How the russians may have helped him more than we think. He will talk about the latest in the ukraine, coming up. Samsung unveils its first verbal wearable devices, Running Software that is not google. Two smart watches, and one fitness band. They also showed off the Samsung Galaxy s5. A look at what the new phone actually does. Sam grobar got his hands on one. Take a look. This is the new Samsung Galaxy s5. I want to show you five things that are new. The phone was announced today. For starters, it is a larger display. This is 5. 1 inches. The old galaxy, only five inches. Also, you have a fingerprint sensor on the bottom. Sounds like the fingerprint sensors we have seen on other phones. On the back, there is a heart rate monitor. You put your finger here, and the phone will tell you whether you are about to have a cardiac episode or something. There is also better materials and a camera along the back of the phone. Some criticisms from the galaxy 4 and 3 that they appeared too plastic. It is also water resistant, up to 30 minutes in up to one meter of water. This thing will be just fine. Other phones, you drop it in a bar bathroom and sam grobart is with us from new york, as well as cory johnson. If i drop my phone in the bathtub, it is ok . Or in a margarita. Not that i have ever done anything like that. Never. This phone is water resistant and dust resistant, a standard called ip 67. It can withstand being in one meter of water for up to 30 minutes. It is not like a diving watch. That is a true innovation. That has me more interested. The heart rate monitor if i get into a heated conversation, i can check my pulse . Right on the back of the phone. And shortly thereafter. I am at 67 beats a minute. They have tended to follow a lot of other innovations. The heart rate stuff i am wearing a heart rate monitor on my wrist. Just in case anything gets tense around here. Or for when i run. There were heart rate monitors you could strap to your body. The last phone they introduced had a barometer in it. Are they just throwing things into the blender . This has been kind of the criticism of samsung phones. They often throw every possible feature they can think of and develop into one device. The company definitely seems to be aware of that criticism, and is not so much promoting 48 from things you can do. They are, however, focusing on health and fitness. That relates to the galaxy as well as other products they announced today. Bigger screen, better batteries. Gimmick features. How much cooler do you think the phone is than s4 . I do not think it is groundbreaking. At this point, it is hard for me to think of what would be, even for apple or some other manufacturer. We seem to have reached a certain plateau. In effect, these are small boxes that have modems and radios and displays in them. You make some improvements here and there. That is great. But the big stuff, for the most part, has happened. About apple what are we expecting this year . I know we talked about a potential larger phone. You have spoken to the executives there. Is that going to happen . They told me their entire plan for the next five years. I am going to share it for you right now. Between us. Just between us, sam. There has obviously been pressure. The market has shown a real desire for larger displays. You wonder to what degree apple is going to move in that direction. It seems like they would want to. As far as what else they are up to, who knows. One of the things we do know our colleague knows they are working on a wearable device. Samsung has generation two of their wearable watch. And a fitness bracelet. Last year, they launched the galaxy gear. Now they have the galaxy gear 2, the galaxy gear 2 neo, and the galaxy gear fit. The original concept, everybody agreed, was kind of clunky. Even samsung acknowledged the first one was not ready for prime time. It rocked a fight to the ground. These are lighter and more elegant looking. I think the galaxy gear fit, the smallest of the three, is the most interesting. It does not have the full features of the other watches, which can be loaded with apps. But since you will be carrying your smart phone anyway, i do not know how much you need to have on the wrist itself. We will see if these get better reception than the original galaxy gear. Thank you for breaking it all down for us. Coming up, we are going to be talking about Mark Zuckerbergs keynote in barcelona. 19 billion. Days after. How did the founders feel . Welcome back. Mark zuckerberg gave a keynote address at mobile World Congress in barcelona, speaking with David Kirkpatrick, the author of the facebook effect. Fresh off the 19 billion acquisition of messaging platform whatsapp, he speaks about the high price tag, and his goals. A lot of the goals we have with internet. Org is to create an onramp for the internet. With a fixed lens you can pick up the phone in the u. S. And dial 911, and get access to basic services. If there is a health emergency, a fire, a crime, you can get help. A similar dial tone for the internet. It is a set of basic services we think should exist, whether it is messaging, the weather, food prices, wikipedia, basic search, basic social networking. These basic Services Everyone should be able to access. They have things in common. It is like 911. The internet has more potential than dialing a number on a phone. The services have things in common. They are all textbased, for the most part. Low bandwidth and cheap to serve. Offering them for free or cheap is a reasonable business proposition. The second is that a lot of them, especially things like messaging and social networking and search are ways to get more content. You are never going to have streaming media be basic services in a model like this. But a lot of what people do through Services Like facebook is discover things like videos or news, reasons you would want to consume data. If you have access to these basic services, that is going to answer this catch22 question. It makes it clear here is why i should spend my dollar or two on getting a data plan. It could fuel more investment into the whole industry, to build up more infrastructure. One of the unfair economic realities is that the people who have the vast majority of wealth in the world are the billion people who are already on facebook. When i talk about this with my board of directors, and ask them to spend billions of dollars on internet. Org over the next few years, they rightfully ask me how is this going to be profitable in the near term . I cannot construct a model that will add up in the nearterm. The ad markets in these countries do not exist in a huge way yet that is going to make us break even on this. The time that we typically make investments but i believe in this. This is why i started facebook. I built the product originally because i wanted it at harvard. The vision was that someday, someone should help connect everyone in the world. Reaching a billion people was a moment for us where we took a step back. What are we here to do . If we can help connect a billion people, are we going to spend the next few years getting to 1. 2 . We will do that. We will do that on the way to something else. Other us to be something bigger. It is this vision of connecting the world. I think we are probably going to lose money on this for quite a while, the Different Things we are doing. The reason i am optimistic is, just like social networking, early on, the reason we did it, even though bloggers and folks are saying, this is just a fad, and it is never going to make money i never cared about that. I believed it was this important thing. I could not connect all the dots, going forward. I did not know enough about the world or business to do so. I just felt it was an important thing. I still think it is good for the world. We will find a way to benefit in some way. With internet. Org, there is no clear plan i can say today. Is it going to be good for facebook . It is clearly good for the world, global health, people in these countries. I think you can see that. Over time, if we can deliver this, i think it will be good for us. And your board agrees with us . They are on our board because they believe in our mission. You said it was primarily to help fulfill this vision, but you paid 19 billion for it. I am trying to put myself in the head of the board. They probably agree that longterm making the world more connected and open is a good thing. But they are numbers people, a lot of them. That is a Huge Investment you just made. It sounds like the return is very longterm. Is it the right way to think of whatsapp . It is not the way it has been discussed in the media, as a connect the world sort of tool. It has been talked about as an advertising platform. The first piece is, it is a company by itself. And then there is the strategic value, what we can do together. I think by itself, it is worth more than 19 billion. It is hard to exactly make that case today, because they have low revenue compared to that number. There are very few services that reach a billion people in the world. They are much more valuable. I could be wrong. There is a chance that this is the one service that gets to a billion people and ends up not being valuable. I have looked at other messaging apps that are out there, that already are monetizing at two dollars to three dollars per person with early efforts. I think if we can do a good job of helping whatsapp to grow. This is going to be a huge business. Independently, quite a good bet. Why were we excited to do this together . I was excited because of the internet. Org vision. I think clearly we can do this at a level of working together. By being part of facebook, it makes it a focus for the next five years or so, purely on connecting more people. They were going to have to focus at some point more on building out the business model. They were going to have seeds of that with the subscription model, which was very promising. What we were excited about, and what i think is the bigger opportunity, is for them to go out and connect one, two, 3 billion people. I think we will be well on our way to realizing this vision and trying to connect everyone. And we are on our way to helping achieve the internet. Org vision. Speaking from barcelona, Mark Zuckerberg declined to comment on a move to purchase snapchat. He did say after a big purchase like whatsapp, you are probably done for a while. David kirkpatrick gave us his view of what he took away from that conversation. I want to get straight to barcelona and mobile world conference, where David Kirkpatrick just finished interviewing Mark Zuckerberg. A fascinating conversation watching you with him on stage. You also wrote the book on facebook. What is your biggest take away from what he had to say today . I also did a lot of preparatory interviewing with tim and his team. I will say it is amazing, the continuing growth of the scope of the facebook vision. I do not know if somebody said do you have anything else planned for 2020 . Zuckerberg said, isnt this enough . He wants to connect everybody in the planet. The one company to be taking on this project it is important and amazing. I am surprised they have taken this step. I think he articulated it ready well and pretty passionately today. I was wondering an interesting moment where he talked about modeling profitability. It gets after my own heart. I wonder how much of that is a glimpse into the way mark thinks about business, which is to say not at all, to think about opportunity, not profit, or if that was a span to shareholders to not look for any payoff yet. You know what . I think it is perfect for that company that they have cheryl there, and mark. If he did not have cheryl, he could not think this way. But he has a close partner who is a master business person who got the company on an extraordinary profit trajectory that he does not have to worry about, day to day. I think he continues to focus on product improvement. It does give him the luxury of having a surprisingly big picture, optimistic, aggressive, futuristic vision for how facebook can play a positive role, literally, in the planets future. But it is only because cheryl is there that it is possible. I was trying to push him about his board. Sorry, finish. I was just saying he said some funny things about his board and what they thought about this. I was trying to push him on that. I did not get very far. I am sure people on the financial side and on the board who have some reservations my own opinion is, it is definitely reasonable to say it will have a longterm payoff. Getting more people involved in the general realm of activities facebook is one of them. Google is another. I understand you asked him at the end if he wanted to talk about snapchat, and he said no. What do you make of that . There was a question from the audience saying, what about snapchat . I repeated the question from the audience. He said, this is enough. I said, with a 19 billion deal, probably, let us take some time before we do anything else. I said, with your company, you never know. If he can buy Good Services that will help expand his vision, i think he will do so. I think it is a very different kind of thing because it is for developed countries. It is an elite rich people service. It is a different universe. There was a discussion about integration and how the product might work. Sort of the procter gambleization of facebook, with parallel services that do not interact on the frontend. How do you think facebook thinks about Services Like instagram, whatsapp, and facebook . It is becoming a portfolio. There is no question. I think it was cheryl who recently called facebook our primary app, which was a stunning direction to go. They are really starting to think about those other services as nonequivalent, freestanding, parallel entities. The way mark was talking, there is no question he is also looking at it that way. One of the questions you may not have heard was, a dutch journalist this is a very european question was asking about privacy, and whether user data from whatsapp will be exposed to facebook. He was adamant that it will continue operating the way it always has. Reinforcement of the idea these are parallel things that will keep going their own way. I understand there was some discussion about china in the q a. Does this change the facebook prospects in china, the acquisition of whatsapp . There was an article today about how whatsapp operated in china. It is not exactly a trojan horse. For facebook to have any Services Operating in china is an advancement of zuckerbergs vision. David kirkpatrick from mobile World Congress in barcelona. Coming up, more analysis of what zuckerberg had to say. You are watching bloomberg west. Mark zuckerberg gave a keynote address at mobile World Congress in barcelona earlier today. Among many topics discussed was the 19 billion acquisition of the messaging platform whatsapp. By itself, it is worth more than 19 billion. They have little revenue compared to that number, but there are very few services that reach a billion people in the world. They are all much more valuable than that. I could be wrong. There is some chance that this is the one service that gets to a billion people. I do not think i am. He says there are economic benefits to providing Free Internet access to emerging markets. Here he is on the profitability of that project. We still have work to do, but we are early in tuning this. This is what these partnerships are. Early on, it starts off, and it is not tuned. You spend a little more than you are making up front. What we have seen in the rate of improvement we are confident this will get to the point where it is highly profitable. Cory johnson and i spoke with bloombergs contributing editor as well as a former facebook executive, allison rosenthal. I asked rosenthal if whatsapp really is worth more than 19 billion. It is growing at a million users a day, at 72 daily active users. People are getting on to the Service Every day, talking about the things they are working on, chatting with one another. There is value to that, whether it is 19 or 15 or 25 billion. You know more than anyone how difficult it is for an app like this to hit the mainstream and stay there. A guest said, he does not know what he will be using on his phone in five years. Why is this worth it . Whatsapp started in 2009. They were the first crossplatform messenger to emerge. They own exogenous relationships. Emerging markets outside the u. S. They are growing like crazy. They have been building and building. It is not going to go away overnight. The numbers and the lines show quite the opposite. I think this platform in particular is an amazing one. The numbers speak for themselves. What is interesting is not how many users they are using, but what the business really is. Yes, they are taking the money from the carriers. What do you make of, when you see the valuation some around, the types of metrics facebook might be thinking about . If you were hiding in the wilderness last week, looking at the universal gravitational constant 42 per active user, you can take those numbers and look at other revenue purchased in the late 1990s. Microsoft bought hotmail at that time for around that price. We know companies at this stage do not generate material revenues for some time. I am not troubled by that at all. Comparing it to the size of the twitter active user base, you see there are opportunities to produce. Material revenues in very short order, depending what dials they decide to turn. The deeper issue is morality. It is stunning to see a company produce a network of this size in such short order. Why cant that happen serially, over and over . Parents join whatsapp, and a teenager says, i move onto the next service. This will be a perennial problem for all these services, maintaining persistence. That does not mean they should not have bought it. I think we will see a series of acquisitions like this over time. I want to push back to you. You were at Goldman Sachs in the dotcom bubble. The hot number was not even users. It was eyeballs and page views. Those were serious metrics discussed around mergers and acquisitions. The number of users to me is silly without revenues attached to users. I do not see getting there. I do not want to be debbie downer. This is hard to get to. I am quite sure there was no dcf underpinning your analysis. It is a growth story. Twitter mentioned as comparable you start to key in on value in some places. What you make a good point. On price but not value, i think whether or not facebook ultimately introduces ads directly into whatsapp they said they will not. I believe that. They will figure out a way to make money. These are users. These are Customers Using this product. There has to be opportunity there. What about making money on internet. Org . His mission has been to connect the world. That sounds benevolent. He talked about presenting the plan to his board. He said, i do not see an immediate way that this is going to be a Good Business for us. But i have to believe it will be. In the middle to long term, facebook ends up being the utility, the pipe, the Underlying Network to every time someone connects to the internet. 90 of the time, 50 of the time. Is that consistent with the way google and apple control it . It will be very interesting to see how internet. Org works out. The message me coo and former facebook executive with our bloomberg contributing editor. Carl icahn writes an open letter to ebay shareholders to spin off paypal, while criticizing the board of directors, especially Mark Andreessen. Welcome back. Carl icahn is getting personal, taking strikes at Mark Andreessen, board member of ebay. What he is really upset about is the whole thing that happened with skype. Andreessen bought skype and flipped it to microsoft at a much better price, ripping off shareholders of value. Skype was going to be sold by donahoe. Who i think was either naive or asleep at the switch. I will say this now. If i had been on that board and my representatives have been on the board, andreessen would not have bought skype. Does carl icahn have a point . He has been advising ebay. When you see Mark Andreessen buying those assets, it is a concern. It is a criticism not just to him, but to john donahoe. Does this happen elsewhere in the industry . Very unusual. If you are the shareholder of ebay, and you look at the value that skype was able to get in the open market, i think it is a great concern to ebay shareholders. There are assets at ebay that ebay is not monetizing. They bought skype for 2. 5 billion, and shortly afterward, sold it for 8. 5 billion. Ebay sold it and did not make much of a gain of anything. It was obviously worth more to microsoft than it was to ebay. Ebay has said carl icahn is taking things out of context. Mark andreessen has not responded, although he has been tweeting up a storm about net neutrality. The rsa security conference kicked off in San Francisco today. Cyber security, big topic Edward Snowden. We talked about everything from snowden to Cyber Security to the latest security flaw in apple products. Take a listen. We are trying to encourage them to share only cyber threat information. We said, if you are sharing in good faith cyber threat information, we should encourage that behavior. No different than if you are on the subway system and see something bad happening. We want you to say, stop that. Same thing. The government is not on privatesector networks, so they miss a lot of what the chinese are doing, the russians are doing, when they are trying to steal information, what the iranians are doing on your networks. A robust sharing of those threats can allow the private sector to protect itself. That is the endgame. Edward snowden hero or traitor . Over 95 of what that nsa contractor stole had nothing to do with privacy. It had to do with defense, shortterm and longterm strategic threats. The army, the navy, the air force, the marines. Had nothing to do with any question of privacy. It had to do with information that was very damaging to our military. Anybody that looks at it in a logical way, looks at the information he stole, it is hard to think that giving it to our enemy was anything less than treasonous. You have implied that Edward Snowden may have gotten help from russia to carry this out, that the technical capabilities of what he did were beyond his own. Why do you think that . If i look at this as a former fbi agent, you look at the whole history starting at about 2010. There is a large degree of suspicious behavior leading up to his decision to steal information. 95 of it had nothing to do with privacy issues, or what the nsa was or was not doing to u. S. Citizens. It had everything to do with information that protects the united states, allows the army to protect soldiers overseas, the navy to protect themselves in the south china sea. That information is something that he may not have even understood existed. We are very curious how this scrape tool was developed to go after pieces of information he may not have any understanding or even existed on the network. Lots of questions we still have to get answered. I look at the totality and come to the conclusion i am not sure we have heard all of the story yet. The ukraine what is your biggest concern . I think the dissolving of the ukraine is not in the interests of the european union. I do not even believe it is in the interest of the russians. I am not sure they know that yet. Do you think the russians could come in . I do not see putin using troops. I see him exerting influence through Intelligence Services and other ways to cause a split. I think he believes he cannot afford to lose all of the ukraine. I have heard it said that russia without the ukraine is a country, but russia with the ukraine is an empire. Knowing how putin has behaved, i think he would like to keep that sphere of influence within russian hands. About apple, a big security flaw revealed over the weekend. They did issue a fix. There is one on the desktop operating system. We are waiting for a fix on that. When apple released the fix, there was no red alarm, update your phone right now. They did not give a lot of context about what was wrong and why we needed to perform this update. What do you think about that whole situation and apples responsibility to its users when it comes to security . They need to fix whatever anomaly provides for a vulnerability in their system. I think they did that. I think, through time, they will correct the vulnerability. At the same time, i do not know if they did not want to advertise to every bad actor out there there is all sorts of bad actors try to take advantage of that vulnerability before they could get it fixed. It is always a balancing game. You are going to have vulnerabilities, not on purpose, but by the complication of how the software operates. The House Intelligence Committee chairman, mike rogers. During the Aspen InternationalDesign Conference in 1983, steve jobs gave a famous talk where he predicted Technology Like the ipad and wireless networks. At the end of the conference, attendees buried several items, including the lisa mouse, which jobs used to navigate his talk, in an aspen time tube, later known as the steve jobs time capsule. And it came time to excavate, no one could find the tube. For 30 years, it has been missing. Until now. The stars of a National Geographic channel show called diggers were able to unearth this priceless artifact. Guys, how did you find it . We had a lead, or our producer did, about the time capsule that was supposed to be dug up after 20 years. Nobody went after it. We tried to give it a shot. We wanted to find it. I want to have you explain the show. What is diggers . It is a show about us, basically. We go around the country and dig up different artifacts that are lost in time. They usually tell a story about something. Anything from billy the kid all the way up to what some people consider to be a modern thing. The time capsule that was buried in 1983. Yet it was intended to be dug up. It was intended to be dug up in 2000. It was kind of lost. There was some new landscaping. Everybody kind of forgot about it and we come along 13 years late, but we still found it. Kind of an odd thing for our show. We are used to using little metal detectors. We go find maybe civil war bullets. In this case, we found something really big. Tell us about the process. How was the digging process different than some of the things you do . We are looking at video of you guys excavating quarters. We usually go after one item, one hole for one item. It is weird for us to go after a big object like the time capsule. It is exciting. There is pressure involved because there is a lot of time, a lot of money, a lot of phone calls involved with that hunt. Normally, that is not what we do. Something big comes with a reward, obviously. Is this essentially antiques roadshow with a shovel . Are you trying to find something worth something, or historical artifacts . This mouse is both. There are a lot of things that are worth absolutely nothing, and yet they have extreme historical importance. That is really what this show is about. Someday, we may get lucky and find a pirate chest full of gold. The chances of that happening are miniscule. This is really about the historical stories that come about when we dig this stuff up. There are thousands of artifacts. They are all going to the aspen historical society. They will be put on display for everybody to enjoy. I understand you have the lisa mouse with you on set. Can you tell us what condition it was in when you found it . This is the actual mouse that Steve Jobs Used at the conference. He actually unplugged it, gave it to a guy that was there, who donated it to the time capsule. Everybody at the conference donated stuff. There is literally thousands of stuff crammed inside of this old tube. But this was the prize, right here, steve jobss mouse. The cohosts of the National Geographic show diggers. A new season premieres tuesday, february 25. For more information on the time capsule collection, visit aspenhistory. Org. The Second AnnualBloomberg BusinessweekDesign Conference will bring together worldrenowned designers on march 10 in San Francisco. Ahead of the event, we caught up with some of the speakers. This is the man behind products like the fitbit and the dell studio hybrid. That is a big question. What is design . Design is the act of taking something usable, practical, and needed, and making it into enjoyable, culturally grounded, human. Most people tend to look at design as a style, as a vision. It is actually a lot more than that. It is the experience of how it is made, the materials, how well put together the object is. It is way beyond the visual. I love these moments where suddenly things click and you have a very complex problem sorted out. You have this physical, intuitive feeling that this is a great idea. The second moment i like is when something we do really changes the way a company or an industry deals with technology. In the old days, there were designers and engineers. Designers were supposedly the superficial types, and the engineers were inside out. Here, things are mixed up. Our designers are very savvy about engineering values. We make things simple, clear, and obviously looking awesome. That was the designer of new deal design. For more, go to Bloomberg Businessweek design on the web. That is it for bloomberg west. The opinions do not reflect the opinions of bloomberg or its employees. The following is a paid presentation for the nutribullet. Special tv only offer. Stay tuned to tell you can find an amazing lifechanging bonus. That is right. Details just ahead. My muscle aches started to decrease immediately. The first night i used it, i