A Consortium Including 4a is change since 27 the last close. Home pricessydney fell the most in five years. Lets check the markets. Hong kong has close for the christmas break. Closing the shortened day, one half a percent higher. Shanghai will open after the lunch break, down 1. 4 . This is how they looked in the morning. This is a picture in singapore. Looking likeel this. Time now for bloomberg west. Emily i am emily chang. This is bloomberg west. Pirate or Freedom Fighter . A new ruling says kim dotcom can be extradited to the United States. Beatles fans finally get their wish, the music debuts on spotify and other services. The worlds most popular drone maker tries to stay ahead of the pack with its first retail dealership. And a legal setback for a largerthanlife internet entrepreneur. A court ruled that kim dotcom can be extradited to the states to face charges. Following the ruling, he spoke to reporters outside the courthouse. This is not the last word on the matter. We will file an appeal. I am still on bail. We will go through the whole process until the very end. Emily after his court appearance, he tweeted he also put out a twitter poll asking his followers whether he should be extradited to the United States. Joining me now, his lead litigation attorney. What were the results of the poll . I do not know yet. Emily the judge has said there is overwhelming evidence to support him being extradited to the United States. The evidence in favor of kim is short of undermining the case. What is your reaction . We think the court got it wrong. In order to extradite somebody from new zealand, you have to show dual criminality. They are trying to it is called secondary copyright infringement. There is an overt safe harbor in new zealand that protects isps from criminal liability. We look forward to going to the appellant court. This is not only an issue for kim dotcom. Emily you have already started the process of an appeal. Are you going to do anything differently this time around . That remains to be seen. I think the record is clear. This court, in a long opinion, spent only a few paragraphs on the notion there is a safe harbor and new zealand that protects isps. If this is allowed to stand, a prosecutor could use his discretion to heckle policies because they do not like them. They may lose, but the effect of prosecuting somebody is a victory. That extends the copyright monopoly way too far. Emily kim and i had a conversation when we were in new zealand. Is he scared about 88 years in prison . I am not scared of anything. Everything that happens to me, i try and make the best out of it. I know this sounds crazy, but i do not know fear. Emily how is he taking this . He is taking it well under the circumstances. We have to take a look at what happened to date. There has been a buffet of government abuse. Emily a raid on his home. A military style raid on his home. The United States was found guilty of illegally taking data offshore. It is no surprise that he has taken this situation well. When you have a scenario where a professor is disagreeing with other experts, how could a layperson have the criminal mindset when the experts themselves disagree . Emily one of the arguments, megaupload is not different than any other service, like dropbox. They are trying to use optics to go after someone they do not like. The bright line in new zealand is the isp safe harbor. You cannot hold Cloud Storage providers criminally responsible for the acts of its users. Emily i want to dig into this comparison to dropbox. Dropbox says they have several mechanisms in place to limit or prevent privacy, download limits, and such. The other thing is that it is free. If megaupload was charging users for content, how is that not illegal . Just like dropbox, which charges for storage space, megaupload charged for storage space. Dropbox should be worried because all that happened in this case was the prosecution heckling things, heckling communications, ignoring noninfringing uses. The court bought into it. Emily kim dotcom is often associated with these extravagant displays of wealth. What is it like working with him . It is like working with a combination of the old comedian john candy and probably steve jobs combined into one person. He is an incredible innovator, somebody who can get people together to create great technology. He is extremely funny. It is a wonderful combination. Emily you and i have talked about this a lot. You said, if anything this should be a civil case, not a criminal case. Isnt that an admission of some type of liability . In the civil case, there is a calculus that goes on. Youtube was sued and if youtube did not have the funds to fight back, they would have lost. It is the same sort of situation. We could tolerate the downside being money, but to have someone have to go to jail for 80 years he will not have a dime to pay for lawyers. Using all of these things that are only available in a criminal case to make an uneven playing field. The theories they are putting forth are the types of theories that civil cases have against napster. Emily you think this case could go all the way to the new zealand Supreme Court. The policy issues are so important. It is very antibusiness and we think the Supreme Court will take a hard look at this and provide a check and balance. Emily thank you so much for being on the show. Slow down in china what slow down . The countrys biggest phone brand is seeing no signs of it. It won over consumers with its highend products. Huawei is pushing into the u. S. To take on apple and samsung. The music streaming industry is getting a little help from the beatles. Are consumers showing more interest in the shoes on their feet than the phones in their pockets . Nike shares have been outperforming apple over the last three months. Posting secondquarter profits that beat analyst estimates. Orders were up 20 . More of bloomberg west, next. Emily it has been a long and winding road. The beatles music will now be available for streaming. It goes into effect one minute past midnight on december 24, wherever you are in the world. Why is this happening only now . Joining me now from new york is our next guest. There is a complicated history between the beatles and streaming services, all the way back to steve jobs. It goes way back to the early 1960s when the beatles were just breaking big and they gave away most of their rights to Record Companies. Music rights are some of the most convoluted, confounding rights you can find anywhere and it was not the beatles who were holding it up. Their publishing rights, which are the songwriters rights, mechanical rights, and artist rights. The beatles did not have any of those rights to most of their songs until five years ago when steve jobs was able to put some of their songs on itunes. It has taken from 2010 to now for the Record Companies and the publishing companies, basically sony, emi controlled the majority of the publishing and music rights, and they shared those with michael jackson. The rights reverted back this year to paul mccartney. Emily a lot of history. You still have adele, taylor swift holding back their music from the streaming services. Porter the artists are doing much better than they did ever since the launch of napster. At that time, the Record Companies controlled the Music Industry and the artists were at the behest of the Record Companies. If they wanted to make a profit, they had to tour and put on live performances. It is now a lot different. Most of the artists know how to do social media and the internet to market themselves. They still make the majority of the revenue by live performances, but they do much better than the Record Companies. The streaming companies today, spotify and pandora and all of the others, they are worth billions of dollars, worth a lot more than any Record Company ever was 10 years ago. Emily you still have these incredibly high profile artists at odds with the streaming companies. When does spotify get over its taylor swift problem . Is there always going to be an artist that is not participating . Porter 10 years ago, the Record Companies controlled everything. Today, if you are a major name like taylor swift or adele, you control the use and distribution of your songs. Adele broke every record in history with album sales for 25 and she was very smart not to stream it. She will start to stream it once the sales tail off. Taylor swift got upset at spotify and itunes because she did not think she was getting enough for her songs. The royalties are set by a federal ruling. Last week, a threejudge panel came out with an improved royalty payment of . 17 per 100 plays for the artist. Ondemand like spotify, the ruling is about 10 days to two weeks away. They will get an improved royalty rate as well. Emily porter bibb, thank you for taking us into the details. We appreciate you breaking it down. Thank you so much. I am very happy the beatles have arrived on streaming. Investing insight, Alan Patricof says in the land of unicorns, there is no place to go but ipos. There is just one brand dominating the consumer drone market. We will focus on their biggest challenges. Emily there is no place to go but ipo. That is the message that Alan Patricof had when he spoke on bloomberg last month. Did they set the tone for more or less exits to come in 2016 . At the time, you said they would determine whether or not we are in a bubble. What do you think . I think it is really encouraging to see what happened with the square ipo. Square became public at a discount from what their last private finance round. We do not really know until the time comes. Interestingly, it came at a significant discount from the last round. The Public Markets behaved really well. I did not say anything other than to say the Public Market will test these valuations. Emily at the same time, we are hearing foursquare may be going through a massive down round. They are talking about a significant discount. There was a comment about a lot of these companies have been around for several years. High valuations are being tested. You really have to be concerned. That is where the high valuations have taken place because of that institutions like fidelity, have been buying with larger amounts of capital. This concept of prepublic purchases. The companies you are displaying, airbnb and pinterest and uber are going to be tested. Some of them will do fine. I just think once they go public, the Public Market has a wonderful way of appraising. The knowledge of all of the Comparable Companies and what their metrics are. If the Companies Perform well, they will do perfectly fine. I am guessing that square must be looking forward to good Quarterly Results for the december quarter. It affected their timing of when they went public. Emily how are you adapting your own strategy . I know you are an earlier stage investor. What trends are you betting on and what trends are you betting against . We own short companies so we are not betting against anything. We are in the early type financing. We are not in that later stage where you are above a 500 million valuation. We are at the earlier stage and we will continue with the same kind of strategy. We see lots of opportunities, companies and the ecommerce area, companies in the video area. Mobile has taken over. A lot of companies have found it necessary to be mobile compatible and to have a mobile first strategy and that will be a big trend going forward. Emily a number of the companies we showed in that graphic, airbnb, uber, these are companies probably not going public in 2016. Do you see a risk of their valuation getting too high . It is hard to comment since i do not have access to the numbers. In the end, the investors will apply some strict disciplines to those kinds of valuations. Emily alan, you are sticking with us, thank you so much. 2015 has been a memorable year for yahoo . Can it be saved . Angie japans cabinet has improved a record budget for the next fiscal year. That includes 50 billion for defense, the most ever. Earlier, the bank of japan reiterated that it was in hesitate it wouldnt hesitate to change policy. The boj has plenty of options in the fight to 2 inflation. Im not pessimistic at all. The bank of japans unorthodox policies are working. At the last meeting, policymakers indicated they are ready to deal with any postfed liftoff situations. I think they still have policies they can pursue. Angie jpmorgan is going against the trend, predicting the again will strengthen in 2016. The prediction is based on a rebound in japans current accounts surplus. Most analysts see the yen sliding next year. It is slightly stronger today. Chinas doubling trading hours for the yuan to extend the currencys global usage. Trading will be extended to 11 30 p. M. Price at 4 30 time will still be considered the closing price. Lets check in on how the markets have been trading in the asiapacific today. Heres heidi. Heidi it is a Christmas Eve session in asia. We have a number of markets not open. We have just seen hong kong closing up by about 0. 5 . The nikkei just managing to stay flat, giving back earlier gains. Singapore also shutting up shop for the day. We saw very strong gains out of sydney today. The bounce in oil prices overnight extended into the asian session. Quite a bit of weakness in the afternoon session. Shanghai is down by 1. 4 . We are seeing financials and pharma stocks driving that overall market lower today, falling to a twoweek low. In terms of movers, Golden Properties in hong kong surging as much as 65 before closing up a mere 54 . The company is selling off a stake in a tengion property to reinvest here in hong kong. On the other end, we are seeing shares of gemdale tanking today. We are seeing profit taking across that stock. We are counting down to the reopen in the shanghai markets at the top of this hour. Emily to say it has been a rough year for yahoo may be the understatement of the year. From ntments [indiscernible] 31 o shares down yeartodate. Then theres the executive exodus. Ackie rhesus what can the Company Offer investors in 2016 . Alik is still with us. Youve been very vocal about this. Very vocal. That is also an understatement. Do you think yahoo can be saved . Om they do not really have any relevance to the current user, internet users. The answer is no. 2016 will be very much like 2015, the growing irrelevance of the company. Emily allen, having invested in aol, how do you answer that question . Alan i do not want to dig any ditches. We have to think about when Marissa Mayer came in, the stock was 14. It is now 33. You are turning a battleship around. There are components of it. The alibaba position is worth more than the whole company probably. Lots of pieces that perhaps can be split apart. Yahoo finance is still strong. They are making a big attempt with yahoo news in bringing and katie couric. I do not think you want to yet say goodbye to this. There are pieces that can be spun out. It is a very difficult job that marissa has undertaken and there is still an opportunity. It is a difficult one, no question. Emily they did reportedly re up katies contract. Om there are good components of yahoo . Flickr as a Standalone Company has a lot of value. It should be spun out to a private equity group or Something Like that. From a user standpoint, whether it is yahoo finance, yahoo sports, yahoo news, katie couric or whomever, the worlds attention is on facebook, snapchat, and twitter. The news people get is from buzz feed, not yahoo . The idea of what yahoo was is somewhat romantic. Everybody wants to save it because of what their past was. New audiences have shifted their attention elsewhere. Its a difficult task for anyone. Regardless of whoever the ceo is, you cannot fight the tide. The attention has moved on to other places. That is the biggest challenge for yahoo . How do you make it relevant to the 25yearold today . Emily you have been emphatic that the blame does not lie entirely with Marissa Mayer. What should her Top Priorities be in 2016 . Om how can we make the board of yahoo more accountable . This board has let it become increasingly irrelevant. To blame this on one specific ceo, what were they hiring the ceo for . Turnaround or for the financial reengineering . If they were hiring somebody for financial engineering, they should have hired somebody with the skills. I think the fault clearly lies at the board. This board is what is wrong with the company. It should be the right place for us to focus on to get the company back on track. Emily do you think marissa should be given more time . Alan i will not go up against om, who is so much closer to the situation than i am. Three or four years ago, they changed the whole board. I think it is tough to blame it is a difficult problem. I do not blame the board. They are trying very hard to come up with the right strategy. If i were marissa, i would be thinking about how to rationalize the businesses. Maybe it takes spinning off things. Maybe it does take some layoffs. To get it down to synthesize it to a business that can be relevant in todays world. Young people are watching and are looking to different sources to get their content and information. I think yahoo sports has relevance. The news area is relevant. Some of the acquisitions could be spun off again. There are pieces here that i think could add up to significant additional value beyond alibaba component. Emily what about the billions she spent on acquisitions . Om i do not know if tumblr is worth less than when they bought it. The relevance of tumblr has not gone down. That was a right acquisition. Trying to move the company they have to do this wholeheartedly. They cannot do it a little bit. There are two options for yahoo . Spin off as much assets as possible, take the pool of money and invest, like a mutual fund almost into a new class of services. This is not my idea. Robert cringely wrote about this in his column. It is not such a bad idea for yahoo to become almost like an Investment Holding company. They seem to have done ok with that type of strategy. Emily Investment Holding company. We will see how that plays out in 2016. Always great to have you here on the show. Alan, you are sticking with me. More of bloomberg west after this. Emily the battle for the lead in Driverless Cars has been dominating the headlines. I sat down in november and asked what he thought about our driverless future. If you believe all vehicles will be electric and autonomous, all Car Companies have to do it or they go out of business. If you do not do this, you will go out of business. You wish them well and you hope a different fleet of all kinds of vehicles will come out. Emily do you think apple is working on a selfdriving car . Steve by the year 2022, yes. Emily apple is famous for doing what somebody has already done already, but do it better. Steve the watch is not really grabbing me. Emily you are not a fan of the apple wastch . Steve no battery life. I have a lot of watches and i actually wear them. I cannot fathom the charging nuisance. Emily do you think tesla should focus more on lowerpriced, more mainstream electric cars . The model 3 is supposed to cost 35,000. That is based price. Steve that is a great question. That is their longterm vision. You either have many billions of dollars or you do iterations. If you take a current model f, if you factor in the total cost of ownership over five or seven years, your total cost of ownership is not that different from a highend for ford taurus. If you start with that next vehicle and do that same analysis, it might come out to being like a civic. Emily i know you are super fascinated with machine learning. What is your vision for how ai changes our lives . Steve what we call ai will be specialty. Things that are creepy or magical in their ability to do something we thought was somewhat human. Manage our schedule and figure out what we want to do today. It will creep into diagnostics in the field of medicine. All of these areas of recognizing a pattern. They will see things we did not see. I think that will start to acclimate as to what we call ai slowly. Emily how concerned are you about googles ambitions . Steve a little bit. There is a bit of reckless abandon, almost like a tech utopian flair. Almost like this is the inevitable trajectory, technology is our future. We will make good pets for these ais in the future. Life will be good and they will feed us little treats. What could possibly go wrong . The ais i worry about are the ones we may never know they exist. They are operating in a way that we cannot even fathom. Emily how is your interest in ai playing out in your investment philosophy . Steve the way we engineer things is changing. Imagine much like a newborn baby that can learn anything, you build a brain in the box. Expose it to photos. The same program could have recognized anything on the internet or speech or try to find tumors in mammograms or other radiology slides. You have these generic learning machines that you can apply to many Different Things and you do not actually know how it works when it is done. Emily could these computers take over the world . Steve yes, but why . Emily because they become smarter than us. Steve to what end . We would not know we were pets. Imagine a gap between us and our pets. My cat thinks it is hunting that toy mouse. Why would a more intelligent being use kindergarten level that is my toy as opposed to much more sophisticated manipulation . Emily turning to tech that is taking off as we head into 2016, drones. In the u. S. , drones has skyrocketed. Capitalizing on that demand is a Chinese Company called dji. Rosalind chin takes a look at the challenges the Company Faces staying on top. In the last five years, dji and others have made personal drones more affordable and easier to fly. Their Proven Ability to take pictures sees the world hungry for photos. It makes it simple to capture images like this. Being g one of the first, dji has endured the lions share of sales. It had revenues of 130 million in 2015 and is aiming for 1 billion this year. There is room for growth. The market is forecast to more than triple to 5 billion by 2017. Analysts say dji needs to move deeper into Industrial Products to stay ahead. If people have a drone, are they going to need one next year or the year after . It needs to push into new marketplaces as soon as possible. The type of growth they have had, sales tripling each year, that will be very difficult to do with a number of high quality platforms coming out. We did start in the flying area. If you have stabilization, Flight Control systems, it is something not typical of what we usually do. It is basically taking our technology we developed and putting it into another category. The small Drone Industry has developed so fast, regulators are struggling to keep up. A lot of the Companies Interested in drones are starting to invest and put the time into it. The u. S. Is djis biggest market. The faa plans to issue final regulations in 2016. That should spur innovation and see these flying machines enter into a whole new dimension. Rosalind chin, bloomberg, china. Up, the father of the ipod, more from bloomberg west, next. Emily steve was not the only person i spoke with about Driverless Cars this year. I also spoke to the nest ceo. I think you will see some dramatic changes the way we think about these cars and the accessibility in terms of the price points. We are 710 years away from a massive switchover. If you think about a car, a car has batteries, a computer, and mechanical structure. If you look at an iphone, it has the same things, even has a motor in it. The hard stuff is connectivity and how cars could be selfdriving. When you look at googles selfdriving program or the alleged apple thing, it is looking at it through the lens of software first. Emily did you talk to steve about the car . What did you talk about . We had a couple of walks. This was in 2008. What would we build . We were just crazy, what would a dashboard be . What would seats be . How would you power it . We are so busy, so constrained. It would be great to do it, but we cannot. Emily when he was alive, was it Something Like, we are not doing it. Tony there were a lot of things that we said no to. Why didnt the ipod turned into a really great video camera . Tv was another one. What was the biggest one that had the biggest impact on the world . The cell phones. We will focus all of our energy on that. Forget all of the other stuff. Lets focus on a really big market. Emily what would steve say about apple . i think he would be incredibly pleased. He said the iphone would be his legacy product that would live beyond him. And the iphone is that. That legacy product is going to take apple for another decade or two decades. Emily what was your relationship with steve like . Tony very professional. There were times it was friendly. I wouldnt say we were friends per se, but it was a very friendly. It was tough at times. There were times he called me on my crap. Whether we were fighting or being friendly, it was all about the best thing for the customer and the experience. I would never trade that for anything. Emily i read it was kind of like father and son. Tony there were lovehate moments. If there is not tension, there is not creation. Emily nest ceo tony fadell. Week, butn open for a star wars is expected to scrooge the competition. Star wars could take in up to 180 million in ticket sales this weekend despite the debut of some new movies. Jennifer lawrence is back with joy. Expected to bring in 12 million. Star wars lays the role of death star this weekend. Thank you for watching. Happy new year. I will be back in 2016. Cory is in for me next week. Next, a paid presentation from perricone m. D. Cold plasma is the first of its kind treatment for the area of your body that can aid you most, your neck. Posted by Network Television star Courtney Thorne smith, and featuring some of the most dramatic before and after photos you have ever seen