She was 60. Al news, 24 hours per day global news, 24 hours per day. This is bloomberg. Bloomberg technology is next. This is bloomberg technology. Holiday cheer echoes for amazon. What tech gadgets one out. Nvestors can hack it sony apologizes after its twitter account is compromised. Steve ballmer unplugged. Americas richest sports owner sounds off on bill gates and donald trump. Now to the lead. The consumer came roaring back this holiday. Consumer confidence came in better than expected, making its biggest gain in a decade. Payd the boost in sentiment off for the Retail Sector during the holidays . There were signs of consumer strength in the online space. Amazon reported its best Holiday Season yet, it having shipped one billion items. Fitbit rallies. A sign perhaps that many people want to exercise over the holiday. Shannon covers retailing new york. Season, ion, on this got a new woman in my life called alexa. I am liking this. Amazon is very fast and loose with the numbers. This is the biggest holiday ever. If it wasnt, it would be a disaster. The expectations were high. They told us they sold nine times more alexa devices than last year. We dont know how many they sold last year. The company is reticent to release figures. Some estimated midyear, they were 1 billion topline for alexa products for very little profit. The notion that that could be a larger number, coming into the end of the year, three times that number, starts to be a significant number. Maybe not on an amazon scale, they do 45 billion in revenues per quarter. This creates an effect where people use the alexa. You use amazon and go devices, the more you use amazon. If you can put this in peoples house, they become more frequent customers, like prime customers. Shannon, it is great to have you on the show. Give us a sense of the mobile element you are covering. Buoyancy in the way we shop. Shannon before the brickandmortar retails retailers talk about their apps, it is the battle of the apps. Consumers will be using a couple apps. Dominates that space. Maybe a couple retailers can make a dent their, you have the app on your phone, you are using mobile in realtime, ordering things, price checking in the store. The debate will not be around who has the best website but who has the best app and mobile platform. There that is where consumers are moving. Playingrick and mortars catchup . Think they are doing better than they were a couple atrs ago, but when you look amazon and the sales of alexei and the way amazon continues to dominate this space and is drawing more consumers into their echoes system with with prime and alexa, the harder it gets for brickandmortar retailers. It is like amazon is 2, 3 steps ahead. As soon as they get a great website, amazon has a great. Amazon has a great app now they have Something Like alexa to compete with. They are trying, but i dont know if there are any signs of slowing amazon down. , withoutzon released numbers, they went through category by category the topselling products. They were random and weird. I went through 30 of those items and i noticed these were cheap items. It was a power cord for 7. 99. For 6. 45. Aby toy the products were low and the expectation may be that amazon has virtually no margin, but by having tiny bits of margin, they are taking money away from other retailers. The makes, it changes nature of retail. It is fascinating, the way, who has won out . Confidence ismer the best in 15 years. We are intrigued by the breakdown from a Generation Point of view. ,onsumers seem to be positive but millennials are not confident. Seller,re a clothing online is the place to be. Now gettingzon is into apparel, one more thing to compete with. This year for apparel, i dont know if it will be catastrophic but it will not be awesome. Given where the consumer is that, it could be awesome. The consumer is not wanting to spend on apparel. There is not innovation going on there. There is more excitement in soer areas, like tech. Retailers were forced to offer bigger discounts than ever this year. Maybe you could get the same number of gifts for the same number of people, but you pay less and retailers got a smaller margin. I dont think we will see, nothing really has changed, at least this Holiday Season. Maybe we will see in incremental been to benefit. Of millennial voters voted against donald trump. That may have an effect in terms of optimism. They are not feeling good about anything right now. The time they were polled were during was during the trump transition coming together and that may have an effect on millennials consumer confidence. We want to thank you for joining us. We are shifting gears into a different tech story. Hacking over christmas. Sony music apologized to Britney Spears and her fans when its twitter account was hacked and falsely reported the pop stars death. Years aftero another hack. Hacking has become a major story. One of the biggest things to come out, the recent disclosure of the yahoo massive hack wont be enough to deed derail verizons acquisition. Lets dig into this. There seems to be, despite thousands of hacks and 35 million personal records, people are getting numb to it. Important hack was the sony hack of two years ago. Not just because i sat here at this table, talking about it every day. Look. Whats going on during the sony hack was peculiar because it was a nation statesponsored hack. Company forainst a political reasons. They did not like a movie in north korea, they attacked the company and that led to the head of sony being ousted. Even though we knew who the bad the were, we still have desired it still had the desired effect. It should have meant every company in the world built every possible firewall imaginable and adopted the most cutting edge techniques to fight this. But yahoo , whose ridden butters technology, they failed. Share prices are down 5 since the hack was revealed. The sony wanted particular was so important, but we keep on of cyberhis drip feed attack after cyber attack. Maybe it doesnt bother the investor base. Of yahoo he value corporate is 20 of the whole value of the stock, a lot of cash and alibaba, the business portion ofs a small the value. If the business contracted by 25 , that would account for a 5 drop in shares. It is ridiculous to think that the hack caused a 25 damage in the business of yahoo 25 . No. The numbers dont hold up to support that kind of damage. Verizon probably recognizes that. The business is not damaged by 25 . It remains the sixth most popular website. Advertisers . F we are feeling looking for a place to get our news. Getting better because of this. On some level on the margin it is getting worse because of the hack. The steady drip of news about hacks. On some level, it will be harder to add users and charge more and put more ads out there. The technology will work the same, but the attractiveness to advertisers and users is lessened. Whether it is 25 of the business, i dont think so. It is 5 down since the breach. Cory johnson, fantastic to have you in. Are feeling festive. Coming up, will they stay or will they go . We take a look at 2017 strategies postbrexit. This is bloomberg. Caroline the u. S. Accused or a chinese hackers of making over 4 million in illegal profits after hacking several new york law firms. It is alleged they bought shares in five companies. Some transactions involved intel and a drugmaker. Is sec filed a complaint and pushing to free the assets. From hacking to events like theit and donald trump, tech world is shaken. Dependent on globalization, the industry saw Core Principles upended in 2016. Some in the industry foresee a potential brain drain from tech hubs. You will be the winner and the loser . Me is the cofounder and partner of a Venture Capital firm specializing in growth stage investments. Thanks her joining us. Thanks for joining us. Hasnt beenlogy helped equally across the board. Will this remain a key topic of discussion . I think it will. Globalization and technology and innovation have had huge benefits over the years. Beenbenefit has not equally felt. If you look at how d. C. Dollars have been invested, it is just a handful of places that have gotten those investments. Caroline you name here in california, the likes of washington. Putting these numbers in perspective, could certain states win out while some barely gain any bc dollars . Is a tale ofy concentration and and a handful of states. 59 billion dollars was invested inventor capital last year in the u. S. , and of that, 47 billion went to four states, california, new york, washington, and massachusetts. If you superimpose a map of red states and blue states in the u. S. Political system, you start to see that these dollars have led to a divide. If you look at states like florida, where less than half 1 billion was invested, or ohio, where it was 250 million, you see a stark contrast where the maturity of the Venture Capital dollars is gone. Caroline who plays up to this . Do we see the government start to help read more echoes systems moreifferent states ecosystems across different states . Is it your role as a Venture Capitalist to look harder at states that are not getting bang for their buck . Raj the Incoming Administration made it a priority to say that they want technology and innovation to impact more people. I think we as Venture Capitalists, we bury responsibility. That responsibility is into places, in hiring, we talked about diversity in hiring. That needs to extend beyond a few pockets in the u. S. In, the companies we invest the companies we back. Or these companies to become large, they have to serve a Wider Consumer base. That is what we have seen with companies that have had breakout success, like uber. They had a price point that was successful for a lot accessible to more customers. That is when they took off. Caroline it is a global company, and populism and wealth inequality is a global problem, as well. Are we starting to see certain at the systems ecosystems looking to harnish more harness more growth potentials as some companies dont want to go to Certain Companies . In berlin, we are seeing that city look to build up as they look in a less friendly way at the united kingdom. Tech has become so global that if your policies arent protech, and what that means is a bit of a question mark, but areas like diversity and hiring, immigration and intellectual property protection, those are issues that are important to tech. If you are not setting a government policy that supports the tech community, entrepreneurs have a 10 of options these days. , you aree in london probably starting to think about places like berlin and dublin and amsterdam more and more. Companieshow have acted on that . In berlin, i was there postbrexit and we saw many residents and policymakers going to london, advertising on buses and cars, saying, build your startup in germany. How Many Companies acted on that . Was a littleit premature from the berlin government. There are a few Large Tech Companies in the u. K. , like transfer wise, who have paused their growth. They are waiting to see what happens when brexit is triggered. The key thing for Tech Companies in the u. K. Is the financial passport. This allows u. K. Tech companies to operate throughout the eu and sell goods and services. There is a lot of focus on what will happen with the financial passport. If the financial passport doesnt continue to exist for u. K. Tech companies, i think we will see the real exodus, more funding going to companies outside the u. K. This year, it will be the first year where German Companies outraised u. K. Companies. That is a sign of things to come. Will be 2017 fascinating. We will discuss how would is unfolding. Raj, thank you for joining us. Coming up, focusing on the tech news of 2016. It is coming to life. We will break it down next. Caroline tech forecasters beieve video gaming would the gateway for Virtual Reality to go mainstream. 2016 was the year of the art market might have that vr market might go mainstream. Did it live up to the hype . 2016 may be remembered as a turning point for Virtual Reality technology. The year the big three headsets hit the market. Two years after a surprise to billion dollar 2 billion acquisition, a headset was released. The hype was intense. Some called it the best device since the iphone. It is magical to see this much content. This was one of the strongest launch lineups of any new platform. The price was cited as an issue. It required a powerful pc to run , vaulting the price into the 1000 range. Soon after, htc debuted a more expensive answer, the 800 aadset whose selling point is software partnership. We built this with valve, who owns steam. When hundred 25 million customers, hardcore gamers. People who already have the who can use it without doing any kind of upgrade. Following the launch, the generatecould could 2. 3 billion of sales in 2016. Rounding out launches was sonys playstation vr, the best builtin market advantage, cheaper than the others at four hundred dollars and it can run on a playstation 4 which has an installed base of more than 50 million. They are all still waiting for market demand to catch up. We have yet to develop the vocabulary to describe it. We are trying to learn how to design the environment, where the idea of narrative, where it is not linear but all around you , and creates a new experience, designers are wrapping their heads around the special features. Without a breakout hit, the industry is in weight mode mode. Nd see we have learned us through our business, in the end, it is aout providing consumers compelling experience that brings a particular form of technology to life, and i do not believe we have seen that from vr. There is always hope for next year. Idc projects sales to hit 4. 8 billion in 2017. Up, we bringing you the best of studio 1. 0, the exclusive conversation with Steve Ballmer discussing what drove a wedge between him and bill gates. Coming up wednesday, it is william lee, head of rock american economics, gives his outlook on 2017. Eastern, 11 00 a. M. In london. With the xfinity tv app, anything with a screen is a tv. Stream 130 live channels. Plus 40,000 on demand tv shows and movies, all on the go. You can even download from your x1 dvr and watch it offline. Only xfinity gives you more to stream to any screen. Download the xfinity tv app today. You are watching bloomberg technology. Putting 75 years of resentment behind them, the leaders of the u. S. And japan tossed flowers into the water to honor those who died in pearl harbor. Shinzo abe becomes the first japanese Prime Minister to visit the uss arizona memorial, and the first japanese leader to visit pearl harbor with an american president. Victoryrumps election could be pivotal for the u. S. Housing market, according to Robert Schiller who spoke earlier on bloomberg. Are at a turning point. The numbers we are reporting today are october, before the trump election. Everything looks different now. I dont know where we are going. Showing today are dont look much different from recent months, but existing home sales are high, new home sales are high. There might be eight yard room coming a trump boom coming. Turkish president erdogan turkey, russia, and iran if you are the three Major Players behind the withdrawal of aleppo will hold talks in kazakhstan next month. Found the flight recorder of the plane that crashed in the black sea. All 92 people on board are believed to have died. Senator john mccain says there is no doubt that russia tried to influence the president ial election by hacking. Mccain spoke today on a trip to estonia. There is no doubt that the russians were hacking, but there is doubt whether it had in the effect the outcome of the election. There is no evidence right now attacks had cyber anying of information, had tangible affect on the outcome of the american election. Reporter mccain is accompanied by other u. S. Senators in lafayette tomorrow. South Koreas Constitutional Court hold a second hearing today on the impeachment of president park, after both sides failed to reach an agreement over potential evidence. China has deployed an Aircraft Carrier into the contested waters of the South China Sea, a move analysts call a challenge to president elect donald trump. The ship was spotted off the coast of japan and taiwan. China claims the South China Sea is its own, despite objections from neighbors. ,lobal news 24 hours a day powered by more than 2600 journalists in more than 120 countries. Up next, studio 1. 0 with emily chang. Emily he got his start at microsoft as employee number 30, personally recruited and hired i cofounder bill gates. Decades, he went from gates top lieutenant to microsoft ceo, perhaps best known for bringing light to Software Conferences that will never be seen again. In 2014, Steve Ballmer left microsoft, bringing his trademark energy added boozy as from the enthusiasm boardroom to the Basketball Court with a deal to buy the l. A. Clippers. Today on studio 1. 0, Steve Ballmer, former ceo of microsoft and coowner of the l. A. Clippers. Steve, thank you so much for joining us. Steve thanks, emily. Emily i heard a rumor about you that i possibly cannot possibly believe to be true, which is that you were shy growing up . Steve thats a true rumor. Emily tell me about this. Steve when i was a little kid and somebodys dad was at home and i did not know the people, literally i would sit in the car sometimes because i would be so nervous and shy. Got to college, a friend of mine describes it this way, hi, im Steve Ballmer, and my hand is sweaty because im so ervous to meet you. Over time, that has changed. Emily it has changed considerably. You brought life to suffer conferences that will never be seen again. Where did that guy come from . Steve thats a very good question. A breakthrough came when i was football manager of harvard. That