The Digital Investors are scrutinizing snaps projections. According to the filing, the maker of snapchat is offering 200 million shares for 14 to 16 million each. At the top end, cap would have an evaluating they could each take him a check of as much as 256 million. We spoke to the ceo and editor at large cory johnson. What becomes of this, i do not know. It is a high evaluation. On the positive side, they have big growth numbers. We all know the story of how high they are reaching and how valuable they are to advertisers. This is an extraordinarily high price for any company of any kind with any kind of growth metric. For one that has negative growth margins, for one where growth is slowing so much where there is a Big Questions raised. This roadshow is going to be an interesting one. There will be excitement around the deal. Theyre very strange things in the filing, not the least of which is an unsteady growth rate. Yearirst quarter of last had only 14 growth sequentially. They turn that around. What happens there . Caroline what do you think . How much is riding on snap and founders and how much they get to take home . How much is riding on the rest of the Tech Community . It is one of the biggest ipos in memory. I think the industry is watching this with fascination. This company doesnt rise above the rest right now, it is at least sometimes, and more or less legitimately compared to Companies Like facebook, google, and twitter. It is way smaller, it has that potential to be fundamentally new communication, given the passion that young people have developed for it. It does sort of symbolize what some people think is the next phase of technology, driven heavily by video. The other hand, it also symbolizes a kind of distorted financial mindset where theyre not giving the shareholders any power whatsoever. The idea that facebook pioneered two kinds of stock has been taken to a extreme. Every tech Company Seems to think the founders should have complete control which is what they literally have here. That is something the industry is watching with ambivalence. Caroline cori, thats a lot of of voting right, it seems to be that it is the first u. S. Company to really level this, to have no Voting Rights whatsoever. Is that why are they being more cautious with the price tag . The company is worse the company is worth less money for shareholders for a couple of reasons. Theyre worth less money than they have less profits. The ownerss not have of the shares exert their rights. There are a lot of things that snapchat is doing that it will get a lower evaluation than it would otherwise get. Not having Voting Rights does not bother anyone when the company is run as well as facebook. Not bother berkshire. Athaway it sure would not bother them at yahoo when investors had to come in and save the company from its south. Weve seen it over and over. Outside investors come in and make the situation better. We can make this thing better, that will never ever happen for snapchat. You are a mand, who knows the innerworkings of facebook. You are a man who knows the inner workings of facebook. Is the competition that fears . Is the competition that fie rce . I dont think they are copying snapchat worr. You know, the comparison between the two companies only goes so far. Facebook, when it went public, clearly had the potential to become a world altering service that was used by almost everyone. In less you believe that is true of snapchat, you almost cant justify this kind of evaluation. I frankly dont think you cant justify that kind of talk about snapchat. It does not cap, in my opinion, the potential appeal to our ages,s, children of all ordinary working people. It does not have that kind of capability. It is not a true comparison. The road next up, show. Management will travel to cities including los angeles, San Francisco, and new york. Deciding whether or not to put money into snap, investors are want to compare the company to its peers, facebook and twitter. What are they hoping to equate them to . Neither. Snap exact want you to think of them like amazon snap execs want you to think about them like amazon. It is unclear what that will look like. While the Company Grows and expands, management has told bankers that Financial Performance could be, lumpy. Dont forget that the revenue model is only a couple of years old. Right now, bosses are higher than sales. Sound familiar . Fluctuation performance is amazon his trademark to amazon. Amazons ecommerce platform the bottomices line is, amazon investors have had to be patient. It has paid off. The stock is at 43,000 since the company went public in in the past two years in the past 10 years it is up. Amazon is a once in a decade company. Snap is much younger and riskier. Their ceo will be left asking potential shareholders. Coming up, verizon is close to a renegotiating deal. We are surprised just how little the discount deal is. We will break down the deal, next. Later, we will hear more from the man credited with the payment out beloved by americans. Paypals coo joins us on the Goldman Sachs internet conference. This is bloomberg. Verizon will be getting to operate unlimited data. Verizon begin to offer unlimited data. Tmobile ushered in the move to unlimited data. Steadfast refusal to run to offer unlimited data. Deal announced this week would reduce the price of the original 4. 8 billion deal like 250 million. Verizon had balked at the first price. Are expectedpanies to share ongoing legal responsibilities related to the hack. Yahoos shareholders will walk away from this fairly happy. There was a risk that verizon might walk away from the entire deal altogether. The game that has been going on over the past few months has been, who has more to lose . Yahoo has more to lose. They would have been in a very difficult position. They would have to rerun that tells option. T took months and months they would not have gotten as high a price. Verizon was the obviously was obvious buyer. They will walk away from this thing. Were pretty happy with only a discount of 250 million. That number may change, it could go up a little bit. It will be in that ballpark. Alex, i spoke to the ceo of aol. It did seem that the desire was there to get their hands on yahoo . Have a listen to what they said. When you to figure out whether there has in value changes. That is how simple it is. The value change has clearly been negotiated. What about the next steps . It is where verizon pushes with yahoo consumers. Right, you have a reason from Tim Armstrong about why bryson was able to accept a discount. They feel they can put aol and yahoo together. They want to move on to whatever else is next. Weve already reported that there was a conversation between horizons ceo and liberty video between verizons ceo and liberty video. We know verizon is looking at 10 to 12 acquisitions. Eating this deal done it allows them to whatever else is next to getting this deal done. It could be a much bigger deal than then yahoo . It is only a small fraction of the larger company. Yahoo japan and alibaba. Im yahoos standpoint, they were able to accept the discount price. They got a buyer and they could monetize japan and alibaba. That was the quirks of you. That is what they need to find out. Is someone going to buy this, Libby Alibaba will it be alibaba . All of those are outstanding questions. You are busy man. I want to make the most of you. You are also putting out stores on apple. You are also putting out stories on apple. They have this enormous cash pile, billions of dollars hundreds of millions of dollars. Apple may be finally willing to do it reveals. They have never done deals in the 40 plus year history of the company. They have grown products organically, shying away from ma good shying away from a. My colleague and i dug deep into that to figure out why they have not done that. Part of the reason is they are not structured to do big deals as part of a company. Of doing no history big deals. They do not like working with investment bankers. The mechanics of being able to do a deal is not easily there for them. Not to say that they wont, but i do think the Investment Community has scratched our heads and said, you want to do bigger deals, why havent we seen it . Part of it may be their Corporate Culture is not subject to do this. And at t, we have seen them by directv, time warner. They have spent hundreds of billions of dollars on acquisitions. That was alex sherman. Pple hit a record high investors are optimistic the next iphone drive a resurgence in sales. Bloomberg Technology Reporter alex webb joined us. Stocks are at a record high. Theyre not at a record market capitalization. Buybacks, they are actually a little bit below that peak market cap. 699arket cap is closing at. 3 billion. Theyre so close to 700 billion. His the market arising . Is the market rising . It did take a bit of a boost after the earnings core the expectations for the next iphone sale. Since then, it has not been tracking the market. Forecast for the present quarter and how that gets implied will go to the next iphone. Analysts,aking into analyst recommendations, we only have 41 buys on this. Are we likely to see this stock rally continue . That is the implication of those stats. Interestingly, we are getting very close to the target price. It is not vastly above what it was now. It will be interesting to see how, by the end of the year, that will be the real clincher. It will be how compelling the next iphone is, how they succeed in attracting new customers in asia and china. That will speak to the attractiveness of apple as a brand. We have seen the competitors in succeeded inve developing phones that are as good as the iphone. Brand ort have the cash flow that apple has. That shiny is that apple has in fact that it has a brand. And how much they can get bank from their buck in their user base. They have more than a billion pieces of equipment. That is increasingly the narrative that the executive team at apple is trying to push. They say they intend to double their Service Revenue the next war years. Over the next four years. Specific for people to look at. There is a highmargin business. That is why apple is pushing into things like apple music and television content. The app store develops and sells a huge number of products every year. Bloombergs alex webb. Coming up, wall street meets Silicon Valley of the Goldman Sachs technology operates. We interview Goldman Sachs president , david solomon. This is bloomberg. Caroline a story we are watching, commuters and india ace major travel disruptions. Uber and although have been in dispute for drivers, bringing indias biggest cities to a standstill. Has been in dispute. Theyre bringing back bonuses, reducing the amount of registers on out. Bloomberg was a first report bloomberg was the first to report. They are set to a program that lets those who work for the company at least or years so back as much as 10 of their uber shares. They said the plan cap the buybacks at well below 10 million per employee. It is meant to give uber employees an incentive to stay. They have no initial Public Offerings insight. This week, we were live from the Goldman Sachs internet conference in San Francisco where a number of the nations top bankers converged with the Silicon Valleys tech dynamics. In anre ushering aggressive era of tech m a. We sat down to discuss the rising number of tech opportunities. There is certainly lots of capital available for companies that are going. There is a good amount of capital available. A lot of that is available privately, away from the Public Market. Im a big believer that these things and inflow good ultimately, they gravitate back. We are hopeful and optimistic that we will see more ipo activity. When you look at the mall that a lot of these Companies Operate in, they are able to run their businesses and grow and Access Private capital privately, these companies are putting off the opportunity to come to the market longer. The capital for growth is available privately. I would expect to see more companies coming back into the Public Market that we saw last year. The process will continue to be very thoughtful and a methodical process. You say and inflow. We saw plenty of consolidation in m a. We might see more cash come. You say ebb and flow. M a activity is pretty active. We have been involved in 14 m a transactions since the first of the year. That is more than we have seen in a comparable six week. Late 90s. E the desk since the late 1990s. There are number of reasons that that is occurring. Given number of very, very Large Companies that are growing very, very quickly. Facebook group over 50 . And some group 27 amazon 27 there also taking away revenue in some way from some other business there disrupting to some degree. That puts some of these other businesses in a place where they have to think about options carefully. Probably, we will see consolidation in the tech space. Activity levels will continue to be high this year. It is if the environment stays the latest now, it will be a good m a year. Lets talk about disruption. Back in 2015, Goldman Sachs technology company. How are you adapting . Are you having more engineers . , clearly like everyone, are using Technology Much more than week wouldve. It is very easy to look at the equity trading business. If you go back 15 years, the way people traded equities was voice to voice, persontoperson. Now, through vast system of equity, people trade electronically. That is a massive shift. On in most aspects of the business. The firm itself adapts to those environments. We hire all different types of people aired we need different kind of talent we hire all different types of people. We need different kind of talent. We needto make more of those kind of people. It is a Diverse Group of people. As you and i discussed, the quality of our people and our ability to attract great people is important to our overall business. You have quite a lot of innovation. Do they want more parental leave . Do they want more holiday . I dont think it is fundamentally different. Young people today coming in want to work for a Great Organization with terrific people. It gives them the opportunity to learn, grow, and excel. Weve always been focused on creating the best Work Environment for longterm growth, positive experience, economic reward. We believe that if we do that, it is good for shareholders, clients, and has a positive effect. You got into digital lending. That is the new business for us. It is a new platform that we started. We think we are an interesting position. History thategacy a number of the other commercial banking competitors have, we are in a position where we can build a tailored technology product. With a targeted universe that we are going after. We think we have an interesting product. Were excited about the growth opportunity. So far, it is also a good start. A conversation with Goldman Sachs chief officer. Still to come, former nsa alexander joins us to discuss the new administrations approach to cybersecurity. Check us out on the radio. You can now listen on the Bloomberg Radio app. This is bloomberg. Back to will come best of bloomberg technology. U. S. Officials are investigating the extent of contact between president trumps advisers and russias intelligence agency. The developments are just the latest example of National Concern about russias capabilities and influence on u. S. National security. We spoke with retired fourstar general and director of the nsa, keep. Keith. I dont want to get out in front of the president , not having seen the executive order. Getting the i. T. And potential ready, about getting the government and industry working together. Those are all in the right venue. It is what our nation needs to get started. The key thing that you see in his approach is that he is delivering on a campaign promise. He will take cybersecurity seriously and will address this problem. To do that, when the government and industry work together. Caroline we were just talking about cybersecurity. You yourself have the experience and have worked in the nsa. Or you privy to conversations . Were you privy to conversations . They reached out and gave people more than just me, people they gave advice. That was one of the great honors. It after theut press. I thought that was a great way to build on it. You can see they are taking much of that input and continue to refine that executive order in a thoughtful way. Caroline some of the other things we look to is the mayor of new york. Has got is he has the management and leadership. How do you bring industry and government together . That is an important part of this. When you look at folks like mayor giuliani, you say ok, what does he bring to the table . He can be one of the people who brings industry and government together. That is important. Lets talk about the problem, lets talk about russia. All of this comes on the back of regulations that russia was attached to the election all of this comes on the back of revelations that russia was attached. Differenta slightly and unique if you. Here is mine. When a new president comes into office, one of the things that we ought to do is, is there a way we can work with other nations . If so, how do we do that . What is the right relationship . Waywe do this in a peaceful that helps the world . Step one, research that. Do what we can do. Timmy come up with a relationship . Where the limits to that . Can we come up with a relationship . When of the things i take great comfort in is that some of the people he is brought into the you look at the secretary of state, this is a great individual. The secretary of defense, a personal friend, tremendous capabilities. He put those three together, he is getting people that will give them candid advice. My experience inside that rim was the press left my experience inside that rim once the press left, it was amazing. Get their insight, listen. Or natione president needs to see. He is listening, he is getting this right. Will address problems that we need to address. That is a good thing. Going back to russia, first step is, we dont want to step out with a conflict. Is there a better way to do this . If the answer is yes, we should research that first. We should discuss it. Hadline we have already one person step down, michael flynn. We are in a bit of disarray. Can you talk to us about whether that is a weakness . Is that a worry . I think they selected somebody already. I heard. Bob harward. I think that broke the press. That is out there. That is what i heard. I know bob, he worked closely with general mattis. I know bob. He will do great job. If you have you have other great people in the spirit you have other great people in this. He has great people there. The good part is, he is reaching out and getting good talent. That is a good thing. Caroline could we see the relationship with trump and some of the u. S. Secret service says be damaged . And some of the u. S. Secret service be damaged . I saw none of that. I saw it not at all. Ompletely professional i think the president is looking at these things and will make statements. At the end of the day, when i saw him reaching out in his discussions oneonone, i dont see that happening. Caroline can he give us a global perspective . Where is the need for the greatest cybersecurity . You are getting potential calls. Is the u. S. A key concern . I think the u. S. Is, in part because we are a country. When you look at, how do you talk the United States . How do you attack terrorism . If those are the two vectors, we have done a good job on blocking terrorism. We need to keep that up. That is the key for the future. Our cyber defenses arent they are. That ourfixed cyber defenses arent there. That is not where we need to be. It needs to be defensive, we need the ability to defend the nation at Network Speed so if somebody tries to hurt us, we can stop it. Before the attack rebels us. Those are the things before the attack cripples us. The greatest concern i have is when i look at that and think, said we is where they dont need a pearl harbor. The part that i found comforting was trump listen to those things. He said, we will make steps. They may not get it done this week, they will address it. You will see movement on it. We have to get industry and government to work together. There are a lot of steps, but it starts with the first step. Caroline coming up, the pentagon is paying hackers. We will hear from the socalled ethical hackers. Up canadas buys co. Paypal buys up canadas venmo. This is bloomberg. Facebook is adding live games from mexicos top portfolio. The deal with univision, they will broadcast 46 games. Be it willll be in english. The financial games terms will not disclose. At t and its directv unit are being sued for alleged illusion. Collusion. Planned and 85 billion purchase of time warner. At t has dismissed concerns that the takeover would limit competition. U. S. Cybersecurity continues to be a major theme under president trump. With concerns rising, they received a 4 million contract. Ethical hackers completed an exercise. We spoke with the ceo for more on what their experiment found. The panic on certainly recognized that the threat is just for fast as it is for private enterprises. Theyre realizing the only way to stay ahead of the threat is to utilize the same hackers that are attacking them every day. Theyre using the attackers to their advantage. It is really exciting to see them taking this more progressive approach, kind of like the Technology Companies have done for quite a few years. That Doctor Companies jumped up board the Health Care Companies jumped on board. Caroline talk to us about your experience. You have just run this exercise. What does that bring up . Was the pentagon surprised by how many vulnerabilities it had . Traditionally, the government has taken a consultative approach. Lets do assessments on the system, lets take reports good the difference here is instead of one or two individuals, we had 80 of the top hackers across the u. S. Trying to break into a critical system. This is the first time theyve ever attempted this. Within a few hours, we found something pretty critical. It ended up on secretary madisons desk within 24 hours. It ended up on secretary matt iss desk. Just looking at the screen we have up, Cyber Incidents had Phenomenal Growth in cyber threat. Not so much growth in the amount of investment in cyberattacks coming from the government. Are they wising up . It is scary. There are starting to recognize the need to be thinking outofthebox. They are never going to stay ahead of the threat. Supply and demand problem as it relates to cybersecurity jobs. Over one million jobs remain unfilled globally. That will skyrocket to 1. 5 million jobs by 2019. There is no way we will hire all of the talent. It is the only way would stay ahead. Caroline talking about the global aspect, you said you had 80 of the top at the goal hackers in the u. S. Are you looking to ethical hackers outside of the u. S. . We do have hackers all of the world. We utilize them for the enterprise focused customers. The u. S. Government is sensitive to leveraging people to using people in russia. When they it more comfortable with this concept, they will be comfortable with the idea of bringing more and more people outside the boundaries of the u. S. , starting with the ally nations. Hopefully, expanding from there. Caroline we saw the graphic from how much Cyber Threats have increased. Is it just that the media has got excited about it . It has caught our attention . Growth in the00 last 10 years have they got more frequent and damaging . The threat is definitely increasing in velocity, at the same time, were doing a better job at spotting the attacks. The data is deceiving. We have Better Technology and better capability to figure out when people are Hacking Networks and Critical Infrastructure and government. Critical infrastructure in government. Weve been attacked by other nation states, by other entities for a very, very long time. This is nothing new. It is getting more sophisticated. That was the ceo, j kaplan. We will hear from the man who helped settle your debt. Mo. Creator of the out ven mo. The creator of the app ven check us out online. This is bloomberg. Caroline back to the goldman internet conference in San Francisco. Paypal says they will acquire it is more than 7 internet biln payments. He caught up with the paypal coo. He helped turn venmo into a millennial favorite. Really, paypal has been a democratize or of money. People has been a democratize money. The underserved is a big part of how we think about bringing people into that. We think of bill pay as a critical service. It is also we think of the underserved as a population of we think that we can get it halfway into Financial Inclusion but also into the digital economy. Broaderart of our vision. Caroline are you thinking about bringing consumers from tio on to other platforms . You can walk into a store and make a bill payment. Can go into 65,000 locations into the u. S. In the u. S. 7eleven,lk into a load money onto your paypal account, even though you may not have had a bank account or part, you know how to money in the paypal account and you are part of the digital economy. Now you can walk into a 7eleven, load cash, and with paypal you are part of a digital economy. This acquisition serves a similar customer section. Me its screams to desert me about a underserved. We are in nearly 200 markets around the world. Arellion plus consumers considered underserved worldwide. We think about ways we can serve those folks and bring them in to the digital economy, for give them access. It also has an international play. It is often times serving the underserved. One of the things is and provides one of the things zoom provides. Caroline you joined paypal via an acquisition. Into theht venmo larger hub. What is the mindset about acquisitions . You talk about the underserved. Is it only that area that you want to make acquisitions . Weve always had a huge focus on mobile. We did over 100 billion in we think that there is a huge move to consumers moving to moguls. Those are areas that are really interesting. There is a huge move to consumers moving to mobile. Places wehose are will have a lot of focus. Weve had a number of great acquisitions. It looked to build organically. Strategic partnerships over the course of the last year. That included visa and mastercard, traditional banks that were partnering to bring services. Also people like facebook and google play. A number of other Technology Partners we are working with. We are bringing that to the also people likestart. Were partnering with a broader ecosystem. Caroline that was quite a change of tack. How is that coming to freshen . Many feel how is that coming to fruition . Cardthe visa market agreement help win back some of that . Itple have always been has always been one of the most successful companies. Visaartnership with mastercard is a demonstration of how her interest are pretty aligned with the rest of the ecosystem. Of how our interest. It has brought a lot of volume two people like visa and mastercard. Historically, there were some places where we were not working so closely with those things. Probably, weve always had a common interest. We are bring that into the digital world. We have led the way on that. Caroline we also spoke with a member of the socalled paypal mafia, who now has a company. By growing as quickly as we have been, the road is shaping up nicely. On were not particularly focused on measuring us to any giant. We are creating value for customers, our merchant partners. Beenig trend in tech has the wrong one company has been the wrong one. Everyone here is a bunch of idiots, were not going to be anything like you guys. That is wrong. American Financial Systems is the single best one in the world. Being a member of the club is an essential part of our plan. Anybody who wants to be around for the long term. I dont think i need to jump into being a giant. I want to grow my way into the club. Caroline talk to us about the growth. What products can you be looking to next . We are very focused on the Consumer Credit fueled the world. We are excited we are very focused on the Consumer Credit view of the world. A couple of branded things were working on. Themfraid i havto keep quiet. That delivering thy directly to a customer is something that we are very excited about. At some point, we will create rings that speak directly to the customers. Caroline you say the u. S. Is the single best economy in terms of banking, what about the regulation . Were looking at the Regulatory Environment becoming easier for some banks. Is this a net positive or net negative . It depends on the outcome of the changes. Much of the rhetoric around is not untrue. In other words, i happen to agree that loosening some of the tight grips that we have put on the industry right after the crisisght crisis 2008 will now be more than. Is asput into dodd frank true as it was then as it is today. I think it is a little bit more nuanced. Regulation is important, it is necessary. Markets do not always correct themselves quickly enough. I happen to believe in the need for regulation. It is important to engage with the regulators as they reshape the rules. Caroline is it important to engage with the new administration . I think so. I think it is important to engage with a democracy, if you believe in a democracy. Sticking your head in the sand is bullish. As business leaders, as citizens, we have a responsibility to be a part of the conversation, not run away from it. Caroline that does it for this edition of, best of bloomberg technology. Tune in on thursday. Thats all for now. This is bloomberg. Carol welcome to bloomberg businessweek. I am carol massar. Oliver i am oliver renick. Were coming to you from the inside the magazines headquarters. Carol all that ahead on bloomberg businessweek. Carol we are with the editorinchief, megan murphy of bloomberg businessweek. You guys take a look at the potential for a chinau. S. Trade war and how we should look at it. Not as someone stealing our