Releasing games to mobile users. They have a huge, installed base. Tons of connected devices. We dont have content on those devices. We are focused on providing great experiences on the home console. A pretty order for a new game called Super Smash Brothers are breaking nintendo records. Marissa mayer makes another aduisition, buying a video platform. It will strengthen advertising making it the largest in the united states. They paid 640 million to get it. A comeback for space hosting. Big gains in quarterly revenue and profit. Wasfuture of rackspace confusing. Alibaba smashes records for china single day sales. In billion dollars in sales 24 hours. Billion,hat to 2. 9 those are big numbers. Here is the vice chairman talking about making it a global event, not just a chinese event. We have International Strategy that is focused on crossborder. You see a lot of evidence of that on singles daytoday. A lot of retailers from around the world are selling to 300 million chinese consumers are shopping on our platform. We have Chinese Companies that are Manufacturing Products that can sell all over the world. We are seeing crossborder flow as well. That is exciting for us. International expansion could depend on a lot of things, including the possibility of a partnership with paypal. An interesting possibility for ali baba. Joining me as gordon chang, to talk about this possibility of singles day, and what it might mean. The author of the collapse of china. Gordon, the single day phenomenon is simply amazing. I know anytime we talk about anything chinese, the numbers are just so big. Over 9 billion in a day, that is incredible. We have to put this in context. The National Bureau of statistics in china reported that online sales in the first nine months were up 49. 9 . What we saw today for single state was up 61 . Thats really good. But weve seen other retailers report very large increases in online sales. The other thing we have to remember is this is not just one day. Retailers on alibaba have been taking preorders since october 15. Weve been talking about 28 days worth of sales. They record all those sales on that date, so they goose the number. Thats exactly right. We are talking about heavily discounted products. The discounts were at least 50 . Some of them were in excess of that. This is the teaser day to get a lot of people in the door with these crazy sales. In regards to these crazy sales, i figure that any company, if they really want to move the top line, they can. Profitability is key. In this case, the number is so big. When they made a big deal about it last her, they were trying to hype the ipo. This number suggests some serious changes in the world of ecommerce in china. It certainly does. Ecommerce is doing very well in china. On the other hand, consumption and retail sales altogether are probably falling. The National Bureau of statistics as in the first nine months of the year, retail sales were up 12. 0 . Thats probably not true. For instance, walmart reported that in its most recent quarter, its International Division had samestore sales growth every country in the world, except china. Samestore sales fell 1. 6 . Unilever says q3 china sales fell. Their sales fell around 4 for the first nine months. That shows consumption overall is in trouble. The retail sales are doing very well. Alibaba is eating their lunch, it sounds like. Jack ma was talking about what single day had to say for him. I want every type of enterprise, be it small or big, urban or rural, to be able to dissipate. To participate. Interesting thats not having as much of an effect on Global Markets as much as chinese specific products. This is the first year alibaba made a big push to have foreign products on sale for singles day. I will see this rolled out for next year, and clearly, we have Companies Like costco and tesla are selling on alibaba to try and test the chinese market. Theyre going to be additions to the alibaba platforms with new products coming online. I think that is where the real growth will be, not in overall consumption. One wonders if this is what the Chinese Government wants. A Civil Company dominating 80 of the commerce. Probably not. There is another company that is better managed and has a marker has a much more coherent strategy. They are also having doubledigit sales increases. They have an easier path to success than alibaba. They are the social media king, and it is easier for them to monetize the social media base that it is for alibaba to take its ecommerce space and go into social media and sell to new social media customers. This is a really interesting contest between these two companies. I think . 10 is probably the Better Company this point. Jack ma isnt as good a manager, but he is trying. Working so hard he doesnt have time. Listen to what he had to say about his ability to shop for clothing online. My clothes are all bought online. My family does a lot of online shopping. I dont have time to shop. Do you feel bad for him . I feel really bad for jack ma. Hes charismatic, he has wonderful ideas. He is taking alibaba away from ecommerce in china. I think he realizes that ecommerce only has so much to grow. Hes going into hollywood, doing all sorts of things. That is going to be interesting to see this company diversify. It has to diversify. Its not aggressive, its really defensive on his part. I think he has some pretty good ideas. I wish he had more time to buy close. Thank you. President obama give is big news yesterday, putting pressure on the fcc for net neutrality. Saying it must protect the open internet. What will the fcc do . We talk with an important vote on this ongoing debate. Dont miss our interview with david marcus, later this half hour. Im cory johnson, this is bloomberg west. President obamas party suffered losses in midterms. He has been speaking out recently about net neutrality, calling on the fcc to lay down the strongest rules possible to protect the open internet. He is urging the fcc to regulate the internet the same way it regulates phone companies. Joining us from the techonomy conference is fcc commissioner jessica. This issue of open internet has resonated like nothing i can think of entelechy medications in telecommunications. Why do you think it is striking such a nerve . I think the internet is a part of all of our daily lives. Whether it is wired or wireless, everyone is using it everyday. This feels personal for people. Can you define for me title ii, that says whats this back of the envelope what is it mean . The fcc operates under a bunch of laws, including the Telecommunications Act of 1996, and the Communications Act of 1934. The challenge is finding a legal home for those services in those laws. There has been criticism about the fcc getting involved in any way. Senator ted cruz was out yesterday saying this is the Obama Administration trying to regulate the internet. Is the internet already regulated . Are internet economy is the envy of the world. What has made it that way is the foundation of openness. Until january of this year, the fcc had policies in place to make sure that openness was sustainable. And that companies could continue to be successful. I think with the fcc is trying to do is reassess how to put those policies back in place and make sure that openness continues. Im not going to ask you what your vote is going to be, but what do you think the timing is here, and what is the weight for . I hope we do this as soon as possible. 4 Million People have written the fcc to talk about these issues. When i was appointed to the agency, im not sure i would have been confident that 4 Million People knew what the fcc was doing. I think we have had a lot of people speak up on this issue, including the president. I think we can move forward without delay. What you think of john olivers bit on this . I think i will just say it was entertaining, and leave it at that. There is a lot of lobbying money spent on this as well. When you make these decisions, do you consider the effect on the existing players . Or do you try and imagine a black slate of what the world might be like . That is a good question. When it comes to the internet, and its future, we are all invested in its vitally important that the fcc listen to every stakeholder of every stripe. That means the 4 million americans who have written us. That means big and i companies. Big Internet Companies. It also means the providers of Broadband Service in our economy today. Why should companies that invest the money provided to them by investors and shareholders have to be regulated at all . Why shouldnt we let them decide what is best for their consumers, and if people dont like it, they will pay . I think we are talking about a light touch regulation. Nothing overbearing. It is an honest acknowledgment. These merit some oversight. Do think its more necessary for a big existing company or for startups we havent imagined yet . I think that oversight is about making sure that everyone has access to the internet and all of its functionalities. It is becoming an essential elements of everything in our civic and commercial life. That speaks in the near term to the companies who are present. It would be a terrific thing if we could develop more competition in our broadband markets. That is something i hope we can do as time goes on. Let me ask you about that. On the local level, there isnt much competition. In certain locations, people dont have a choice if they want highspeed internet. Are there things the fcc can do, or is that a technological constraint . Or a constraint of comedy bulldozers can terra, need front how many bulldozers can terra how many front yards. It is a tougher question. It involves technology, economics, and the law. We want to make sure the law is in a position to welcome new providers of services, no matter what the technology. We want to make sure that the expense of building out to those locations can be lowered through changes in policies. We have to ignore knowledge that we do have challenging areas in this country, where the population densities are limited. The number of providers interested in making a Business Case and serving them is going to be limited also. Between us, you want to tell me who you are going to vote for for title ii rig elections . Regulations . I support network neutrality. Jessica rosenworcel, we appreciate her time. Bloomberg west, will be right back. Welcome back to bloomberg west. Im cory johnson. Companies are leading a charge in the private sector, into space. With two rocket disasters in the last month, investors and investors are positing. We sat down to talk about the future of space exploration. He joined emily chang at the techonomy conference. They talked about satellites connecting the worlds of the internet. Something that didnt make business sense 20 years ago now does. Hundreds of satellites in orbit continuously, circling overhead no one is staying fixed overhead. They provide broadband. The latency is shorter. You can provide broadband to the entire planet. Every village and school, every well platform, every plane come every plane, every boat during. Who wins google, facebook . They all win if someone provides it and it is net neutral. All these companies would agree that if somebody provides a pipe to the home in every village that is independent of the Television Companies and cable companies, its just a third way to get to everybody, that will be wonderfully democratizing. No one can charge a price premium. If it doing it, will they put a facebook in your face . Every engineer within facebook and google realizes that wouldnt be right. You are an investor in spacex. Youre a space enthusiast. How concerned are you about the recent crashes. How much does that set back the private space industry . It was a tough week for those companies, and some of the Companies Launching satellites on their vessels. My heart goes out to the test pilot that perished. It is those brave folks that have the greatest risk that have made the development of airplanes and rocket ships possible. If they werent putting their lives and the lines, we couldnt advance the science. The broader industry isnt impacted. In both cases, the failures were idiosyncratic. Every evidence from the early investigation says this was an unusual wing structure that released too early, and unfortunately, to disaster. It is easily fixed, but it is unique to that vessel. No other rocket airplane uses that technology. So it is not a failure mode that is generalizable. They will fix it. They know how to make sure that never happens again. We talked about timing in the future. When our tourists owing into space going into space . The question is how long will elon musk live on mars . You already have tourists, but they are playing a high price paying a high price and flying on russian vessels. Going with in the next 10 years to orbit, mars the next 20. Some may say earlier based on they are handicapping. Its kind of like in the early days of apollo, some people scratch their head and said is it possible . It is possible, and the longer you wait, the safer and cheaper it gets. It will be no more expensive or dangerous than flying in airplanes. It should be cheaper to fly a rocket around the earth then to fly an airplane around the earth. This is a matter of decades . Decade. I fully intend to be flying around earth, and within 20 years come around the moon. I want to fly very low. You can be in orbit on a spacewalk, just 5000 feet above the surface, like you were shooting through canyons, and you can see everything. Weightless, for as long as you want. That is going to be accessible and affordable to just about anybody who dreams big and wants to make it. Have you been to space . I have been in zero gravity. I love weightless this. It is a lot of fun. The photography of there is breathtaking. That was actually a fireside chat with Steve Jurvetson and emily chang. David marcus, transforming facebook messenger. You are watching bloomberg west. Im cory johnson. Facebook messenger has 500 million monthly active users according to david marcus, who. Oined emily chang today emily started by asking why he thought being a ceo is overrated. It is overrated because most of the things you do every day are not actually that much fun. That is the truth. That is what you do for a living. There is nowhere to go. , if thats you do for a living, you get to a place where there if you are an entrepreneur, you would rather go build things than manage things. Thats why i couldnt resist the opportunity to go build something large, at the scale of one billion plus people. I wasnt able to resist that. You are managing 15,000 people at paypal, 100 people at messenger. Thats great. How do you feel seeing everything that has happened in ebay spinning off paypal . How do you feel about this decision . I feel great. When im happy, i go to work every morning. We have a Phenomenal Team of young people who dont know what is impossible yet heard. We have an opportunity to build something that we ship every other week to hundreds of millions of people. The feedback loop is extremely short. The impact is huge. Honestly, i am super happy. I have no regrets. When you got there, how many users did messenger have . We dont raise the timeline. 200 million users, was in march. Now we are at half a billion. Half a billion monthly active users on facebook messenger. It was controversial him as we discussed. Facebook basically shut it down within the app, and forced people to start using messenger. Your job is to make that worth wild. Worthwhile. I dont see it that way. Messaging is actually a core product. It is not a feature of another product. If you want to be best in class, worldclass to messaging, you need to have a destination. A singlepurpose app to perform that for you. I think moving messaging out of the core facebook app was the right decision. Half a billion people use it monthly. They like it. We are just getting warmed up. Theres a lot more we will build in the app that will make it really good. Hopefully, it becomes the best way for you to communicate with the people you care the most about. And we will build tools for you to express yourself the best you can. Your goal is to make it a richer messaging experience. What more can we connect expect to make it stand out from the other messaging options . If you look at basic texting, it is very transactional. I will be latecomer im late. Im in traffic trade. I am in traffic. Dont forget to buy milk. It is very transactional. You cant have an enjoyable and rich conversation using text messaging. That is what we want to do. If you look at messenger right now, we have highdefinition goals, selfie cams, you can send video, you can send voice clips. There are many ways you can interact with the people you care about. We are aiming to make that richer and richer in the next months and years to come. There are a bunch of ways we can do that. We are hard at work building those things. Where do you see the most potential for growth, when it comes to geography and demographics . Think growth in users is we are strong in north america. In western europe and nordics. We are big in brazil and india. We will continue developing. I think what happens whats the really important thing is for you to actually take those conversations you care the most about, from whatever messaging app or text messaging, and bring it inside of messenger. You can have a richer experience. If we do that well, the volume of messages on messenger will increase. The number of people on it will increase as well. You have Companies Like snapchat focusing on younger users. Might you make this available to younger users . By design, we are not going to design a specific thing for a younger demographic. We will figure out ways to open at messenger to more people over time. That can take many different shapes. We will see how it plays out. What about china . Is that something that could succeed in china were facebook is not . We need to sell the fact that we are available in china as a company, not just on a product basis. In the years to come, we will figure out a way to end to the market. The messaging landscape in china is already extremely competitive. We chat is very strong there. We have a lot to do, and we have our hands full right now. In western europe, north america, and brazil, india, lots of countries. We are head down, working on that. Have to ask you about paypal. How supportive are you of paypal being spun off as a Public Company . Is this the right decision . It deserves to be a standalone company. The big question is will it remain an independent come in the after it is spun off of ebay. Paypal is not a partner with apple pay. How big a problem is that . Braintree works with apple day, i do not think it is a big problem. You have been clear that whatsapp and messenger will be separate. Can you envision a future where they are not . We dont spend a lot of time thinking about that. Whatsapp is on the path to get to one billion monthly users. Once they passed a halfbillion mark, next up is one billion for us as well. We are approaching this in different ways. I think, thinking about rationalizing this right now would be a mistake. Whatsapp is fairly independent. They are in mountain view, on campus. We are building different product experiences. I think some experiences will cater to some users, others to others. We will see how it plays out. In the future, do we have as many messaging options . Or do we use just a few. I think we use just a few. Right now, most people use just a few. There will be fewer in years to come because the market will rationalize it. You have an app that is supposed to help you communicate with all the people you have in your address book and beyond or awesome for communicating with the people you care most about. How surprising is it working with Mark Zuckerberg . He is impressive. Even more than you may think. The combination of being a ionary and executing whale executing well is rare. Generally you are one or the other. He is both. He is an impressive person to work with. I am grateful i am here to witness those things. Where is messenger five years from now, 10 years from now . Thats a long time. Lets focus on the five years. Succeed,ears when we messenger will become a more central part of your life. You will be able to communicate with more people and build an ecosystem around it. The ecosystem, it will matter more than it does now. The facebook Vice President of messaging products. Company found a new way that gesture control devices more accurate. That story is next. Im cory johnson, this is bloomberg west. 2014 winding down, sam grobart traveled the world to get an exclusive look at the technology and innovations that are set to disrupt business in 2015. Imagine being able to control your computer and apps with just a flick of the wrist or wriggling your fingers. New technology is making it possible. This is the year ahead. When you think about how we interact with the rest of the world, we evolve to use our hands and interact with every thing around us. I think that intuition, to move and expect a result a happen in the Virtual World is just the Natural Evolution of that. What is the mouse as you move away from the desktop to the future . Stephen leicht is the cofounder of a Small Tech Company outside of toronto, thats preparing for a future where our interaction with technology will move beyond all of this pointing and clicking. Their solution is this armband, with gets its name from the greek word for muscle. The myo armband is a new type of computer interface. It allows you to control any Electronic Device through hand gestures and motion. Gesture control is not a new concept. Most existing systems require a camera or proprietary sensor. Making them only useful in very specific circumstances. Myo detects what is happening under your skin. These are the sensors. Each one of these pods is one sensor. That picks up the muscles in that part of your arm. The different muscles correspond to different parts of the armband. Myo measures the unique muscle signatures you generate every time you move. We pick up muscle activities, its tiny signals. In the medical field, its a 15,000 machine. We need to put eight of those sensors and an armband, and it cost 150, that anyone can slide on without shaving your hair and lying gel, and all that area. This represents what is going on in part of your forearm. If you make a fist, and squeeze quite hard, you are seeing what that means is that all around your arm, the muscle is being activated in different spots. This information is sent from the armband to a bluetooth enabled device. The device can decode the permission into useful commands. It interfaces with existing applications. You have the software, you can open a powerpoint, itunes, you name it. Flick your arm to the left, your video rewinds. Tap your fingers, your music plays. Myo works well with simple gestures to do pretty straightforward commands. Like this video, specifically designed for myo. If you think about replacing all of the things you do on a device with hand gestures, things can get cap located. Complicated. For that reason, myo may never replace your mouse. But they dont want it to. The idea is not you were sitting at your desk, and there should be a better mouse. Its those scenarios where you are away from sitting in front of your computer where myo really shines. They see a future where wearables enable us to an with machines seamlessly. 10 years from now, these devices will be all around us, even wearable computers. What is the mouse of the future is a question we are trying to answer. Our history of interacting with technology has always required us to use and hold some sort of an object. Myo is the First Step Towards an object less interface, something you can wear on your body all the time and use in new and different ways. In the future, the perfect interface may just be you. That was sam grobart. Make sure to turn ahead to the year ahead special. We will be looking at 10 innovations that could change everything you know about technology, food, and medicine. Alibabas jack ma led his company to a recordbreaking ipo. How do you choose a bank to underwrite it . Next. Welcome back. Im cory johnson. Alibabas recordbreaking ipo is in the books. The searches on to find chinas next big tech company. Credit suisse was one of the lead managers of alibabas ipo. They have been involved with nine other chinese ipos this year. How did they build their clout in china . Emily chang asked how they developed a relationship with alibaba. We had a longstanding relationship with Alibaba Group and their senior management. I think i met joe almost seven years ago. Over time, they have done a few things with them. We advise them when they bought shares from yahoo . We also helps them raise 1. 7 billion deals. We have built a relationship over many years. Credit suisse has six chinese ipos . 10. How are you getting those . We have a great team focusing on technology space. Really excited about the internet space. As a global team, we work very closely with china all the time to work with my partners in china. They are incredible bankers and they do a really good job. Its fantastic to be part of that team. You have been leading teams to china, bankers to china, for years before people realize how big china could be. If you think about internet business, internet is a volume game. When you have a lot of people, and a growing economy, those markets are great for Internet Companies. You have a lot of microtransactions. China, with their 1. 3 billion population, 9. 7 trillion gdp, its creating tremendous amount of growth. That may bode well for technology companies. It was credit to bash quite quite a coup for Credit Suisse to get you. I think they have a great corporate culture. They have very strong bankers. Its a joy to be a Credit Suisse. They are very thoughtful bankers. Some of the best bankers i have ever met came from Credit Suisse. I learned a lot from them. Its a Good Entrepreneurial culture. Credit suisse missed facebook and twitter. How you make sure you dont miss the next thing . We have to be focused. It is a competitive business. We have great competition, great bankers. We have to be extremely focused and spend time with the coveneys early on, to do what we did with alibaba. We just had one of the biggest ipos out of new york. I try and see as Many Companies as possible. It is an exciting time. Im excited to stay focused. What do you think about a company raising money at a 40 billion plus valuation, rather than going public . I dont have an insight about that. Its a private company and a private transaction. I think xiaomi is a company thats exposed to the china market. They are really confident in many ways. I think a lot of companies are trying to stay longer private, because markets are very shortterm oriented. By being private, gives them the opportunity to focus on longterm objectives. And if you saw alibaba waited 15 years before they went public. I so yesterday the average Internet Companies are waiting more than seven years before they go public. In 2000, the companys within two or three years would go public. Does that make your job harder . It does. It takes more time. You get to work with this company for longer, when they are private. They do a lot of transactions when they are private to. Is china the next Silicon Valley . It is a great question. I think Chinese Companies are innovative. I think there is great talent there. A lot of engineering talent. Culturaly very entrepreneurial. We are seeing Great Companies everywhere. I went to berlin many times last year, and ever; there, i see some exciting companies. I thought your in miller would say yes, it is. Instead he says there may never be another Silicon Valley . I think whats going on here, it happened to create a culture of entrepreneurship for many years. Going back to when these old to knowledge economys were founded, Companies Like hp or cisco. Even before that, intel. I think that culture created a lot of people who have very good mentors. They are mentoring a lot of younger companies. In many other places, it would take longer to do that. It takes years and years of development for what we have in Silicon Valley. That was imran khan. You can get the latest headlines at the top of the hour and all the time on bloomberg. Com technology. We will see you tomorrow with more bloomberg west