This is fueled by a decline in tech and a decline in biotech. Many of these stocks that have been on fire like facebook and tesla and netflix posted a five percent drop. We will have more on the selloffs coming up. Zynga has hired a best buy Senior Vice President as its new cfo. They are trying to improve their business. The ceo says that he has a track record of turning companies around. Cbs named a replacement for david letterman. Stephen colbert will take over for the late show legend when he retires next year. They reached a fiveyear deal. There will be a new era of latenight tv. Now for our lead story. Ebay and carl icahn are ending their feud for now. Carl icahn want ebay to spin off paypal. They have a new paypal compromise. Ebay will add an independent director to the board. In return, icahn will drop his plan to add Board Members. Their chapter spoke with the ebay ceo. He asked, what kind of value do you see in ebay working with carl icahn, a shareholder who some view as a bully . From the beginning, i have had direct conversations with carl. In all those conversations, hes been respectful and thoughtful. Respectful, thoughtful, oneonone. Nasty, accusatory in public . I have not negotiated with him so i do not know that is the way he works. All i know is that in my direct conversations, he has been thoughtful. What has happened in this case is that the vice chairman of jpmorgan called me last week. He happened to be meeting with carl on an unrelated topic. He thought that we should spend more time together. We did over the weekend. We talked on the phone. We focused not on separation, but the fundamentals of the paypal business. We focused on the enormous opportunities in front of our company. When we did that, we found strong Common Ground and we will continue that. Was jimmy lee part of those discussions . Is he just started them. He is a trusted advisor to both of us. He encouraged us to spend more time together stop that is what we did. Here is an issue i want to raise with you. People are looking at this agreement that you breach of carl icahn. They might look at it this way. All an investor needs now to get a seat or an independent board seat and confidential access to one of americas most respected companies, and you cannot deny that ebay is respected, is a loudmouth, a twitter feed, a website, and less the 1 of the shares. It is 2 of the shares. He started with only 0. 82 . What we have done here is we have added a highly respected independent director. One who meets the criteria of our word. He was a chief executive at at t. He helped drive their turnaround. He is widely respected for his integrity and independence. He is an independent Board Members qualifications match our work. The ebay ceo with Market Makers erik schatzker. A moment for the history books today. We had a long chat about what actually happened here. As he was walking in, carl icahn started speaking on bloomberg television. He wanted to turn it up. He sat down and watched people interview. This is journalistic gold. The ceo was watching television as someone like carl icahn is talking about him. You get to watch the ceo being watched. It was interesting to watch his reaction. Lets take a look at some of the things he had to say. If you talk to them, they thought john was very effective. We must have talked 810 hours over the last few days. We talked about the future of the company. I find him to be extremely passionate. That is the kind of guy like. That is carl icahn on the change of heart. Then we talked to the ceo on what changed him. What do you think happens . How do they come to agree . The proxy fight was nearing a point where they would have to deal is. They would have to vote. Or they would have to arbitrate. Neither party wanted to do that. This is basically an issue of the clock ticking. Can we come to an agreement . They talked on the phone a number of times. They came to this agreement. It was apparently agreed upon by everyone. Carl icahn thinks that ebay and paypal are better separately. The ceo does not seem to be worried that he feels that way. He cannot walk back completely from the things he was saying, especially when it is significant. It would not be great. But what he is saying is that he has had these conversations and he understands this other. For now, he can accept the fact that paypal is part of ebay. The ceo let us in on the process by which they were dealing with this behind the scenes. He spoke to tim cook who also dealt with carl icahn as an activist investor in apple. He talked about how he did not get distracted along the way. What do you make of this . It is a very personality driven thing. You can have this thing play out in public. It looks like something that is very dramatic. These are smart people. They represent smart parties. Ultimately they want what is best for themselves. Icahn is an investor in ebay. They both want what is best for ebay. Smart people come together when they can do that in a oneonone fashion. It is more productive than the public sphere. Talking about the links they have gone to discuss whether ebay and paypal are better together, he has said it is better for ebay and better for paypal. It is the ceos position. They rallied around that. To some degree, carl icahn was swayed. There is a big story coming out about this overnight. You will get to read it very soon. I also want to talk to you about this tech selloff. Yahoo , amazon, king digital, they are all down. Is this the beginning of something . As we all know, market cannot go up forever. It has been an extended rally. There has to be a sell off eventually. Everyone knows that. What will the catalyst be . What you are seeing is a lot of stocks that have been the highest performing stocks in the last year or two. That is often the case with technology. It has the biggest selloff in a down market. This could potentially be bad news. No one wants to go public in a down turn. We will be watching that. Thank you. Coming up, my interview with drew housman of dropbox. Welcome back to bloomberg west. Im emily chang. Jony ive is getting a bigger role at apple. He is taking full control of the team that designed ios software. It is prompted by the retirement of a software designer. His team, they will now work directly with ive himself. The story of two women and dozens of samsung workers with rare cancer have become very public and south korea. Two new movies document several families fighting against the countrys against company. That is featured this week. I am joined by our correspondent from london. It is a gripping story that you have written, following closely one young woman who died of a very rare form of cancer who was working at the samsung factory. At the same time, another woman died of the same thing. Tell us what happened. Like you say, there is this common iconic moment in korea. Everyone knows the stories. They are very popular. It started with this young woman who was 18 years old when she went to work for samsung. She was recruited out of high school. She went to work for their semiconductor plant. This was in 2003. At the time, 80 of samsungs revenue came from chipmaking. This was the biggest chipmaking plant in korea. She worked together with this other woman at the same workstation. She became sick with a form of leukemia, a very aggressive form of leukemia that three in 100,000 people in korea die from. While she was sick and recovering, the woman who worked right next to her in a group of two at the workstation, she also got sick and was dead within five weeks of being diagnosed. It raised some alarm bells for the families of these women. The father of the woman who died when she was 22, he was a taxi driver. He took on the Nations Capital and its most powerful company. Samsung is responsible its revenue equals more than 20 of the entire gdp and south korea. It turned into a real david versus goliath battle. The company went into the courtroom and ultimately he won. His case is now being appealed. That is the story that is being told now across korea. It is a david versus goliath battle that has become quite iconic. He won . The courts decided that her work made them sick . It contributed to their illness. This type of leukemia is probably more associated with being caused by chemicals or radiation than any other form of cancer known to man. It is a very specific and aggressive and very difficult form of cancer. What happened with the father is that he tried to get Workers Compensation. He wanted it for his daughters illness and her death. When the claim was rejected by the south korean authority, he had to appeal that in court. And samsung intervened in that case. They challenged the family to try to get Workers Compensation. That is what made this a big battle. These claims would not have cost samsung a penny. They were also allegedly offering and paying money to families of other workers. They wanted them to withdraw these claims for Workers Compensation is not talking publicly. They wanted to disassociate from the group that was helping them. That made this an extraordinary story in korea. I should mention that they say, they are deeply saddened by the loss. We are concerned about those battling illness. We would like to reiterate that independent research has not found a correlation. In your reporting of the story, quickly, do you feel that samsung is at fault . I do not think they are at fault. Under the Workers Compensation system, it is not even a were firemen that they be found all. It is a question of whether or not the chemicals that are used in these are the conductor industry which is an incredibly chemicalintensive business, whether those contributed to or cause disease. All right. Cam simpson, thank you so much for sharing that story with us. You can find that article in this weeks addition of Bloomberg Business week. Dropbox is known for filesharing, but now it is focused on a filesharing app for photos. We will speak which are houston about carousel. Drew houston is launching chapter two for the company. He is launching a new photo app called carousel. Carousel is basically all your photos, all your life, in your pocket. It is great to have your photos on your phone, but you only have the photos from that phone. What about the ones on your computer . We bring it all together and we organize it for you. You see this timeline of your life. What if you could make things so easy and text 1000 photos in a second. That is the carousel does. This is part of chapter two of dropbox. What else is in chapter two . What are people putting in dropboxes . Files. These used to be in your house, things you would hold. Your photos, your document, things in your living room. Under your bed. Those things are now on servers. They are in your dropbox. That will only continue. We are actually not just building an app, we are building a new kind of home. We are calling it a home for life. It is your personal stuff, your work stuff. Which one is it . It is altogether. You are doing this standalone app strategy. Facebook is doing the same thing. It has had limited success with paper. What makes you think you can do this well . Obviously dropbox is phenomenal. What makes you think you can do other apps . We start with what should be easy but is hard. It started with me looking through my own photos. It was a late night at the office. I find this folder called 1999. All these pictures from high school. I have not seen these guys in years. I should show these photos. You count the number of steps it takes to share a bunch of photos, i forgot email addresses. It was a nightmare. It should be one click. Having a separate app from dropbox, it is a window into your dropbox. Lets just focus on that problem. Ironically it is about focus. Building one really great app for photos. Other good stuff for the things you do at work. Instead of one app that is kind of good at everything, that is the heart of it. You are formally launching dropbox for businesses. It has been amazing. Last time we talked was in november, we announced it. Companies and people want their home and work stuff to be separate. You should own your personal stuff and your company should own your work stuff. Companies have started using dropbox. Companies like under armour and spotify. Great companies. Historically, the cultural needs around an individual are different from what a company needs. Is the product going to be different . Should it be different . It is different for people who are responsible for administrating everything. I. T. Has a different set of needs and the person whos trying to get something done. They are responsible for making everybody more productive and they have to keep the company stuff safe. Dropbox for business is all about security and visibility and control. It is about i. T. Being able to deploy dropbox. They can handle a lot of these things that an average employee does not need to think about. Security is the most important thing for businesses. Where are you in terms of how you feel security is in the product. Is it as secure as you wanted to be . We are always doing more. You can never do enough. That is really one of the big purpose behind having a separate dropbox. We give i. T. Administrators all of that control. There are a handful of security features. We have audit logs and compliant things. All these things that will make an i. T. Administrator very happy. You just added Condoleezza Rice to the board. She must bring a lot to the table stop she is an amazing person and leader. She is so rare. She has had leadership roles in so many different contexts. She has worked for the government and has been a professor. She has been on Public Company boards. She can connect the dots in a you are watching bloomberg west where we cover innovation, technology, and the future of business. Dropbox is one of the Fastest Growing startups. Money is pouring in at a 10 billion valuation. Is it sustainable . In part two of my interview with dropbox ceo drew houston, i asked about where the company is seeing the bulk of its users . The majority of our users are outside the u. S. We see a lot of signups on phones. Dropbox is on every samsung phone. You can imagine the growth that comes from Something Like that. A lot of it is everyday people telling their friends about dropbox. People sharing folders were doing work with friends. Things like carousel, all kinds of reasons to share. They recently filed for an ipo. They spent 175 million on marketing. But they are losing money. How are you guys different . People are using dropbox at work. They will start using it at home. It is a much cheaper way of getting a business customer. It is powerful. There are all kinds of things you have to do to hire a sales force and do marketing. We do that too. When youre drawing from these out over 200 Million People who know how it works and they love it in the office and these are collaborating, it is a different conversation from cold calling someone. It is a lot easier of a concept. You are not spending as much money on marketing . We are setting this up for scale. That has always been part of the model. We want to get everybody to fall in love with dropbox. A lot of Companies Run better because they are dropbox. Any concerns about getting to the Public Market first . I think for us, we have already raised a lot of money. We dont really think about it that much. When you leave the gas station, you do not think about the next time you will go to the gas station. We focus more on the products that we can create. How do we get carousel out the door . We want better products for business. We will get around to all of that. For now, we are excited about adding people. We are launching products. 10 billion. That is your valuation. Your name comes up in a couple conversations. Why is that a fair valuation . Back when the internet first started, people could tell that it was going to be a new world. They thought it was going to come earlier than it actually did. Now it is like, how Many Companies can have as many people and reach hundreds of millions of people . That happens pretty often now. What gets us excited, gets our investors excited if the problems. We seldom a photo sharing or helping enterprises collaborate. Everybody in the world needs those problems solved. A few hundred Million People, but there are 2 billion connected Internet Users and that will multiply. The market is enormous. You are the guy who famously turned down steve jobs. How do you feel about that now that google is trying to do this and microsoft is trying to do this. That must be scary. We have been used to it. We have competitors in the early days. We have always had competition. That is nothing new for us. If youre going to solve a big problem, there are going to be a lot of people who want to do it too. How do we build great products . We want to make sure that what we are doing is different. Dropbox ceo drew houston. Venture capitalist get hundreds of pitches from startups every year. How do they decide which ones to bonds . We will take you inside a border to find out when bloomberg west returns. Im emily chang and this is bloomberg west. It is time for our office hours segment. It features maynard webb. We asked startups to send in pictures. We will tell you how we vetted those pitches. I am maynard webb. In addition to my responsibilities, i have created a Network Investment effort. We are going to get your presentations. We see anywhere from 1530 companies per week. The first thing we look for is industry focus. What was the most creative thing that you saw . Whether it was in our sweet spot or not . The one that was monitoring for pollution in china. It is a very big problem. How confident are you that they can pull it off . Their product is still in the design age. It looks promising. It is unclear. It could be interesting. They are young teams. It is hard to evaluate. We have had to lean on evidence of capability. There was an app. Did you try to download it . I had trouble downloading it. I like their last line. It always seems impossible until it is done. Did the chairman maynard webb one to any of the startups . I sat down with him to find out. 30 Different Companies pitched you based on our call for pitches. Im very appreciative of it. How many were good . Probably four that i liked a lot. One was the african angel network. I am really a fan of what they are trying to do with entrepreneurship and mentoring. I thought that it was not something we would invest in because we put our money into companies, not give it to someone else to invest. That takes the fun out of it. But i like what they are doing. I thought their expectations were crazy and unrealistic. They were better than most of the toptier firms. That is probably hard to do, coming out of there. But i liked what they were up to. What was the best one . That was probably the best one. I also like the smart kids at indiana. They were putting together wearable devices and health monitoring. I liked all of that. The app looked reasonable. I did not know the traction they had. I would have wanted to know their back story. If they did this because a parent of theirs was having trouble and they could have saved their life, that would have mattered to me more. Are any of these Companies Something you will invest in . I would say no. I appreciate that they all reached out. I think we couldve done a better job in the callout to explain our areas of focus. There was somebody in china that had a good idea for a new way to manufacture something and it was like, wow, that is cool, but it is not what we do. What are your areas . Enterprise. Anything related to software, cloud computing, mobile, internet marketplaces. It is pretty broad. It is almost all software or tech. You have to say no a lot. One of your coworkers told me that in the old days, you were the general. Describe that maynard webb to me. I know you a decade later. There is a tough guy in you. When you are in a company, theres always demand for dollars. There is demand for products. The list of things that people want to do far exceed your capability. Honing and developing the capability to say no and lead people and feeling ok about it and understanding it is a process is an art form. Over the years, ive had to say no so often, that i work hard to make it human. What is the process when you think you may want to say yes . We try to make it a very quick process. Either a yes or a no within days. Maybe a week or two max. I will look at the company, sometimes my calendar is the problem. There has to be a meeting with me. I have to get excited every affiliate said. We will vet it. Then we will say yes. It could be days if it is really hot. It is usually a process of a couple weeks. We tried to be faster. They are very responsive. Have you ever said no to something that you wish you had said yes to . We have an antiportfolio list. It is things that they wish we would have done and i said no. They have a list. We have not lost any sleep yet over the antiportfolio. We have been in deals that we do not quite get but we wish we had gotten them. We have since done well. Dont you give your team veto power . I felt that saying no. I want to take comfort in my money and not spending it. I dont want to break their spirit. You can see them jazzed about an idea. I would say no. What i have done is create a Silver Bullet were once or twice a year, is the team all agreed and i do not, we will still do it. They use that very sparingly. How many times have they used it . We have not pulled all the way yet. They have come close. I backed off recently and they were excited about it. I let them do it. It probably would have been a no. Maynard webb talking about his venture capitalist firm. I love having them here on the show. Well be right back with more of bloomberg west. Welcome back to bloomberg west. Meals cooked by renowned chefs and delivered to your door. They are serving 5100 of these meals in the bay area. They specialize in organic food cooked by inhouse chefs. They are raising funding. They are also getting funding from angel investors. Sherpa ventures is with us now. We also have the ceo of the company. Thank you for coming. I am a munchery customer. What are you going to use this money for its not just to party. No, it is for real work. We have an additional market. Beyond the San Francisco bay area. It is great to have them as our partners. [laughter] scott, you say this is the most exciting thing you have seen since uber. Trends like we are seeing with munchery, you do not see them very often. We both invested in uber separately. We saw Something Special. We saw Something Special in the metrics and in the founder. We are seeing the exact same thing. The metrics are unbelievable in terms of repeat usage. It is mindboggling. When you layer on top of that the founders and their story and unique background, it is incredible. The food comes on demand. I have never had a problem with it. You brought some salads and kid sized food. How it works is that our chefs produce the food and execute the menu. We have it that day. You can order that day or in advance. You can get it delivered that night. The food is reasonably priced. What are the margins . The margins are healthy. It used to be very expensive when we started. But with the volume we now enjoy, we were able to bring the prices down. At the end of the day, my coauthor and i are normal dads. We do not want to do the exclusive to someone who is welloff. We want to democratize it. We want to bring it to the masses. We work hard and we achieve a low rate. But there are other companies trying to do this. You guys are serving 5100 meals a day in the bay area. How do you see this scaling . Kitchen by kitchen and chef by chef. We are seeing the same thing as uber happening here. We see it expanding into other states. It is a national and global phenomenon. We eat three times a day. Everyone eats. We love to answer that question of what will we have tonight . From my perspective, yes, we rely on the chef. The secret sauce, no pun intended, is the Technology Behind it. Conrad and i are techies. Our past Work Experience raise it back to the table. They will scale that to the masses. I wonder how quickly respond to reviews. We let our chefs respond directly. The customer gets to write reviews on their specific items. Every one of our chefs have an ipad. They get notifications. They can respond to it and provide more information. They stand to learn and they love to get feedback. Is food a different thing in terms of investment . Is there an additional complication . It involves complications. The idea of data and physical things coming together. We like to think about software enabling the world. Take a step back and look at the first wave of the internet. It transformed media, the creation and consumption of media. Mobile commerce and the internet is doing that. It is really enabling things like this to happen. My wife, nina, orders our dinner at a stoplight. It is delivered within a tight window. Or i can order dinner and i am the hero. [laughter] as long as you can handle it, you are the hero. My husband cooks dinner. The customer can add random item. A friend is coming over, so they add an item. They can say, they normally have ordered at 5 00 p. M. I am running behind, so make it 7 00 p. M. I am going to my friends house. Our Technology Allows for that stop seattle is next. Thank you both for stopping by. Thank you for bringing me food. I appreciate it. It is time now for the bwest byte. We focus on one number that tells a whole lot. Jon erlichman is in los angeles. Save me some of that food or client to me. I have some for you. 8. Amazons jeff bezos said that they are working on the designs for the eighth generation of their delivery drone. There it is. The video that got all the attention. They are testing the sixth generation and designing the seventh and eighth generation of these fine robots that may deliver our food and jewelry one day. [laughter] maybe we will get munchery by drone. When will this come to my doorstep . The fact that they are designing the eighth generation the technology is there. The faa needs to ok it. Amazon came prepared. When they first came out with this announcement, they had a lot of q a for people to read. They make it very clear on their website. They think things will be figured out by the faa by 2015 that would allow them to roll this out. They are thinking 2015. Maybe that is the time for them to watch. I like that. I am about 2015. We will be watching. Jon erlichman, thank you. Thank you all for watching this edition of bloomberg west. We will see you later. 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