark zuckerberg would be testifying before congress four months after this was announced? i have a hard time thinking that was the case. taylor: facebook skeptics now have derivatives to bet on whether libra will meet its target launch date. a crypto futures exchange is offering derivatives that pay out based on the likelihood libra will be operational by the end of 2020. the initial price equates to a 0% chance --
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they in that timeline. the coinflex ceo spoke to bloomberg on monday. mark: we are excited about this futures contract because it gets the market to price the odds of the event occurring. it is obviously physically delivered libra, and in nondelivery by facebook, it settles at zero and gives the market away to say, well, this is likely, it is unlikely, respond to news events, and give clarity to facebook and libra partners in this project. >> why so bearish and so pessimistic? why only a 30% chance of hitting the december 2020 date, already a day later than libra planned? mark: were going to let the market decide this one. that is the opening price, but from there on after, it is just determined by anyone who wants to make a market. >> is this garnering a lot of attention for you? are you going to get high-volume when these contracts open?
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mark: no, we don't actually xpect very high volumes from these contracts. we do, however, expect them to be something people are fascinated by trading, something that ends up trading a lot in terms of number of users. and ultimately it brings interest in the exchange and provides a signal to the market of where libra actually will end up being. >> we have a pretty active betting market in this country. why is it better to use your product than walk into a betting office and say i would like to put a bet on this particular outcome for this libra product? they specialize in making markets in all kinds of seeming off-the-wall stuff. why do you need this product? mark: sure. coinflex is a physically delivered futures exchange. our main products are futures on bitcoin physically delivered. and if you want a physically delivered libra at the time of expiry, this is the place for you. if you want to make a sports bet or something like that, if libra
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gets traded on those platforms, then the is a great place to do that, but we are trying to offer futures on libra and that is basically what people come to us for. taylor: that was coinflex ceo mark lamb. coming up, he saw a struggling nasdaq and turned it around. we hear from a former chairman and ceo of the change and about how he did it. that is next. later, whistleblower is the word of the day in washington. but before then, there was cambridge analytica. we speak to christopher wiley. on why he spilled the secrets of the data mining property. this is bloomberg. ♪
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taylor: when bob greifeld took
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the reins of nasdaq in 2003, he knew he had his work cut out for him, as did the board. he got off to a running start and made key personnel changes, trimmed costs, and landed big deals. in the process, he made nasdaq into a very different institution. thursday, he spoke to david westin about his new book, market mover." lestons from a deck a id of change at nasdaq. bob: the most important move we made was to buy inet, we got the best technology on the street. a lot of the high-frequency firms use some version of inet today. we gained market share. hen i think about the 47 acquisitions we did, the only one we had to do independent the price was inet, we were institutional risk. we were losing market share and money every day and we didn't have any technology on the shelf that had proven great faith.
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the rest of the acquisitions were optional and we were using that to build upon further trength. david: then 2008 happened. stress on everybody, including you to clear the trades coming through. but there were reforms afterward and in your book, you said that jamie dimon called you up and not a friendly way. bob: there were some four letter words there, but i would say our systems worked well through the great credit crisis. we were hitting volumes we only saw in the lab, that was nerve-racking. we bent but did not break. there was a professional disagreement in terms of how things would play out. one thing i have to say with jamie dimon, we lived through difficult times with facebook, and to his credit, he gave me a call and said, bob, you will get through it and it will work out. i appreciate that. david: the facebook problem was
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pretty well known and treated directly in the book. bob: it is a really big oop. i came there and we had a certain culture. we changed it, and we made thee engineers the kings of the ship. the organization was not balanced. i created a culture where the engineers could over develop systems without any check from the people running the businesses. we had to evolve, we learned from it and became a more balanced organization and a better organization. david: right now, there is a big dispute, discussion going on about ipo's, which are terribly important to nasdaq, as well as direct listing. but nasdaq, as i understand it, had both expenses, didn't you start with a direct listing before you got there? bob: we did it when i was there. david: so what are the pluses and minuses of direct listing versus ipo? bob: the direct listing will have a niche.
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it is not going to go away but it is not going to take over the market. so if you have zero need for capital and a brand in the investment community, direct listing comes into the frame and you have to make a decision. the advantage is you don't have to get involved in what is the right price, right? if i go public and the prices up 40% or down 40%, i am the ceo and i don't really want to be in that game of trying to decide how to play that. i would rather get the right price. if you list first and then raise capital by year later, then you will know the price because the stock is trading. that is an alternative for some, but not too many. taylor: that was the former nasdaq ceo, bob greifeld. coming up, cambridge analytica whistleblower christopher wylie has a new book out. we will talk about the hacking threats as the 2020 presidential election closes in. and "bloomberg technology" is livestreaming on twitter.
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check us out at @technology and follow our global breaking news network at tictoc on twitter. this is bloomberg. ♪ everyone uses their phone differently.
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>> welcome back to the best of bloomberg technology. facebook is revealing a link that says its users can use a socio-network over the data scandal. facebook says the court's decision doesn't line up with verdicts by other courts including the u.s. supreme court. they are arguing that facebook improperly shared their data with third parties without their permission. more than 80 million user accounts were involved in that scandal. here's the man who blew the whistle on the country. he joins us wednesday from new york along with business week columnist. >> writing the book helped
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me to reflect on everything that happened. i talked about my journey getting recruited as a military contractor and modeling data work that hips identify people who are more prone to paranoid ideation with the idea of trying to mitigate that problem to having that work completely inverted after an outright billionaire in steve bannon acquired a company, to, in effect, do the same thing in america, targeting people who are more prone to radicalization but in this case for the alt right. >> christopher, coming forward the way you did, blowing the whistle on facebook which as we said on the program many times is an incredibly powerful media company, maybe the most
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powerful in history. what was that like? did you get any pushback from facebook, any threats, and as you've moved to publish the book and tell the story in full, have you heard from them at all? >> where do i begin? like, before the story even emerged, i had been working with law enforcement and regulatory agencies for months and months before the actual story broke. > when facebook found out that, you know this story was emerging, they knew about -- analytical where before any of this was published. the first thing she did is threaten the journalist of the guardian with, in my view, a spurious libel accusation. it turned out everything was true. in my case they went and banned me. they banned me off of facebook and for some reason off instagram. after that point, working, you know, day in and day out
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with regulatory authorities in the e.u., uk and the united states, all over the world one thing i thought is just the power that this company has to, you know, to hide, obfuscate their work. when you blow the whistle and you see something that's wrong and you report that to an authority you think there will be some guy somewhere in some federal agency building that like knows what to do and one of the things i realized this isn't that guy. that guy doesn't exist. i've talked to governments, i've talked to regulators, i've talked to congress, parliaments. people do not know how to handle this problem. for me, the real concern is that we have a completely unregulated digital landscape that you know, people like facebook take advantage of and even though companies like this one have
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dissolved and no longer exist, the capabilities are still this, and one of the reasons why i wrote the book was to serve as a warning, even if this company no longer exists what happens if china becomes the next company or north korea, there are no rules. we're entrusting our democratic process to a private company and i question whether that's a good idea. >> christopher, you mention that you're in conversations with lawmakers and other regulators and i wonder if you think that the current regulation and current lawmakers are doing a good enough job handling the problem as you describe? >> i think -- one of the things i realized going to congress is the power of
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lobbyists, particularly to define narratives. one of the first questions i would always get at congress is, can the law ever keep up with technology? you know? i would say we regulate nuclear power plants. we regulate airplanes. we regulate medicine safety standards, there are all kinds of technologies that we regulate in the name of consumer safety. just because something you use is software or, you know, on the internet doesn't mean that we can't create rules, whether products they are putting out in the public will be safe for people to use. the united states is one of the only countries, only oec country, that doesn't have a national level privacy law. when you look at, you know, the language and the way that a lot of companies talk
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about themselves, there is opt in, all of this stuff, yet when you look at the types of people who work at the company, they are called an engineer, they are called an architect. they build eco-systems and environments. these are things that people are going. into these are arc pictures and when you look at how we regulate physical architecture and engineering, where if you built the building, if you're an architect and you pulled a building without fire escapes, well, it's okay, because people opt in, if it burns down, well, that was your choice, people wouldn't stand for that. and, so i think that one of the things that i hope people, particularly lawmakers, if they read the book, one of the takeaways is, we need to understand what is social media. what are these platforms? they are architectures and they need safety standards. >> we've got obviously 2020 elections coming up. the data that was at issue with the cambridge analytica scandal that we've been talking about for years, is it possible and conceive than it could come into play again four years later? in a larger sense like, how worried should we be about foreign interference going
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forward? >> i don't know. i don't know what happens when that information. i don't know what happened with that data. a lot of the same people who were working at cambridge analytica now work for the trump campaign. these are people that had regular interactions with officials and also, then going and meeting with the trump campaign. the people exist, capability exists, whether or not the data still exists, i don't know. facebook presumably has tried to contain the problem but when i dealt with them they didn't really do much. that's exactly why we need to take a step back and ask, should there be some kind of consumer safety watchdog when it comes to digital platforms. no one is watching, you know, these are the things that can happen. and, in this case, you know,
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we had people come forward and talk to the media but what about the cases where that doesn't happen? >> cambridge analytica and christopher riley. analysts predict the connected tv company will triple its user base by 202. we'll hear from that analyst next. and later, consolidation in the delivery business. we'll hear from the delivery hero c.e.o. the company is a major player in europe. this is bloomberg. ♪
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>> roku had its best day in two months on wednesday after researchers upgraded. it's the first such move by an analyst since the sharp recent declines in the shares of the video
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streaming platform to. discuss the move i spoke with tim of the company on thursday. >> there is plenty of competition and we highlight that pretty thoroughly i think in our note. the stock had come down from 175 or so to about a hundred so that was kind of an opportune moment for us but essentially it's partly the international expansion that we talk about in our report. going from almost zero to some large number internationally and we think they can get to approximately their size internationally that they are in the u.s. now with within about three years. on top of that, connected tv advertising, which i think is really the growth story here for roku, is absolutely growing very strongly and roku has built this up for great position to continue to grow into that. >> so let me parse down a few of the points you hit on, one of which is the stock falling from 170 to 99
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if a matter of two to three weeks. how much of this was purely from the multiple standpoint, it looked relatively cheap? >> well, at 170 or whatever you could argue it got quite expensive. you had a number of software-related type of stocks trade down. so i think it's as much sector rotation going on at the time as anything the stock went from, what, 55 was its more recent low to 170, in the space of, whatever, two, three, four, five months. it's such a sharp move. anytime you get that sharp a move it's not surprising to have it come back and take a breath. there was some increased news of competition. we heard about amazon fire tv. we heard about cop cast with a flex product which i don't really think is a competitive issue for us but more competition coming at the time. just the wrong combination of factors for the stock. >> you mentioned earlier about international expansion being key. sort of as a catalyst for the stock going forward. what types of numbers on that international side do you need to see from the company to maintain your thesis?
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>> we don't know anything about the international expansion and we don't know anything about the strategy. we know one or two bits and pieces. we don't know the rollout schedule. what we've done is tried to lay out what we think is a reasonable assumption based on a connected tv penetration rates into homes, where roku can get. that's where we get to our estimate of getting into 35 or so million households internationally within three years time. so that's on the divide side. another way to look at it is on the advertising side. this is really the more important story is the advertising platform. if you look at connected t advertising growth it's growing double the rate or triple the rate now from a year ago. if you put a more modest assumption of growth on that and layer it over a few years time you get some pretty similar numbers that we come to for roku's growth in terms of revenue over the
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next three years. >> that was tim nollen of macquarie. mark zuckerburg's sister is -- founder and c.e.o. of zuckerburg media. she sat down on thursday and the two discussed evolution of content, need for consolidation and the evolving role for females in the industry. >> a hundred million hours of video gets uploaded just to youtube and that's one channel in one day, every day, there is over a billion posts on facebook so you're right. who is out there listening to your content? it's everyone else. just constantly making their own content. >> is it going to go down or be oversaturated? >> in 10 years what kind of content are we going to be looking at? >> there is going to be a layer of curation like in museums. will be exhaustion so people are looking for experts to tell them what to watch. i think, the pendulum is
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almost shipping back again to the bigger need for expert voices in news, in different areas, because people are now bombarded by so much that, they kind of want to be guided a little like you would take care of a collection at a museum. i think they want more high quality content again. it's interesting because, when i was first starting in social media it was all about how many eyeballs could you get on things and now i think the metrics are shifting back to kind of engagement and depth. >> are the next three years going to be critical on who survives and who gets it and who doesn't? >> absolutely.
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it will be very critical and companies will have to make sure that they are playing in all of the new spaces. that's why we're talking about audio so much at zuckerburg media. it's one of only spaces at the moment where there are more people listening to pod casts than those that are update. there was blogging about 20 years ago that window is gone. i would not suggest to anyone today to launch a new blog. the world doesn't need it. it's impossible to get noticed but posting and audio is still in that really beautiful window right now so i think the media companies that are nimble enough to see those opportunities and get in will survive. >> as we look at the 2020 presidential elections, how
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should media companies look at this election differently? >> gosh, it's interesting because it's so fragmented. you see there are so many candidates. there are so many people that are thinking, that have passions around different issues and different topics. i think, you know, gone are the days when you had a few sources that were the go to places to turn for an election. so i think media companies, they have to almost think of themselves as 20 or 30 tiny little media companies, and arm their employees to be individual media companies in order to be reaching the most people that they can, but it's an excitingly creative and stressful time to be working inside the media company for sure. >> that was zuckerburg media, founder and c.e.o. randy zuckerburg. >> and coming up, the food delivery business is consolidating. takeaways deals. among the latest in europe. you'll hear more about the sector and growth projections from the c.e.o. of delivery hero next. this is bloomberg. ♪
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>> food delivery remains a top market. front-runners, uber eats and others remain profitable and we continue to see consolidation with established giants and just eat preparing to merge. this is a key europe player. they sold their german business earlier this year
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and are now seeing customer growth in new markets across asia and the americas. bloomberg talked exclusively on thursday to discuss this space. >> we need market shares globally. we're on path to be the largest food platform by the end of the year. and in germany --. [inaudible] now eight months later we do 7.2 million orders per month in taiwan. that's three times the minimum orders that we did in germany back then so we see that the investments we've been doing are really paying off. >> so you see more future merging markets. you got out of a couple of
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developed markets recently. you mentioned germany and there have been others. will you be selling more developed market businesses to focus in on the merging market space? >> we're generally focusing on markets where we will see the best return, where we'll see the best return on every single incremental order and that's what we have in the middle east, asia and latin america but also in some european markets. we're seeing very good returns. very good footprint where we have no general interest -- doubling down. >> doubling down on the markets. what you're trying to do in some of those markets is deliver more stuff. not just food but to be a little bit, dare i say, like an amazon. are you concerned that that's a little bit on low side? >> our main focus is to deliver what customers really want and then work back to find ways to make it happen and that's why we
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look at groceries, pharmaceuticals, and if you take an example of this, it would be turkey. we can deliver in 13 minutes, way beyond what amazon can do. we now work from there to improve economics. we've reached a point where we can actually deliver things on good economics. particularly in this quarter, overall, our efficiencies are improving profitable and that's very encouraging. >> as you look into the future, what percent of your business do you see being if food delivery and what in other logistic positions? >> i still think food and hot food is our main vertical, and that's where we are at our core. and i do believe that that's still probably 90% of our business but from time to time you need something, and we want to be there for our
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customers. we want to be that partner. >> why do you need something else if it's 10% as a business? >> we want to make sure that our best customers can go and stay on our platform when they need something and also having them to continue to come back to our platform gives value. of course, at that time, if you can deliver toothpaste that evening and they really need it you build a strong love for our brand. but then, on the other nine locations you might order food and get that delivered but would you remember that experience. >> that was part of our conversation with the c.e.o. of delivery hero. google is ramping up its restaurant industry footprint. just last week the tech giant announced it would be partnering with the leading digital food ordering platform for the restaurant industry. it would enable customers to order directly from over 300 restaurant brands across google search, maps, and the google assistant. i sat down for an exclusive interview with the c.e.o. on monday. >> so the relationship is really about enabling our restaurant brands to be found by consumers when they are searching for restaurants on google. consumers kind of naturally do that today. they are looking for their favorite restaurants. now they will be able to find those restaurants, order directly from the google platform, whether that's search or maps or even the google assistance and send the order directly
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through our platform to the restaurant's point of sale. i can't speak to the way google's financial model works. our financial model is to be a subscription platform with transaction fees on top of that millennium for increased order volume. >> and so do you share profits with google per click, when i click on the ad, when i click on your site, or when the delivery is confirmed? >> it's really come from the context of consumers today ordering through different platforms like third party restaurant delivery marketplaces. when they order through those platforms they pay something, the restaurants pay something between 20%
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and 30% commission to those third party marketplaces. this gives restaurants the ability to take orders directly from google, then we're just charging the restaurant a flat fee per month and fee per transaction that pales in comparison to the third party restaurant delivery marketplaces. >> so talk to me about the restaurant side. why would they want to be on your site? >> restaurants are using it as their delivery neighbor platform. we work with over 70,000 restaurants. they are looking to us to help drive direct traffic to their restaurants. this is around developing a direct digital relationship with those consumers and also listing their menus on popular third party platforms in a way that keeps the restaurant in control, enables all the orders to originate from outside the restaurant and come directly into the point of sale suspect at the
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restaurant. >> are restaurants playing the volume game here? >> yeah, i mean, this is an amazingly seismic shift that's happening in the restaurant industry. we're going to a place where over half of the overall sales in an $800 billion industry are taking place through consumers that are looking to get their food and consume it off premise and we're moving towards over half of that coming through digital channels so the restaurant industry has never seen a shift like that and we're all about helping our restaurants to be the great beneficiaries of that shift and get their orders coming directly from their customers and building that direct consumer relationship. >> i hear you on the seismic shift but it's also an industry that's becoming increasingly competitive., uber eats. fresh direct. you name it, all of these are these online delivery programs. how do you stand out? >> we're not a consumer facing brand. we're a software platform that restaurant brands use to build their own apps and websites. a lot of them are partnering
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with olo and sending order through olo into the restaurants using our rail that neighbors us to syndicate the content to those third party sites and have those orders still come through and go to the restaurant point of sale keeping things simple at the restaurant. we're the partner that restaurants select at their digital ordering platform that they are building on top of and then enabling them to keep things simple and kind of tapping into all of those other third party sources of orders. >> it's also competitive space when we look from google's perspective. there are other mapping services, a lot of other search engines, or voice assistant programs. why did you go with google? >> there is nothing about our relationship with google that's exclusive. this is part of our rails platform which is really about getting our restaurant menus into every third party site that they would want their menus to be listed on, where they would want consumers to find them and place order. we've done similar deals with others. most recently uber eats and now this announcement with google, enabling our restaurants to go where the consumer is and tap into that on-and did universe of customers. >> that does it for this edition of the best of bloomberg technology. we bring you all the latest throughout the week.
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♪ emily: he's one of the closest confidants of the google cofounders. the leader of alphabet's secretive x lab. born eric keller, he picked up the nickname astro in childhood, with no idea he would someday be working on making so-called moonshots a reality. raised by parents he calls hyper intellectual hippies, one of his grandfathers won a nobel prize in economics. the other, some say should have won one in physics for his work on the hydrogen bomb.
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