Moscow held a Fireworks Show to usher in the new year. This what it looks like at the pyramid in egypt. Sydney has an incredible display over the Sydney Harbour bridge. Celebration being held this year with extra precautions. Unprecedented security called for new years eve. Police say they are not aware of a terrorist attack being planned but ask the public to avoid chain stations. 6000 Police Officers deployed to times square, about 800 more than usual. Another Million People will gather there. Global news 24 hours a day powered by bloomberg journalist in more than 150 news bureaus around the world. Cory im cory johnson. This is a special new years edition of bloomberg west. Investors calling for apple to diversify its product line, but its mostly white male executives. Microsoft will now notify users about government hack attacks and we will continue our conversation with linkedin founder reid hoffman. Now to the lead, apple being criticized for not being diverse enough. Heres the playbyplay. Bloomberg news just learned a recruitment proposal submitted by an investor calling on the company to recruit more people of color to highprofile role to increase diversity. Apple responded, saying it rejects the proposal, calling an attempt to micromanage recruitment. The ball is now an apples court, and the company has to decide if it should bring the matter to a vote, which would culminate in a shareholder meeting. David ruddiman from endurance Capital Partners joins us now. Sarah, first to you. This is interesting, shareholders getting involved in the discussion that has been taking place. Sarah right, this guy who submitted the proposal only owns about 645 shares. Not a huge shareholder, but his son saw a picture of apples board and asked why all the people are white. Theres one black man and one asian woman on the board, but still, maldonado feels its a little too vanilla. Cory can anyone bring race things . David apparently so. With one share, you get a vote. Obviously, this individual felt there was a call for action. As you know very well, talent, the best and the brightest are sought after here in the bay area. Apple, really, i think, from china with its supplier base, i cannot think of a company that in many ways is a role model, albeit not perfect, but some certainly one of the best. Cory toss in their day use of renewable energy, but really holding itself out as a moral leader in certain ways, and i wonder if that is part of the dammed if you do, dammed if you dont aspect, that they put themselves out in this way. Sarah im not quite sure i agree. Looking at apples executive team, maybe they have a couple of people on their board who could be considered minorities, but looking at their executive team, its a lot of white guys in silicon valley. This is a big issue that has been called out in recent years, and apple executives have actually become less diverse in recent years. I think as a leader in silicon valley, especially as they try to be a leader in diversity or say that they are, it could not hurt to show for it. That said, do they deserve to have a shareholder proposal but puts it into the rules for the company . There is something to be said. Cory tim cook has talked about this and said they are working hard to expand recruiting efforts, and he has talked about making a recruiting effort in that regard. He goes on to say expanding their recruiting efforts and they continue to hire talented people. I guess that is the main point. He said some groups are currently underrepresented, but they know is a lot more work to be done, acknowledging that very fact. David, when you make these investments in these companies, theres a difference now in that the conversation is not just about representing different groups but about having a company that is run with diversity so that you really understand the broad base of potential for consumer products. David i would also say a company that is global. In the case of apple, china is its Fastest Growing market segment. Its not just ethnic diversity. I think its global diversity. Cory exactly. Young, the only asian on the board, the only woman on the board, she also has not been a great executive leader. Avons results under her tenure when all that great. Sarah they talk about expending recruiting, but its another thing to keep and retain people who can help make it a Diverse Organization and help change the culture. I have spoken to former apple employees who say as diverse as apple wants to be, they say that they care, its another thing to say, this person can talk at a meeting just as much as you can, to really change the dynamic of the company. Cory twitter criticized for not having a woman on the board for a long time, it brings in a header diversity from apple who is also a white dude. Sarah they do have a woman on the board now. They had a top engineer leave who was black, and said that its not a good place to be a black engineer. Cory thank you very much. Facebook also has a new Artificial Intelligence system, but it has proven to be a little more artificial than intelligent. A systematic glitch had users had the system urging users to celebrate 46 years of friendship, some of of whom were not 46 years old yet. Cory politicians beware twitter is bringing back an old favorite, a service that saves deleted tweets from politicians. Twitter had removed it saying that it violated the developer agreement. Ceo jack dorsey went on to praise the service for Holding Government accountable, so its back. Microsoft is cracking down on snoopers, announcing it will warn email and Cloud Service users if a governmentbacked hacker targeted them. The policy closely mirrors those already in place at google, facebook, twitter, so why did they wait until now . David still with us. Let me start with you this is fairly interesting, that microsoft looks like they just got out and buy a story by reuters, but this went to the top levels at microsoft. They were definitely i think behind the eight ball a bit, and they really need to focus as Cyber Security becomes a bigger issue. This is a situation where they need to be more proactive, especially with some of the china threats, and i think it speaks to a new era at microsoft, when they take off the rosecolored glasses, step in the right direction, issue a mea culpa, and make sure does not happen again. Cory we have seen a number of enterprise Tech Companies talk about the difficulty they have had telling into china and into europe after the revelations they work cooperating with the nsa. I wonder if that was part of it, microsoft saying it could really screw up there business in china if they do something that will tick off the china government. David security has been a mustspend in 2015. Cyberattacks coming from nation states. Cory a year ago, we sat here talking about north korea and sony. That was the big story a year ago today. David you have intellectual property theft, the Banking System being hit as well, and the eu now saying that banking needs to stay in the eu. Youre going to move hosting of data to local regions collett the postedwardsnowden in fact effect. Cory creating opportunities for you . David you bet, long and short. You are seeing one of the topperforming names this year has been palo alto networks. You also have, quite frankly, some of the data centers that are building out regional data centers, so that the processing stays in those geographies and meets eu regulations. Cory interesting. Do you think there is some financial motivation, that this was about protecting their business in china and microsoft was keeping their eye on that ball, not the needs of the customers . Daniel china is the golden goose, and this was under the ballmer era. You have seen across the businesses, which is why it has gone from a glass halfempty to glass half full. Now they move forward. Its really not just about china, but as they focus more on the cloud, they need to have customers and enterprising consumers comfortable with microsoft does that cloud player, and this is part of the target by 2018, and it is the reason they had been successful. This is one of those it was a mistake and now you take a step forward and make sure it does not happen again. That is just another thing we have seen in this era transparency is key, versus the cloak and dagger days under ballmer. Cory you have covered microsoft for a long time. What do you make of this, and is there a different tone . David you can see the difference in the stock, i think they have improved morale. You have seen a retooling of the business model. The Cloud Service could be a competitor to what amazon is showing, and even moving office 365 to an ipad platform environment, not protecting the golden goose of windows forever. Very important Strategic Moves and also a positive shareholder governance. You have a dividend yield lets not forget, the year just ended. We had a down s p 500 year. The only return was from dividends. I think yieldrelated stocks like microsoft will continue to work in 2016. Cory i want to thank daniel for joining us. David, stay with us a little bit. Our semiannual look, talk to me about what worked long and short. David the absolute all star performers were what you might call new technologies. It was netflix, amazon, Facebook Cory calling Amazon New Technology because of aws . David yes, and it decided it wanted to start showing a profit. Whats interesting about aws is you have a platform which is cannibalizing old tech. Look what happened to the likes of hp. Dell ran and went private. There was net value destruction and Value Creation in some of these newer areas. Cory its interesting, you mentioned microsofts competitor to Amazon Web Services, but the way Amazon Web Services is blowing a hole through enterprise tech. Hewlettpackard, the sun portion of oracle sun, dell, ibm, train wreck all these Companies May be suffering because of what aws is doing. David your whole here was bringing a series of Cloud Companies on to bloomberg west. I think amazon is the name to watch in 2016. With aws, you have an 8 billion runrate platform that accounts for 60 of the operating profit for amazon but is absolutely disintermediation the price of compute and storage. There is not one start up between here and san jose that does not have to consider aws when they go to get venture funding. Wifi hardware . Why buy compute . It is a faster, quicker way to get into business. Cory what we were talking about before, the snowden effects i have looked at businesses like this as terrible businesses because they have huge Capital Expenditures and not a lot of differentiators between them and competitors, but maybe that runs counter to trend. If you have to build data centers everywhere for political and governmental reasons, not necessarily business reasons. David the cloud has a place, and its called a data center. You just have to walk into one of these. Maybe you will do a segment on it. You see the interconnection of wires, and those cross connects are what create the franchise value. Its all about hosting and speed and access, and that is where the data centers are really having an impact, but the snowden effect there is another investment name we have been involved with called cyberarc, an israeli tech company. You already have authorization to access the bloomberg network, but you are a bad guy cory both are true. David they may be. I will let hr deal with that. Basically, they watch what you do, so that there is not another snowden effect. The interesting thing about Cyber Security is there are Different Levels and forms of security. It is a very important growth area. Cory interesting stuff. Always good to see you, especially done up like this. Look at the cufflinks. Fabulous. Coming up, sidecar ceases operations today. What will happen to employees . And reports of yet another potential merger for liberty global. Details to come. Cory we are watching vodafone, rising to a fourweek high. The daily mail saying discussions are under way initiated by malone, encouraging the companies to pursue a deal. Turning now to the sharing economy, lots of activity this week. Sidecar officially shutting down operations today, falling to competition from uber and lyft. What is the potential impact . Employees leave these startups. Joining us is the ceo of of counsel, an online marketplace for Legal Services the ceo of upcounsel. You have the contractors, which the notion of employment is changing, you have the contractors, which is kind of what i want to talk to you about. You also have employees who are taking lower salaries in the hope that Stock Options will work out. In both cases, i think we are starting to see some litigation. Matt absolutely. 2015 definitely hallmarked a number of litigious infants for events for some of these ondemand services. Cory warms the cockles of a lawyers soul. Matt absolutely. Typically, when a company does not have any money, they are not really a great target. Where we are seeing the instance of a lot of these lawsuits are the ubers of the world and these ondemand companies that are flush with cash. We are really redefining or questioning how we think about employment and what are the definitions of employment. Cory in our parents generation, it was you get a job, and you have that job for most of your life. 3, 4, 5 your entire life. Matt now, people have 4, 5, 6 all at the same time, clocking in and clocking out whenever they want, and thats pushing boundaries of how lawmakers not have thought about the things. As people about this out, we have seen employers come forward and bring lawsuits. Cory Legal Protections evolved in a very difficult way and did not adapt for this new world where this no fulltime employment, contractor economy, or this notion of Stock Options and so on. Matt at least on the contractor versus employer side of things, it relates to the ondemand economy and how we are looking at 2016 and how a lot of these ondemand companies are looking at 2016. First and foremost, you have to remember this is really limited to california, with some exceptions, right . Thats not a big surprise. California has always been very liberal when it comes to employee rights. A lot of states have said they are not ready to go there yet, and many areust sitting on the sidelines waiting foother states to figure this t. Its pretty limited to california with some exceptions. The second ithat these models can still workith fulltime employees. You have seen a Lot Companies bring all thr employees on as fulltime emplees, so they can work as long as they me the Unit Economics work for the busine. Cory thank you very much. In an interesting conversation. 2015 ended with a fizzle on wall street. All those details next on bloomberg west. Cory not much to celebrate on wall street. Traders headed home. Ended the year with a drop. A rout in commodities. Techs led declines. Netflix and amazon among the best performers for the year. Abigail doolittle has all the details. Abigail it is been a big year at the nasdaq, the only major u. S. Equity indexed to close in the green for 2015. A big piece of this strength is that tech sector. One of the top three performing sectors within the nasdaq composite index. And much of this outperformance came from the Big Internet Companies, including amazon, netflix, facebook and alphabet. But the top performer, not just of the Big Internet Companies but of the nasdaq 100 was netflix. Shares close up by 135 , driven by Strong Subscriber growth. But netflix was not the only big Internet Company to pull a double. Amazon more than doubled this year. It is amazing. Consider this time last year, amazon was trading closer to 300. Now finishing the year closer to 700. A triple digit stock pulling a double. A big piece of this is investors cheering the Amazon Web Services unit or the companys move into the cloud. We take a look at facebook. The stock carved out a new record high as investors really like what they saw around the mobile advertising growth. Not all stocks fared well. Some real weakness around ship names including Applied Materials and intel all closing down. Micron was a worstperforming stock in the nasdaq 100, down 60 . And lastly, lets touch on apple. For the First Time Since 2008, shares of apple are closing down on the year. Much of this is around investor concerns about the potential for slowing demand for the iphone in 2016. Analysts bullish on this name. It will be interesting to see what the new year does in fact bring for apple. Cory that was bloombergs abigail doolittle. One of the biggest issues debated in 2015 has been the question are we in a Technology Bubble . Emily chang poses that question to lots of people, including linkedin cofounder reid hoffman. In some ways, we are in a bubble. In some ways we are not. The key thing, it tends to be a private market bubble. In the private market doubled not have as much private market impact. It is not something that when you hearken back to 2000, 2001, you worry about quite as much. Emily so, we are in a bubble on the private markets but not in the Public Market . A quasi bubble. Emily i talk to your colleague who said something similar. Marc andreessen saying we are in a longterm bust and tech is undervalued. Why is there such a diversity of opinion . Reid i think the question comes down to is how much do you believe that new things will be invented, that will be solutions that are not invented yet . Inherently, you think the network you can build companies from essentially an idea to something really globally relevant in three years, four years, five years. You look at uber, dropbox, these new companies. They can move very fast to global relevance. They can be important to affect all industries. So, thats the bull case that says we will create more of those. Technology will be part of the solution not part of the problem. And thats what we should focus on. On the other hand come enough to go, ok, a lot of investors are betting on this broadly. So you get valuations where you look at a valuation and you go, why is that value that way . The answer is people are not distinguishing very sharply between which Companies Benefit from a globalized network age and which companies do not. That is the key issue that breaks between the polls and the bears. Emily our clients are really interested in this topic. Is it really subjective whether or not we are in a bubble . 1999, no one would dispute in retrospect. Reid no one disputes bubbles in retrospect. That is not actually the test. Clearly, that was artificially inflated and had a recorrection that was serious. The question comes down to, look, it looks like some of these valuations are high especially on the private market side. That one seemed a little crazy. You can see things where private valuations have been much higher than when companies go public. With the Public Markets not being affected as much. So you get those kinds of things where you say, look, there are clearly some elements of a private bubble. However, the key things comes down to is i think we are going to see more of these companies that go from zero to a billion members in less than a decade that actually in fact have global impact. Cory we also asked about the future of social networks and snapchat. Named as one of his biggest missed opportunities. Here is reid hoffman explaining why there is still room for more players and social media. Reid i think so. We obviously have a macro evolution to networks to mobile. People are spending a lot of time with it. Those macro channels continue to be vigorously in an upward direction. One of the things i think it is great about snapchat i am not on the board there they clearly demonstrated an ability to invent new products like stories and other kinds of things that create the new products, here is a new social product that everybody pays attention to and starts building their own version of. Thats very good evidence for a strong future. Emily do you see social networking is a much more sort of disparate thing, or will there be a few dominant players . Instagram, web chat and snapchat it is too much. It seems to me it cannot possibly be sustainable because i will make a choice and choose two or three. Reid there are a lot of people in the world. If everyone makes the same choices, i agree with you. Its probably three to five. However, some people say, in fact, like for example, teens say the disappearing content matters to me. That helped me create privacy. Other people. I dont snapchat. So, that is not our three to five. But it is their three to five. Whos list of three to five is different. Emily what does worry you . What times are you seeing that are of concern . Reid i would say the primary thing i would Pay Attention to is we have seen a lot of really Great Companies traded five to eight years ago. What are the companies being created now . Which areas will they be . For example, everyone knows we are continuing a trend toward the mobile universe, but we have not seen a Breakout Company and the last couple years. Is that because they are not going to happen . Or is that because we are not finding them . As a venture capitalists we are looking to see, it is a mobile world, what else is coming . I also think that the questions of some of the questions the more hard tech, more Car Companies in addition to tesla, which is great. I have two. Both in fn and x. You know, but also, in the intersection of biology and other kinds of things that will have macro impact. Will we have more of those kinds of companies . It is mostly, im an optimist. What are the new things to build . Emily it is interesting you say there has not been a mobile Breakout Company for the last couple years. As somebody who gets a first look at anything you want, you probably have the best rolodex in silicon valley. That would concern me. Reid yeah. Although, there are just cycles sometimes. Maybe in fact it is the right invention has not happened. Maybe the fact is mobile distribution is still very difficult to figure out because unlike the web, which is relatively an open platform, the mobile ecosystem is more closed platforms. More driven by a fairly narrow apertures or maybe getting the right Critical Mass is more challenging. Maybe that is something we will figure out how to make that happen. And that open ecosystem creates more interesting thing. Cory we will hear more from the linkedin cofounder later in the show. 140 characters may have been too many for bill miller in the third quarter. He leveraged bets buying options in hardhit technology companies. Miller known for buying stock in the mutual fund. It worked well for him with apple and amazon. But millers appear to have less success with similar wagers on twitter, reminding that leverage works both ways. Opportunity trust double down in twitter in the third quarter. Warnings sent the stock sliding. Those same contracts trading 1. 40. Leaving the calls even further out of the money. You are watching bloomberg west. A major milestone for uber. The clocks important trip. How one lucky passenger won an unusual reward and the driver as well after the break. Cory welcome back. You are watching bloomberg west. Lets get more on our linkedin chairman reid hoffman. Emily chang asked about the importance of thinking global off the bat. Reid youre naturally global. When we launched linkedin, we put 13 countries in the drop down because we had not realized how quickly we would be global. We started adding countries from the very first day, because people would say my country is not in your list. Ok, lets fix that. We added those countries. A personal geography lesson. There is a whole stack of companies that are global anyway. If small tweaks are small things that will steal away your focus on a product, allow you to go global sooner, that can be very useful. Whatsapp was dominant globally. If they said we are just focused on the u. S. , they may not have gone to this extraordinary ecosystem they got to. The last one is you think about global matters in terms of Critical Mass. Some Companies Like uber say, look, we know it is a huge amount of work to go global really fast but that is important to do. There are other companies where you say no, just domestic right now. It is a different market fit. Emily it is interesting you should mention uber. Because uber and airbnb have different strategies. In china, uber says they want to incorporate. Airbnb says they want to keep it inhouse. Reid the reason i used uber, is airbnb has a Global Network effect thats useful. People travel between countries. If you have a bunch of residencies in europe of the u. S. , singapore, then people who traveled there actually in fact, thats a Global Network affect and that is very useful. So, they naturally expand globally. They do not have to do as much hardcore work as uber does. Emily uber has a harder job in airbnb . Interesting. I was wondering when you use that word natural, how much of airbnb do think feeds itself. You have done so much work on marketplaces and networks, how much does airbnb capitalize on its own momentum . Reid i think the benefit is it is the way the world should be. As people encounter it, they realize it is like there are bunch of things where we are actually have unique experience, a social experience and that just staying in generic hotels is not the only kind of travel experience. It provides economics and liquidity for hosts, such that they can now, it raises their income. They can afford the mortgage better. It creates more cultural and connected experience for the travelers. So, all of that is the way the world should be. There are obvious the questions about trying to make sure zoning is done right. All of that stuff really matters but that is the way the world should be. So, i dont, uh, i think that part of that whole kind of, like the metaphor using is it is the establishment of community. That establishment of a longing belonging that is the Mission Statement of airbnb. But i think that actually compounds naturally because it compounds to human social connections. Emily why does uber have to work harder . Reid because the uber network is much more naturally local to a city. So, that means it is just as easy to say there could be a halo of london or, like, different regions. So they are already established there, they have to put intensive effort into the growing of each specific city which is part of what uber developed as launching city teams with the playbook. They have done it extraordinarily well. Cory that was linkedin cofounder reid hoffman with emily chang. An example of how well uber has done since starting up five and half years ago. The Ride Sharing Company just clocked its 1 billionth ride. He won a years worth of free uber rides. The driver also gets an all expenses paid vacation to anywhere in the world. Drink the best champagne. We will tell you about an app that will help you track down the best bubbly. Cory as we bring in the new year, netflix doing parents a solid. Children are itching to celebrate the new year late into the evening. Parents itching to get those kids to bed. So, netflix has created, get this. Six specials that countdown the end of the year. You do not have to wait until midnight. Tell the kid it is the end of the year, run the special, the countdown. This year, they are doing six of these specials, each focused on a different animated character. They did one last year. It is quite a hook up you can get on your gun of celebration and get the kids out of your hair. Those celebrations may include champagne for a lot of people on new years day. A bottle of bubbly might not be the best. You want to make sure you bring the bus. The app i use is called delectable. And first, lets start with delectable. It is a Fascinating Technology play. Some real serious data crunching where you basically do what . We launched about four years ago. And the premise was how can we help people learn about wine in a fun way. So, ok, first challenge how do you know what you have had and how do you relay that to others . We built Image Recognition technology. This is the core function of delectable. You take a photo of a bottle of wine. We identified for you. We can identify that bottle right there. Cory you may remember if you drink this entire bottle of this 2009 champagne. Thanks to delectable. There is a personal scrapbooking element to it. We do the data crunching so that as you posted wine photos that we have identified, you can search and sort and have a record of what you have and what you like and where your drinking is going. We ebb and flow. The other big component that has gotten a lot of attention is the social element which is natural to wine. Just as you are posting, you can post to share publicly. One of the points of difference is probably because of our great Image Recognition technology a ton of wine professionals use delectable. Cory and serious collectors, too. Seth, a friend of mine, also a great shopper of wine. Hes good at auctions. I love seeing the stuff he has discovered. It is fun to learn from each other. You get to see if any stained in stage in your wine drinking expiration that the world is not flat. You will encounter things on delectable i didnt intend that. I like that. Cory you launched a new app. We Just Launched banquet a couple weeks ago. It has been a crazy holiday season. One of the challenges we wanted to address and delectable is, ok, i loved this bottle of wine. Where can i get it . How can i get it . Am i getting a from somewhere reputable . Banquet is an extension of delectable. Its focused exclusively on wine ecommerce. We partnered with a number of really truly amazing retailers around the country. So, all of the places that me being a wine nerd to my core, i have crushes on all these stores. In new york, one of my favorite is morel wines. Cory rockefeller center. As well as frankly wines in new york. That is a small shop. Here in san francisco, ruby wines. Kermit lynch is one of our partners. It is a really cool way to, ive only entered my credit card information once. I never have to do it again. Super painless checkout. I can shop from all of these stores. Well expand the Retail Partners cory can you demonstrate how simple it is . All i want to show off is the great stuff. I do not im ordering the cheap stuff privately. Post it with delectable, i take a photo. I see if it likes ive just taken this. There you go. Cory it recognizes what it is instantly. It looks at the year. The Technology Behind this is amazing. Wine is really complicated, actually. Hopefully what we can do is take out some of the annoying and add more fun. Cory this is written in cursive and in french and it recognizes it just like that. Has it gotten a lot better . It has. One of the things i love it you can take a variety of angles. It is a little tricky if you choose to get very artistic with your shots. And there are lots of other things in there. But the more images we have for any given wine, the better it tends to be at recognition. Cory just in time why dont we toast the new year . Head of content and delectable. Toast to you, toast to all of our viewers. Hope you had a great year. I hope hope next year is even better for everybody out there. You have been watching bloomberg west. Happy new year, everyone. Cheers. Happy new year. The following is a paid program. The following is a paid advertisement for omega xl. If you have been living in pain and trying products that dont work, you are not alone. One point 5 billion people worldwar