Im alisa parenti. This is bloomberg. Is next. Technology im emily emily im emily chang ans is Bloomberg Technology. Coming up, they are among donald trump most outspoken critics that the tech leaders just came facetoface with the president elect. Weve got the latest. Plus, in a unanimous decision, the fed raises Interest Rates and janet yellen says theres more to come. We will find out what it means for tech. The chinese app maker prices its ipo at the low end of the range, but he could still beat hong kongs biggest tech listing and almost a decade. First, developing news. New numbers coming out of a new hack attack on yahoo . Yahoo is saying this hack is separate from the hack they reported disclosed by yahoo affecting more than one billion users. I do when to get to the meeting at trump tower today, president elect donald trump just wrapping up a big summit with Tech Industry leaders, including Vice President elect mike pence and tech advisor peter thiel sitting by his side. Im here to help you folks do well. Honored. [inaudible] apples tim cook, facebooks sheryl sandberg, amazons jeff bezos were all in attendance. For the tech giants, this meeting was an attempt to persuade trump to avoid policies that might hurt their companies pertaining to immigration, internet security, regulation, and government investment. Ahead of the meeting, the oracle netstressed, we are exporters. Over 60 of our sales are overseas. Better trade deals are very much in our interest. From outside trump tower, selena wang. Who waseak to a source briefed on this meeting who said the top three topics were jobs, immigration, and china, that the meeting was very friendly, very productive. They addresseds, infrastructure, education, repatriation. Give us the rundown. I know youve seen all of these folks walk in and walked out. They didnt really speak to reporters. Tell us what youve seen. You are right, they didnt really speak to reporters. Floodedyists lobby with reporters. We did get a glimpse at the beginning of the meeting. Trump tried to strike a conciliatory tone. He started off the meeting by praising peter thiel as an innovator. Praised Silicon Valley for all the innovations they have been able to accomplish. He said, i want you to keep on innovating. Call me anytime, call my people anytime. He said, we dont really have a formal chain of command here. He changed his tone as opposed to a lot of the public opposition that was very alarming on the campaign trail. Emily certainly interesting to see them starting off on that foot after Silicon Valley was very vocally against the election of donald trump, aside from peter thiel. Its nice to hear these things, im sure. One of the real policy issues that they will be at odds here. Odds on here. Theres a lot of people saying this is an about face what the tech leaders are doing. Why is it such a bad thing, to open up the lines of communication . If you have a direct line to the president , and unprecedented thing we are seeing right now, you can start to influence the things you are important for the Tech Community and the world, really, and job creation and whatnot. At the same time you can learn where hes coming from and at least have a dialogue to open up these conversations. Was sitting 3 trillion worth of value across those tech companies. When you are controlling this becausethe economy, its not just about the outsourcing of jobs, its how do you position america for the next future growth when automation and these things are starting to take over. Emily at the same time we are learning that twitter was not invited rate writers reporting invited. Invited, saying twitter is too small. Politico also reported that inve way twitter handled the crooked hillary emoji that Trumps Campaign wanted to include in their twitter. Do you have concern, as someone who covers the company, that this could interfere with twitters business . I dont think so. I met with them this week and it is clear that they are adhering to their core philosophy that they have to be a platform for everyone. Emily jack dorsey has not been shy about sharing his political views. A lot of these folks have not been shy about sharing their political views. James its in the best interest of twitter to maintain a trump. Nship with donald thats the biggest sort of validation you can have, by having the president talk to the world through your platform. Trump. At the same time, jack not being invited is really not that big of a deal. Its about the companies that are really about the job creation. When you think about what twitter contributes to the to aal and global economy, much lesser extent from what you see from the guys in the room. While theres a lot of innovation happening in Silicon Valley, the Tech Community doesnt necessarily create a lot of jobs relative to the weight it punches. While theres a lot of public and the constituency of the United States prepare itself through education initiatives and partnering with the Tech Community so that in the next 2. 0 technology world, that they are able to work in the society. Even the jobs going overseas will be taken over by robots. On the jack dorsey note, its interesting that kanye was invited. Emily and he came down for a photo op. The company has said hes traveling. However, he was named to the strategic and policy forum along with elon musk, along with the ibm ceo ginni rometty. This in addition to a number of leaders who are going to be advising trump on how the private sector thinks about these issues. Is there anything more you can tell us about this particular meeting . Reporter i think it will be unclear how important ubers ceo are going to be to the Strategic Policy initiative. The people in that initiative are very wide ranging. Be turning forll them to talk about the future classification of how technology together. Hopefully this will be a very good line of communication moving forward, but no further details on that at this time. Emily Bloomberg Technologys selina wang live from trump tower. Good to see you in person, james. Together. Still to come, Net Neutrality is one of the key policies that could be on the chopping block under president elect trump. We will focus on the future of the fcc with the former commissioner next. This is bloomberg. Emily one of the most important tech policy issues at stake under a trump residency is Net Neutrality. This is a rule that prevents internet providers like comcast and verizon from charging Companies Like netflix and google a fee to deliver their content at faster speeds straight in the past, trump criticize Net Neutrality as a topdown power grab and republicans have expressed interest in rolling back the rules. With a changing of guard in washington that is likely to happen, so far the senate has not reconfirmed the democratic advocate. Er and trump will also name a republican replacement for chairman wheeler. Advocate. Joining us now from washington, the former fcc commissioner who has just written about his hopes for the tech meeting in new york this week. Commissioner, we have gotten some details about what was discussed there, jobs, china, immigration. It was a friendly meeting. We know that a lot of these tech leaders differ with donald trump on a number of policy issues. What do you make of the foot they have started on . Was an important meeting, both for president elect trump and the Silicon Valley executives. They both need each other. President trump and the administration will have a very significantmeeting, both for president elect trump and the on the valley influence Business Prospects of corporations and the highTech Industry, and the highTech Industry accounts for a large share of Economic Growth in the United States. This economy needs to grow much more rapidly in the years to corporations and the hightech calm. Come. This lets talk about gap between Silicon Valley and washington and how you expect this to play out. Youve said that the trump gap administration isnt going to do anything that would be financially disastrous that might threaten some of the social sensibilities of the folks in Silicon Valley, and when it comes to Net Neutrality, for example, this is a policy that could dramatically impact their businesses, right . No, actually i dont think it would. I think its in the interest of Silicon Valley companies to have why would call symmetric regulation, what weve had in the past several years has been what i would call asymmetric regulation where one set of companies faces one set of regulations, another set of companies faces another set of regulations. Thats not good for any set of businesses, for Silicon Valley, for other companies, for america. You will see these asymmetric regulations get rolled back hopefully very quickly. Emily theres a strong likelihood that jessica worsen russell will not be reconfirmed. What happens to that existing framework. Does it get rolled back completely . Does some idea or shell of it remain . I think it gets rolled back completely any new fcc and a new fcc will do just that. Emily why . It doesnt make any economic sense. Its an idea based on regulating one set of companies to be in a mother, may i situation where they have to come to washington to beg the federal government to let them do something, while another set of companies is unregulated. It makes no sense at all and i think you will see a new fcc rollback these rules, including Net Neutrality. Emily lets talk about the the fcc. Eadlock at i wonder what hope is there for anything more than a series of partisan divide it decisions that are the fcc. Heavily influenced by the party in power . Harold until the past four years, the fcc has rarely had a lot of 32 votes. Most votes would be 50 or 41. That has changed in the past 4 years. Theres no reason to think that going forward, it wont be much scenario. E 50, 41 im not convinced you are going to see a lot of party line boats. Votes. Emily who do you think that trump is likely to nominate, and who do you think he should nominate . Harold i have no idea who President Trump will nominate to be the new chair of the fcc. I trust he will appoint someone who is a market oriented someone who takes the law very seriously and someone who will roll back all of the regulations that have accumulated in the past four years. Emily any names you would throw out there in terms of good ideas . Think President Trump needs any suggestions. Im sure he has lots of very and i haveates, every confidence that he will make a wise decision. Emily what kind of legacy do you think the Obama Administrations fcc will be leaving behind, given what is going to be unwound . Harold i think the legacy will be that it made an effort to have regulations very much washingtoncentric, to try to extend fcc regulation to the internet. I think that will have proven to be a very bad idea, and hopefully new administrations of whatever party will look back at the obama fcc and say, we dont want to go down that path again. It did not work then and its not going to work now. Emily the former fcc commissioner, thank you very much. A story we are watching, disney trying to recruit major Hollywood Studios to join its digital movie service. Disney is looking to add content outside of its own to the disney Movies Anywhere service which lets customers buy, watch, and store their online Movie Services on a single site. Disney is said to be in an ongoing tugofwar with other major studios that support a rival format called ultraviolet. One catch is it might have to change the name of its service to get the other studios on board. Coming up, the chinese app maker is ready to go public. What it means for the global ipo market, next. This is bloomberg. Emily on the latest tech funding board, a home sharing website has raised 35 million in new funding. The company is looking to capitalize on the airbnb model of travelers staying in private homes rather than hotels. According to the ceo jen oneill, the site now handles 1 billion worth of bookings per year, six times what it had in 2015. Aturning to yahoo disclosing second major Security Breach that may have affected more than one billion users. The company said in a statement it hasnt been able to identify the intrusion associated with the steps by a back in august 2013. This is a separate hack than the one that yahoo announced in september, in which as many as 500 million User Accounts were compromised, getting this update ahead of the potential sale of its new web business to verizon. A Cyber Security reporter for bloomberg news. This new hack happened in 2013. Before the hack that we learned about in september that happened in 2014, how did they not know about the 2013 . Is a relevant question, considering yahoo just 500 million account breach and they brought in forensic experts, they scoured the network, they put out regulatory filings. The way they learned about this is very interesting, and outside Cyber Security researcher who saw this for sale on the black market in a very private discussion forum. The fact that yahoo lost one billion accounts they have one billion users. Buty not be a 1 1 match, its based on their users. This is potentially a significant blow to the verizon deal. Emily who do they think is behind this . They announced in september it was state sponsored and there might be some sort of statesponsored involvement here. Is a huge source of debate. Yahoo did say the first breach they believed was state sponsored. They provided no evidence for that. He reported that sources familiar with the case, that attribution is not ironclad. The implication is that yahoo would have reason to say that. This one appears to be a straight cybercrime operation. And for the fact that yahoo scoured its network and did not find this earlier breach without an outside Cyber Security firm bringing it to them, really should raise some questions about how well this company has secured their network. Emily talk to me about what you see is different from this breach from the one we knew about before. In this breach they are talking about more records. Most significantly, the passwords leaked in this breach were secured with an insecure encryption algorithm called md5. Its very cracked double. Crackable. Other breach yahoo said passwords were encrypted with a more secure algorithm. This is more records with a less secure encryption algorithm. And, the company didnt know, even though theyve been scouring their network. Emily there was concern that this deal with verizon was already on the rocks because of the initial hack in september. Verizon under the said he was cautiously optimistic recently that the deal would still go through. What does this mean for the deal now . Big, open question because its not just about User Accounts. The central question we have learned yahoo has been looking because its not just about User Accounts. The central question we have learned yahoo has been looking at internally, they stole User Accounts, what intellectual property from the company did they also steal, if any . That will be a central question for verizon. If you have lost all your users accounts, and corporate ip, what are you paying close to 500 billion for . Verizon has said they believe the breach would be material and that gives them license to potentially negotiate downward or walk away. , theyrehoo has said telling you just to change your password, they are on the issue, but its three years later. What can be done . Done, the damage is especially if this has been trafficked in cybercrime circles for 3 years. Been usingusers have information to send spam and commit identity theft. Jordan robertson, our bloomberg Cyber Security reporter, thank you for that update. We will continue to watch for headlines on this story. Coming up, on a day that trump tech leaders in new york, were speaking to one of the most well respected venture capitalists in Silicon Valley. This is bloomberg. York, were speaking to one of the most well respected venture. Ways wins. Especially in my business. With slow internet from the phone company, you cant keep up. Youre stuck, watching spinning wheels and progress bars until someone else scoops your story. Switch to comcast business. With highspeed internet up to 10 gigabits per second. You wouldnt pick a slow race car. Then why settle for slow internet . Comcast business. Built for speed. Built for business. You are watching Bloomberg Technology. Lets begin with the check of your bloomberg first word news. The exxon mobil ceo, Rex Tillerson must face questions over 187 million in unvested stock awards. He will lead a sign off from the top u. S. Ethics agency and from exxon mobils board of directors. China appears to have installed antiaircraft and antimissile systems on all seven artificial items artificial islands in the south china sea. The findings come despite statements by beijing that it has no in tension to militarize the island. Japans parliament passed a bill legalizing casinos. The move pays the way for billions in potential resort and death, but details must be laid out in a separate ill before any casinos can be built. U. K. Prime minister is urging the Union Representing the drivers of Southern Railway to an appalling strike. Tens of thousands of commuters were left stranded for a second day. The labor union was trying to resolve the longrunning dispute over driver operated train doors. Global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. Im alisa parenti. This is bloomberg. It is just after 5 30 p. M. Wednesday in new york. Paul allen with a look at the markets. Good morning. Paul good morning. Lets check on new zealand, first up and running. Nowone third of 1 right and nikkei futures are showing some strength, but we are expecting to see declines when the afx opens in a little under 30 minutes time. Keep an eye on tt be telecom. It just made a winning bid to fourthsingapores mobilephone operator. The oil and gas Company Seeking 1. 1 billion dollars in Share Purchase Plan to strengthen its allen sheet and further fueled growth opportunities. The us trillion dollar fell steeply overnight after the greenback strengthened, adding about 25 basis points. But the aussie dollar may move again, expected to hold steady, but australian unemployment figures are notoriously unreliable. More from Bloomberg Technology next. Emily this is Bloomberg Technology im emily chang. President elect donald trump held a meeting with some of the most powerful ceos in the tech world. Trump says he wants to keep innovation going and mentioned dropping trade restrictions. Possiblerite down the changes a trumpet ministration ht bring is vinod khosla , you have made major shifts on clean energy technology. Im told the top topics were jobs, immigration, china. It was very friendly and productive, yet Silicon Valley spoke out vocally against donald trump and continue to disagree fundamentally on a lot of issues. What is your reaction to what we know about the note we are starting on here . It is important to build bridges with the new administration. I think that is important. It too early to tell what the policy will leave. There are significant areas where we will agree and other areas where there will be some disagreement. Emily jeff bezos just said the meeting was very productive. You and i spoke before the election and i know you are not a donald trump supporter. What are your biggest concerns with a trumpet ministration . Vinod the area i think that needs the most conversation around Climate Change and Clean Technology i expect will have relatively good agreement on skilled immigration, taxes need to be addressed, but that applies more to the larger Companies Like microsoft, amazon and google. There will be Smaller Company issues around skilled immigration into this country. Important to innovation but i believe the new administration and Telecom Valley is focused on innovation and what accelerates it. Gates met with donald trump yesterday. Lets take a listen to what he had to say. Bill we are a good conversation about innovation and how it can help with health, education, impact foreign aid and energy and a wide ranging conversation about the power of innovation. Vinod khosla wrote an oped saying these tech leaders should be ashamed of themselves because of what he has said about the tech sector and attacks he has made on companies from apple to amazon. What do you think about that . I think 50 Million People are so voted for trump and we have to recognize that happened. , we need to find what is the right bridges to build together. Peter thiel was sitting next to donald trump in this meeting. He was influential in getting these folks together. He is not shy about speaking his from but his views differ a lot of folks views in Silicon Valley. How do you feel about him being the voice in trumps ear on Tech Knowledge he . Think peter is very focused on innovation and capitalism. Hes very focused on less regulation, all of which jobs with the Tech Industry would like to see. I mostly tend to agree with peter on many of these issues. There are other issues where he has a different view and i think thats true anytime there are more than two people with strong opinions. I want to get your thoughts on some of the cabinet picks rick perry for secretary of energy, a department he famously wanted to cut but then couldnt remember the name of. , ceo of thellerson Biggest Oil Company in the world with big ties to russia for secretary of state. What do you make of these choices . Vinod they have previously spoken out against Clean Technology and Climate Change issues. I was on ad say is panel couple of years ago with Rex Tillerson and we both acknowledged climate was a risk. We had different views on the degree of risk it was and he says hes willing to pay less of an Insurance Premium to manage that risk than i might be willing to. What is the level of risk and what level of insurance or remedial action should we take . Emily you are part of a new 1 billion Investment Fund focused on cleantech with bill gates, with jack ma, jeff bezos. Talk about what you want this to accomplish. I think we need a lot more energy and low carbon rather than in transportation or electric power. That takes a long view and investors are willing to take high technological risk or breakthrough technology. The purpose is to make both of those happen and if they do, i think theres less competition in that area and lots of Economic Opportunity to create very large businesses. Investmentskind of do you expect this fund to make . Bill gates has talked about solar fuel. A good example of a very high Risk Technology but with a lot of potential. Nuclear is an area that very promising. New kinds of building strategies, those are all promising areas and breakthroughs could result in significantly better economics. I believe enough technology exists to have unsubsidized market comparisons. Unfortunately, to any Clean Technologies get associated with subsidies that are not necessarily required in every area. Emily last time you and i smote you said itid was time to stop subsidizing solar. Do you continue to believe that now that we have a president elect who may not believe Climate Change is real . Job not think it is our to educate him on whether Climate Change is real or not but the degree of risk you have of catastrophic climate events caused by Climate Change. It is a Risk Management issue and as a businessman, president elect trump understands risk and that is the crux of this matter. It often gets confused by saying is it real or not. It is a matter of degree in our confidence about the risk and the degree of mick degree of risk we have. I agree many of the older technologies that have matured dont need subsidies and should not get subsidies, but Newer Technology should be subsidized just because many of the technologies have all kinds of special subsidies already in them. Always greatkhosla to have you. Thank you so much for joining us. One disclosure i do want to make Michael Bloomberg is on the board of Breakthrough Energy ventures, the fund we just discussed. Amazon drones take flight. The retail giant confirms its first real drone drop off. This is bloomberg. Emily attorneys at maker set to go public shares in the Company Start trading in hong kong thursday. The companys pricing shares at 8. 50 apiece. Hadbottom of the range and targeted. They are known for apps that let users retouch and beautify photos. Lulu chen joins us now live from hong kong. Put into context how significant this particular ipo is. Be the largest tech ipo since 2007 in hong kong. 637 millionsing dollars at a valuation of 4. 6 billion. This company had a chance to choose between the u. S. And hong kong and eventually they went with hong kong because they thought the majority of their this part ofsed in the world and thought investors would understand their story more. Their pricing did come in at the lower range. Question, as a niche market player which focuses on the selfie phone, where is the growth going to come from . Emily lets talk about their areas of growth. Take a listen to what he had to say about focus. We will be focusing on advertising comes selling our own products such as mobile phones and ran. We may develop our own camera and focus on women. I want to break down where the growth is going to come from. The chairman told us they will focus on two key sectors going forward. Have anrtisement, they app that functions at a social Networking Forum where users they try toorms and introduce an advertisement stream into the newsfeed. They are focusing on fashion and the cosmetic segment, mostly targeting female audiences. Lets talk about geographic expansion. Did speak with the founder and chairman about that. Listen to what he had to say. Like to expand into the u. S. , latin america and europe. Unlike those who for a whiter skin tone, people in other regions rather like tense again. Our focus is to get more exposure and let more people know about our brand. Later to turn it into a social media out. They have a lot to work on if they want to capture the u. S. Market. Theres a very different set of standard for beauty in asia and people might aspire to a fair complexion whereas in the u. S. , people might use their cap to look more tan in terms of skin tone. Companyrman told us the is working on a range of tweaks to make it more localized. Emily fascinating cultural differences at way. Thank you so much. First amazons first drone delivery is in the books, dropping off a package in english countryside just 13 minutes after getting an online order. The delivered package a fire tv device and bag of popcorn. Amazon plans on getting broader delivery to customers who are within a few miles of the. Acility tomorrow, the bank of england follows the fed with it own Monetary Policy decision. More of bloomberg tech next. Emily fun run is offering a homeowners infor california. After installing more than 500 such units in hawaii. The ceo says recent improvement in the technology and Cost Reduction but some run include backup storage with little or no upfront cost. We spoke about positive outlook for the Solar Industry under the incoming administration. The tax credit was extended under a republican led , a george bush era policy. It sunset after four or five years and that is what is so great about this industry. Reductions make it so to subsidize this industry makes a ton of sense. Its working. Its creating the jobs in bringing the savings to people. Emily since the u. S. Election results, there have been questions about how many of Donald Trumps policy promises will pan out. Joining us now is Susan Hennessy of the brookings institute. She focuses on Security Issues around Cyber Security and congressional oversight. Joining us from our Washington Dc Bureau as far as we know, security was not one of the top topics of conversation. Jobs, immigration, topics including infrastructure, repatriation of foreign cash. The meeting was friendly and productive. What do you make of what we know so far about this dialogue . Susan we have seen donald trump has taken a hostile tone during the campaign. Some were heartened to see the more conciliatory engagement that we saw today. I think now people will be focused on what president elect trumps policies are going to look like and how those might interact with Silicon Valleys business interests. Bear are starting out on they areote, but starting out on a friendly note, but they are talking about encryption and a wide variety of social issues. How do you expect Silicon Valley and washington to find Common Ground . Ofan there are areas commonality. Despite objections to onerous regulations. There are issues where there are wide divides between the president elect and Silicon Valley writ large. Those are issues that are going to emerge. Encryption is one of them, the access. Of lawful during the apple fbi controversy, donald trump suggested a call for a boycott of apple products, suggesting a strong antitech position. Whether they will push more extreme versions of legislation is a possibility. There are areas not directly related to Technology Policy but immigration, we keep hearing this term innovation. Donald trump tends to talk about job creation. Viewed hb one has visas attracting foreign talent. S being heated the president elect has immigration policy is quite consequential to that industry. Emily what about when it comes to Cyber Security . Half of yahoo has discovered on that is an addition to a hack attack in one,affecting this latest affecting a billion users. The cia is saying russia not only hacked the u. S. Election, but hackett to the benefit of donald trump. What sort of line do you expect the administration to take on Cyber Security given these hack attacks may have helped them . Serve toese stories highlight we are at a Cyber Security crisis point. This is an issue that has been asked the Obama Administration and they were never able to come up with a fully effective solution. Expectedwe would have if Hillary Clinton had prevailed to see some progress being made would be in that regulatory space. Require companies to adopt Security Standards it is possible donald trump will look into places like the commerce and somewhat ironically, thats a line president obama has pushed. Thely pushing the line that solutions and Cyber Security will come from the industry itself. Obviously a lot of open questions here. We will be watching. Thank you for joining us. That does it for this edition of Bloomberg Technology. Come, more to come on a chinese at maker ipo. Ofember all episodes bloomberg tech are Live Streaming on twitter. Thats all for now. This is bloomberg. Announcer from our studios in new york city this is charlie rose. Charlie Cyber Security has become one of the greatest challenges facing this country. Last february, president obama created a commission to address the growing threat. Earlier this month, the commission on enhancing Cyber Security announced its finding in a conference of report. It called for urgent action to enhance cyber capabilities. President obama last week ordered a review of allegedly election hacking. Joining me now are the commission chairs, sam polisario