Transcripts For BLOOMBERG Bloomberg Technology 20161209

Faster than cpi. Ae parliamentary vote on president. Youre looking at live pictures of the protests outside the parliament. Motion should be debated in the next few hours. The kospi is unlikely to be overly affected. Global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. This is bloomberg. Let us take a look at the noon trading. R hong kong and china. Three quarters of a percent higher on the shanghai composite. Emily this is Bloomberg Technology. Coming up, the ecb doubles down on stimulus to the tune of 2. 4 trillion, but can europes tech sector capitalize . We will analyze the impact on the fund landscape. Plus, nintendo and is the year with another gamble on an old favorite. And groupon cofounder andrew mason joins us for an extended interview, partnering with airbnb in his latest venture. First, to our lead. The European Central bank its bond buying program. Mario draghi morning that the warning in frankfurt today that the latest stimulus push may not be the last if it does not reach its inflation goal. He cited government reforms as expanding to 2. 3 trillion. What are the implications for the texting and Funding Landscape inng europe, and how did tech stocks react . Joining me is Caroline Hyde. Extending the stimulus, but at a lower volume areas what does it mean . Reporter that was the conclusion to begin with. Do you go on the bullish side of things . It has been slightly longer than expected all the way up to 2017. They will be injecting money. That makes it easier to buy bonds. On the flipside, a little bit of caution that they are only buying 60 billion euros worth per month. Eventually, the market got its volatility out of the system and decided that this was a risk on picture. Emily so how did tech stocks react today . Not as positively as banks. Not as positively as the miners is where we really solve the hunger for buying. That in europe ramped up. We saw the best day for tech stocks going back weeks. Nearly every single tech stock was hired. Only six fell on the stoxx 600. It is interesting what we will be seeing in terms of d. C. Action, because does this really change the overall tune of what has been happening . Most in the market thought and mario draghi would ride to the rescue. Most thought the stimulus would remain. Therefore, the picture has not really changed. If you dig into what is going on in the market, many feel, despite the risks out there youve got brexit, the italian referendum, elections coming in germany, netherlands, france youve still got this appetite to see europe flourish. Money keeps on coming in. Emily so how can we view this in the context of the uncertainty around a trump election and his policies, the uncertainty following exit, the potential for tax cuts, deregulation . At the moment, we view it that the central bank has got your back. They are factoring in these risks. The money is still going to be cheap, but the punch bowl is still there, and therefore you are still looking to divest, you are still looking for yield, you are still looking for areas to get into. The funds being raised in europe, we have never seen such big funds. One in berlin just raised a bigger fund. Some of this means the funding rounds are getting bigger in europe, and there is more appetite. Despite all this global uncertainty, it is a political uncertainty, and the money remains cheap. The vc future remains bright when it comes to europe. Emily caroline, i want to talk to you about another story we are following. Spotify, the Music Streaming Service based in sweden, has given up on efforts to buy soundcloud, according to techcrunch. Spotify is said to have walked away over fears that acquisition could negatively impact its ipo preparation. Spotify is an eagerly anticipated tech ipo for 2017. Joining us from l. A. , lucas shaw, who covers entertainment and music streaming. Lucas, as far as you understand it, why did this deal fell apart . Lucas soundcloud has been trying a sale most of the year. It has a huge user base, one of the biggest Music Services in the world, but it struggles to make much money. Spotify seemed like a possible acquirer, but people close to spotify always said that soundcloud wanted to do much money. We ran a story over the summer that said that soundclouds founders were looking for as much as a billion dollars. Emily caroline, thats interesting, because you recently interviewed the ceo of soundcloud, and he had Something Different to say about whether he wanted to stay independent. Caroline its noticeable, isnt it, how they keep coming back to spotify . When i sat down with soundcloud, i asked, do you want to remain independent . Heres what he said. Ultimately, as a founder thats where you want to go. You want something completely sustainable and well functioning, and obviously thats what we are focused on doing. Caroline he told me he was focused on expanding into new countries, expanding the way in which they ramped up their streaming, because they were only just starting to monetize. Talking to people familiar with the situation, they told me that the price point is just too different from what spotify was willing to pay. When you have spotify with a big convertible debt load that gets ever more arduous, the longer they wait for ipo, 2017 just has to be when they push it, and maybe soundcloud was too long a stretch. Emily lucas, maybe it is tied to funding incentives. What do we know about if spotify is really on track for an ipo in 2017 . Lucas spotify has publicly said very little. Those familiar say it is on track for next year. The challenge is convincing everyone that they do have a reliable business. Every Music Streaming Service struggles to be profitable and show real model, because they have to pay so much out to the people to make the music. Spotify has been working to convince people that their model will work because they have more people paying for music than anywhere in the world. They are trying to build up their advertising business, which might have been one of the reasons they are interested in soundcloud, because you have 140 Million People you can sell ads too. Emily there are reports that apple and spotify are generating 17 billion a year. Is that realistic . Lucas thats the story. Spotify has more than 40 million paying customers, apple music has 20 million. You multiply that by 9. 99 a month and you get close to 7 billion. We reported earlier this year that the music business is on track to grow this year, and grow more than it has in a long time, and almost all of that is due to growth and newspaper in these paid services. Emily a story we will continue to follow. Lucas shaw and l. A. , Caroline Hyde in the studio. Thank you so much. Coming up, andrew mason earned his fame as groupons founder. Now he is founder of the tour. His interview coming up. And by reminder, all episodes of Bloomberg Technology are now streaming on twitter. This is bloomberg. Emily airbnb is turning down the volume around the world. Earlier this week, the Company Released a report agreeing to enforce limits on rentals in london and amsterdam. It also dropped a lawsuit against new york city and praised new rules in new orleans as a potential nationwide model. These moves mark a shift in airbnbs priorities. The Company Needs to start getting along with regulators in order to prepare for an eventual ipo. Airbnb has also taken a big step towards becoming a full Service Travel company, rather than just a home rental site. The new platform called airbnb trips will give travelers tools to plan their entire vacation. Airbnb has partnered with experienced Companies Including d tour, the bay areabased mobile lab for audio tours. It is founded by the leader of groupon. Andrew mason led groupon when it was one of the Biggest Companies on wall street, when it prepared to go public for 25 million. Shares are up 30 so far this year. Mason joins me in the studio to talk about his latest act. How does this partnership with airbnb work . Andrew at detour, what we make are these locationbased audio walks through cities. We have been doing it in San Francisco for a couple years and have recently started doing it at other major travel destinations, new york, chicago, l. A. , and a lot more cities coming soon. I have known the folks at airbnb for a while, and they were gearing up to be a more end to end travel service and thought it would be a great match. What we are doing is producing a number of walks exclusively for the airbnb community. You can get them for the airbnb app. Airbnb has their immersive experiences where you actually hang out with a local, sometimes for multiple days, and then they have things like lists in the app of what they call insider guides, that are by some kind of authoritative, authentic local. We are kind of in the middle. If you are looking for something to do spontaneously that feels immersive and experiential, thats what we are trying to do. Emily listening to a tour of San Francisco, it is very personalized. There is a narrator who grew up there, recounting the grateful dead. Talk to me about why this is what you wanted to do after groupon. Andrew the narrator is named peter coyote, he was an actor, but before that he was part of a group called the diggers and was really part of the community in the 1960s. We are trying to give you access to somebody that you would otherwise never spend time with, and they are showing you the neighborhood through their eyes. It is closer to walking and another persons shoes that you can experience any other way. For me, part of what got me going about groupon was the idea that the discounts, the 50 off discounts that we were giving to these local services, whether it was a session in a sensory deprivation tank or a bus tour from gary, indiana to chicago, things that you may be otherwise would not do if it were not for this deal that came along. We are forced against all the forces that are pulling you deeper into the screen. This is kind of a continuation of that for me. I love the idea of building things that make the real world entertaining, that get people a reason to get out of the house before oculus and its friends pull us in. We just fully enter the matrix. Emily how big of a business do you think this can be, and how do you think the partnership of airbnb will supercharge it . Andrew its hard to know. I remember doing early day projections in chicago about what groupon was going to be, and i used coupons. Com is a comparable. I thought maybe we would be a 3 billion or 4 billion business if we were lucky. But we combined existing markets and created a bit of a bit of anyone, and thats what we are trying to do with detour. We are trying to create something that is an essential part of experiencing cities when you go there. It is something everybody wants to use. The nice thing about the partnership with airbnb is that it gives us hopefully a level of exposure that is difficult to do. The hard part of this business is that you think of walking tours and are kind of like, no thank you. Your relationship with those concepts is maybe going on a mediocre museum audio tour or Something Like that. Its not something you would go out and do for its own sake. Emily the story of groupon is legendary for the highs and lows. I am curious of your reflections on that, what you are doing similarly and differently now that you are on your next act. Andrew similarly and differently, there are a lot of experiences that will make you smarter, and dumber, by the way. The way that groupon happened, i was working on another startup that was a collective action platform for crowdfunding a group action that we then pivoted into groupon. Knowing what i know now, somebody showed up in my office and said, here is my deck for the original idea, i would have said thats never going to work, thats a fundamentally terrible idea. But it was through that rubble that groupon was formed. I try not to learn too much. I tried to stay stupid, and yet my team thinks i am doing a good job. Emily thats interesting. Have you been following groupon . The stock is up 30 , theyve got a new commercial campaign. I think it is actually pretty good. There were some not so great commercials in the earlier days. Andrew i was thinking about that. Remember when we did the super bowl commercial . People did not love that. Emily look, youve been through the trenches. What does that kind of experience bring to detour . How do you teach your employees about expectations, so to speak . Andrew i think we have a real space at the company and sticking it out for believing in the fundamental idea of what we are doing, the value of what we are doing, and letting that play out. We are working with no less of a sense of urgency, but there is a certain patience and acceptance about what it is that we are trying to do, and seeing that it is a valuable product that i guess comes from having similar experiences before. Emily we are talking about the rise of the experience economy, and airbnb is part of that. There is a lot of uncertainty around trump. Markets have actually responded well. How do you think tourism will be affected in 2017, given what is going on with brexit and trump, and this sort of wait and see that everyone seems to be feeling . Andrew we are still small enough that those kind of macro shifts, we probably will not feel that much as a startup. We are still a small company. I think for me, if there is one take away personally from what happened, it is just understanding the degree to which there is no substitute for truly empathetic experiences, and i think airbnb is a great example of a company there are few companies doing more to help facilitate those and make them easier to have, where you can actually spend time and experience what it is like to be with another person that maybe is not so different from you. We are trying to take that out of the home and into the streets, so you can go on a walking tour in brooklyn with a hasidic jew and experience a day in their life like you really could not in any other way. That is what we are trying to do. Emily andrew mason, cofounder of detour. Great to have you. Coming up, as u. S. Stock benchmarks hit record highs, Tech Companies are split on the rally. We will talk about what could be holding back the stocks, next. This is bloomberg. Emily as the u. S. Stock benchmarks bye, Andrew Facebook and google are underperforming since president trump. Cory johnson joins us with the takeaways in the tech sector. I thought it would be useful to go through a couple of the companies and really try to understand some of the fundamentals, things that might change under a trump administration. There is great concern about, as it relates to netflix, how netflixs cost of doing business could change with a different fcc. The fcc cannot turn over completely. It has to be no more than three of the five members from any one political party. But Jessica Rosenberg has been a good friend of bloomberg west. She has to be appointed by commerce to stay on the commission, and that is not a given at all. Furthermore, there will be a lot of other fcc choices. The role of the road could change quite a bit. Emily remind us why netflix is so prominent in this debate. Isnt it Something Like 40 of internet traffic at times is netflix . Cory thats exactly it. Depends on the measures, the numbers are all over the place, but a lot of the traffic on the internet is netflix, and netflix will have to pay a lot more than other carriers. If you took netflix and youtube, those two businesses alone are responsible for a lot the traffic on the internet. Amazon prime video is catching up. Hulu has a role as well. And some as twitch, another amazon product. But when you look up the costs these companies would have to bear if they had to pay their way to get their service out there, it could be the benefit of some of the carriers like comcast and to the detriment of Companies Like netflix. Emily that said, Companies Like facebook, google, and apple also have a big dog in this fight on the side of netflix, and interestingly, mark cuban made an argument about the at ttime warner merger on capitol hill yesterday, that this type of merger is necessary to create a powerhouse that can compete with the apples, facebooks, and googles of the world. Flesh that out for me. Cory the argument is big business and small business. Companies like netflix, what is their policy going to be, and what does that mean that might stifle innovation for much Smaller Companies that come up with innovation . The fcc under tom wheeler has tried to say, we are going to set up policies to allow anyone to access customers and homes regardless of what their business is at the moment. The policy that might be followed by a more conservative fcc would be to say, we are going to make big money pay your way and big money will get you access on this new internet with fewer rules. It could be a dramatic change. If you look at the operating margins for netflix, heres why it matters. This is a company with singledigit operating margins. Virtually no free cash flow. If they have to pay a lot more money to deliver their service, they wont be profitable, they cant spend on content, and their business will have a lot of trouble in the future if the rules make it more expensive. Emily netflix has been used to downs and ups, so we will be watching for that volatility. Still to come, nintendo hopes another fateful franchise will hope top the Summer Success of pokemon go. We will focus on super mario with the nintendo of America President next. You can now listen on the Bloomberg Radio app, bloomberg. Com, and on sirius xm. This is bloomberg. We have an update of the top stories. Prices at the factory gates in china rose to their highest in more than five years. Consumer prices gained 2. 3 . The first time that ppi has risen faster than cpi since 2011. Gold is heading towards its first run of weekly losses in more than a year. Pulledu. S. Equity levels money at it just metal. The dollar has surged from traders 100 convinced that the federal that the fed will hike for the first time this year. The opec meeting. A russian official says there is that theher risk cartel will default on its commitments. Insia will seek assurances vienna on how the cartel will comply with its plan to reduce 30 to play 5 Million Barrels a day by january. Hong kong has expressed concern. The apple daily says the arrests were made by the independent commission against corruption. Allegedly bribed for client information. Global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. This is bloomberg. Let us check on how the markets have been trading today in the asiapacific. Juliette things looking a little better in the Late Afternoon, it asian session. The regional index up for a fourth consecutive session and on track for its best weekly gain since september. We had the record rally coming through from the u. S. Even though the ecb surprise from mario draghi. Shanghai is up 0. 9 in the afternoon session. Ppi and cpi doing better than expected. The strong dollar story pushing the nikkei higher. The nikkei up by over 1 . Us to you has closed higher by a third of 1 to round out the week the rebound we saw in crude prices is helping Energy Players in the aussie session. The strong dollar story is weighing into the emerging markets today. Malaysia is down by 0. 25 . The story in hong kong is a weakness we are seeing in the macau casino stocks. This weakness from the casinos is weighing on the hang seng which is down by one third of 1 by the Late Afternoon session. Still, a pretty positive session for the asian equity markets and a good week for asian equities as well. We will be live from london at the top of the hour. This is bloomberg. Emily turning to the videogame world, 2016 has been a year of transformation for nintendo. The company made its jump into mobile gaming with the launch of its nikomo app, and later the phenomenon that was pokemon go. In september, nintendo stole the spotlight from an apple product event with this announcement from tim cook. Please welcome sugar of miyamoto. Emily nintendo announced that super mario run will be launched exclusively on ios. 20 Million People have already been signed up to be notified as soon as it is available next thursday. The nintendo of America President joined us earlier from new york to talk about the upcoming launch. We are working very hard with the folks at apple to make sure that from a server capacity standpoint we are prepared, but the numbers are going to be more significant than just the 20 million plus that have done the notify me. Emily there are three versions of the game, all free to play, but 9. 99 to unlock, that is a risky strategy. How many people do you think of the 20 million will actually pay for that . Guest just to be clear, there are three different modes within the game itself. There is over 24 different levels. From our standpoint, we believe that i high percent of people who begin to play super mario run will go on and purchase the full application. I say this just because of the experience i have had as i have off the game. Once people start to play super mario run, they really are hoped. From my perspective, we believe the percent that will upgrade to the 9. 99 is very high. Emily it is exclusive to the apple platform for now. What is the timeline to get it to android . Guest as you said, it is for now. To develop the game and make it special, we had to focus on one platform, and we decided to focus on ios. In the future, it is coming to android, and that is something that will happen in 2017. Emily do you have any concerns about alienating that market . Guest we dont think so, because our focus will be to bring it on to well those devices as quickly as possible. For us, it is about making sure the experience is great, that from a consumer standpoint they have access to this game. We see the market as 2 billion plus more devices out there, so surely it will be coming to the android platform as soon as it can. Emily nintendo was part of the pokemon go phenomenon earlier this year. How would you describe momentum of pokemon go at this point . Guest whenever we have done special events, we did a special event at thanksgiving, there was about to be a new one, we see that engagement spiked backup, so we know that as we continue to provide new experiences to that pokemon go consumer that they are going to jump back in and continue capturing their pokemon. For us, it is continuing to make ongoing improvements, to make ongoing special events happen out there in the marketplace, but again, to step back, half a billion downloads is a huge base of consumers to continue activating. Emily one of your rivals, sony, is hot on your heels with new mobile games as well. How do you see the balance playing out between the console and consul games, mobile games, etc. . Guest to step back, from a nintendos perspective, our mission is clear. We want as many consumers as possible engaging with our intellectual property, and having fun and engagement in doing that. For us, we are going to do that not only with Smart Devices and are dedicated console business, but we are going to do it with licensed merchandise. We did something with fans, for example, that was tremendously successful. We are also going to be in other forms of entertainment best exemplified by our relationship with universal studios. With that range, we believe that gives nintendo a tremendous advantage because of our stable of intellectual property. Emily how do you see the shakeup between pc and console and mobile . Obviously you want the game to be successful on all these platforms, but where do you see the most engagement this year into next year . Guest for us, we want to see consumers engage with super mario, for example, we want to see them do that on our home council business. We want to see them do that on our three ds business. We want to see them do that on mobile. Our perspective, if they are interacting with our ip and we enjoy it, we are winning in the long term. We are not placing bets on one area or the other. We will be in all these different areas, and with our content, with our developers, with the gameplay we deliver across these different platforms, we are going to win in the long term. Emily reggie, you and i have talked about vr in the past, and i remember you sit 2016 would be the year that vr went mainstream. Is that premature . Guest the marketplace data suggests that it is. All the suggestions of vr have continued to come down. In the end, it is about providing consumers that compelling experience that brings a particular form of technology to life, and i dont leave we have seen that yet the yard. I believe there is longterm potential for that platform, but to date, it is not delivered on the numbers that were initially projected. Emily that was nintendo of America President. Now to a story we are watching, fake news on social media continues to be in the spotlight. In the most recent voice to weigh in, hillary clinton. Take a look at what she had to say on capitol hill. Ms. Clinton the epidemic of fake news and propaganda that flooded social media over the past year, it is now clear that socalled fake news can have realworld consequences. Bipartisan legislation is making its way through congress to boost the governments response to foreign propaganda, and Silicon Valley is starting to grapple with the challenge and threat of fake news. Emily coming up, we speak to the founder of the design firm behind some of the biggest tech products. Why he thinks design should be at the heart of any business, next. And some sad news to work, former u. S. Astronaut and senator john glenn has died. He had been hospitalized for more than a week. He was the third u. S. Astronaut in space and the first to orbit the earth. He spent 24 years in the senate representing ohio. He returned to space in 1998 at the age of 77. Glenn was 95 years old. This is bloomberg. Emily samsung is planning an allscreen flaunt for its Samsung Galaxy due out next year. The Company Needs a hit after the debacle of the note 7 phone bursting into flames. The new galaxy phone is scheduled to be released in march, though samsung may delay that to make sure there arent any problems. The design firm ammunition knows a thing or two about iconic brands. The group is behind the modern look of beats by dr. Dre, to the revamp of the iconic polaroid camera. I am joined by ammunition founder and apples former director of industrial design. In fact, he was responsible for hiring johnny isakson. I guess thats going to be on your gravestone. On my gravestone, the man who hired jony ive. Emily you are one of the most iconic designers and Silicon Valley. Im curious, there is a debate going on in the design world now about design versus functionality. Im curious, what is your philosophy as a designer . Where do you start on what is most important . Guest that debate is not new. That has been a debate for as long as i have been doing this, function versus aesthetic and so forth, and its all intertwined. Iowas look at what makes a i always look at what makes a successful product, it has to do with, is it usable, useful, or desirable . Those are the things we always look at. But with a tech product, it has to work, it has to work well, and it has to be successful. That is one of the primary failures for a brand, that the products do not do what people believe they will do. Emily at the same time, it has to sell. If you look at Something Like the iphone, it has been a couple of years since this particular design, and we are expecting a big overhaul next year, whether or not we see that, but how much more can the design of the iphone improve, in your opinion . Guest it comes down to a lot of detail and finesse. It is very closein. Whats really interesting is how in tune consumers have become to that, how the glass is layered, what the edge is like, how close it is to the edge of the display them all these minute things, but they kind of bad up to what is new and valuable. We all know the design means something very deep to apple, and it is not just service, it is how things work, and they have the resources to continually push on that, so i expect to see something that is really exciting that is fundamental on how it is constructed. Emily at the same time, do you think it will be big enough to kickstart sales even when the overall market is saturating . Guest i think we have seen that consistently. That is the interesting thing about a market that is saturated. Design become so important. Smartphones have transitioned to a very functional thing, but really into these everyday personal objects that we all carry and are a part of our lives, and we spend an enormous amount of time with him. Emily do you think apple and the design culture will survive without the influence of johnny ive . The structure has changed. Guest of course. I dont think johnny has stepped back. Emily he is not as in the weeds. He is focused on the office, the campus. Guest it is a designdriven culture. It will always be about everything is about the experience you put out, and we will build everything behind it to deliver it. Thats what the culture does. Emily you have been working very hard, and i got a chance to look at all these things before we came on, i want to start with the coffee mugs for ember that you designed, that stays at the temperature you set it at. Everybody who drinks coffee knows there is a fiveminute window where it is too hot or too cold. Guest we like creating connected things. This thing is very simple and pure. It has a technology that, in addition to heat, cant fool. It has a technology that will heat or cool. You put your drink in and put it to the temperature you exactly want it to be. On your phone, you can do presets, like you have a temperature for tea and multiple drinks. It works incredibly well. What we found, not surprisingly, is that people are incredibly passionate about their coffee. They are really into this idea of this mug. We managed to have starbucks pick it up, and they are selling it to their stores and online, and it has gotten an amazing response. It is a very simple thing. Emily also, the revamped polaroid camera. You take off the iconic white border of the polaroid photos. Talk to me about why. Guest we have been working with polaroid for a few years around this idea of sort of not redefining, but bringing out the brand again to a new audience, and sort of the polaroid values of simplicity and immediacy. We did the action camera, and that we have done the snap, a reimagination of the classic polaroid camera. You take a photo, it gives you a picture to print. Thats what snap is, using entirely Digital Technology to recreate that idea in a very affordable package. Emily last thing, the Activity Tracker for kids. Guest it was something we got involved with unicef to help them develop this product. It does two things. It promotes exercise for kids and helps deliver nutrition to starving children around the world. The way it works is kids exercise in a gamelike fashion. They use coins to essentially buy a meal packet for starving children around the world. It is also kind of a magnet for raising money, and that partners contribute money based on the coins raised by kids. What we found is that it motivated kids to exercise more than anything, this idea of helping. It is the number two selling fitness band at target, ahead of apple. It has been real incredible. I see adults wearing them, which is amazing. Emily robert brenner, founder of ammunition design studio. Thank you for stopping by. If you need any gift ideas, now you have some. Tomorrow, do not miss our exclusive conversation with commerce secretary penny pritzker. She discusses the incoming administrations trade policies on take. This is bloomberg. Emily tinders ceo is stepping down. The cofounder was pushed out in early 2015 before returning six months later. He will take over as chairman of tinder. He will also run a new Investment Vehicle inside the match group called swipeventures. Googles ceo larry page surprised the world with a letter announcing a radical revamp of the company. We learned the new Company Structure under the name alphabet was a master plan of the new cfo. Investors have since praised the efforts, sending stock up 145 before he took office, but the balance of innovative freedom has come at a cost. Check out our new edition of Bloomberg Businessweek on shelves. Mark joins me in the studio with more. It has been a rocky transition for the alphabet family. Describe. Over the summer, we saw this rapid departure of Key Executives at the units outside of google proper, the internet company. There are two issues. One is they have more pressure to show profitability, there are Budget Constraints they never really had before, and it is a really odd Corporate Structure in the sense that they are ceos reporting up to a ceo. Larry page is still very much the ceo of alphabet and the one calling the shots. Emily talk to us about the internal reception to porat. Long background in investment banking. Internally, though, she is referred to as ruthless ruth. Guest she has been certainly great for google. Alphabet has done phenomenally well. They have beat every single quarter. They have been investing a lot in cloud, and they think there are a lot of people who are pleased with the budgeting. The company has historically been shaky with that. There are people we talked to in our story that think that that is risking killing innovation, and a lot of these Research Projects that start with these Budget Constraints cant push for the Ambitious Goals they have. Emily we reported on a number of moonshot executives that have left. Where does it leave these various units now . What are they investing in . What are they going back on . Reporter there are a couple of companies that are around biotech and health care. They are pretty stable. Really kind of unclear what their Business Model is, but it is clear that the google founders, larry and sergey brin, are putting money behind that and are supported. A lot of hybrid projects, like the self driving car, maybe, google fiber, those are projects they have told back from. Emily self driving cars, why . Self driving cars are the future. Reporter there was frustration on this team. If they came out, this is kind of an absurd thing, and all the other car companies, uber is going in, tesla has gone in, they kind of beat them to it. Emily mark bergen, thanks so much. Tomorrow, coming up on Bloomberg Technology, dont miss our exclusive conversation with penny pritzker. She joins us to discuss the impact of the incoming administrations trade policies on tech. Find us at bloombergtechtv on twitter. Thanks for watching. Global reflation continues. Rise and Global Equities hit a threemonth high. Cutsis more, mario draghi bond buying, but warrants that this is not tapering. Gains above the one dollars a barrel as opec talks with producers. Rallies andan yuan the roads on the president s impeachment. The populous pop