he and his partner jared cohen are authors of this book. i started by asking schmidt, what has changed in the year since the book was first written? >> it is interesting, if you read this book from a year ago, a lot of the things we talked about did happen. we talked about the dangers and issues. maybe the most interesting thing has been the unpredictability of political change because of technology. at the time he wrote the book, we were reasonably sure that the revolution in the tahrir square in egypt was going to produce a pseudo-democratic outcome. now it seems we're back to square zero. if you look at the ukraine today, it is not at all clear what is going to happen, and no one has a proposal how to deal with syria. we have learned there is some kind of limit to technological optimism. but if you empower people, ultimately, the gun still speaks. i'm not sure it is a good answer, but it is a true answer. >> i was just on the syrian border about three weeks ago. one of the things we had written about in the book is that governments in the midst of conflict will become so concerned about empowered citizens that they will set up check points to confiscate phones or see what is on them. what did i hear from my friends in syria? the government had set up checkpoints. they asked for your phones. my friend told me about her brother being found in a situation where guards at the checkpoint saw a post on his wall that was sympathetic to the revolution. a signal came from the checkpoint up to the rooftop of a nearby building, which resulted in him getting shot in the head. this is very real. this is not just cyber security and physical security. you have people getting caught in physical and virtual crossfire. there is no shortage of horrific videos coming out. ultimately at the end of the day, the world is still governed by states and their militaries. >> it seems like we are entering a time of uncertainty. for example, we are in myanmar-burma. nearby there is a series of town violence is between the muslims and buddhists. it involves 35 people being killed and houses being burned, horrific stuff. we are reading about this. in our view of the world, the internet should be a moderator. it should allow people to see that you are ok, we see your culture and we are accepting of you. it was used exactly for the wrong reasons. it was used to inflame the passions on both sides. and there was discussion about trying to shut it down, which they did not. we are in a danger zone in countries which don't have proper societal tolerances and rules of law. things can be misused as well as used for good. >> how does that play out? >> in the early days of the protest in ukraine, the first instance in which it was spelling trouble was where yanukovych lost the information environment. first he shut down the tv station for the opposition. he could not do anything to stop social media. all that did was give people an additional thing to complain about in the various microblogs. once he lost information environment he also lost the military. with an explosion of grievances, people started letting their guns down. the hick up in all of that is that it is very difficult to unseat and autocrat. what happens next is much more difficult. in the book we say that revolutions will be easier to start but harder to finish. if you look at ukraine, this is a highly complex society. it is not just and autocrat versus democrats. you have an entire eastern part of the country that sympathizes with russia, you have a government in kiev that is still in transition. there hasn't been a really charismatic leader to step up. it is far more complex than just following play-by-play. >> and you have a population that is highly wired. this doesn't necessarily produce democracy. or tolerance and so forth. in the book we talked a fair amount about egypt, because what happened with the egyptian government, mubarak got so scared about what was happening that they shut down the internet for 4.5 days. the average person said, oh, my god, they have taken my internet away, and then became a revolutionary. people took that as a signal that the government was afraid and then switched sides. the new government, the new autocrats don't turn off the internet, the infiltrated. they use the tools against the citizens in the semi that -- same way that citizens are using it against the government. it is a more stable situation in that sense, but nobody knows who to trust. there is evidence that the encryption networks have all been infiltrated by the chinese government that people are trying to get around. >> so eric and jerry, how well do our leaders understand the power of technology? >> i think it depends. >> hillary just joined twitter in june 2013, a little late for the party. >> i don't agree. i would say she elevated the issue of internet freedom. >> after google was attacked by the chinese military, mrs. clinton as the secretary of state gave a rousing speech about the importance of internet freedom as a symbol of democracy to fight repression and to fight for the rights of minorities and to make the world a safer place. i will always remember her courage in doing that. she was immediately lambasted by all the authoritarian regimes. you can see a better example of the chinese or russian model around, we will tell you what you need to think about, versus the open democratic model that we are used to. >> i was in china covering china when google left the country. i remember that speech. when it comes to google in china, is there anything you have learned that would possibly lead you to going back there? >> all it can say is that it will remain difficult to negotiate with the chinese government. the most likely scenario is that the chinese government will continue to be wary of google. they have the arbitrary power to block google services through their great firewall of china. we have tried to convince the many times that the country will be in stronger and better shape, better economic growth and so on by opening the internet. they don't agree. in fact, president xi -- garrett and i were bizarrely in a meeting with the premier and the president, going through all the things they were doing. >> that is fascinating, i didn't realize they'd taken meetings. >> i concluded you take them at their word, that they see themselves as mandarins in their culture and that they want to grow the country at 7.5% growth. they are very proud of the fact that they have lifted a couple hundred million people out of abject poverty into the lower middle class. good for them, good for all the chinese people. the issues they face is that 7.5% economic growth will not continue for so many decades. eventually, it slows. they have many unsolved problems which will become apparent there. they have a credit bubble, etc. also, their citizens are getting connected. they have a service of chatting which links people. it is very difficult for them to systematically censored a parallel communications of 100 million people. >> that was google executive chairman eric schmidt. and google ideas director, jerod cohen. next, we will hear how schmidt describes google's relationship with the nsa, as we bring you more of my conversation from the oasis conference. ♪ >> this is the best of bloomberg west. turning back to my discussion with eric schmidt and jared cohen. one of the important things we discussed, the nsa and edward snowden. take a listen. >> what is the state of google's relationship with the nsa? >> what relationship? >> it is not even complicated? >> they didn't knock, they didn't call, they didn't send a letter. they just visited. [laughter] >> the latest revelations from snowden that the nsa colluded with the british to intercept and safe images and chats, what are the chances that happened to google video chat? >> we're looking forward to more disclosures from the nsa on this matter. >> you guys have gotten together with a bunch of different technologies to petition changes in washington. how optimistic are you that congress is going to do what you want them to? >> what the nsa is doing is covered under section 215. it is known as the business record act. and through a series of legal arguments that allows them to record every phone call you make, by their own admission --in order to target one suspected terrorist out of 33 million people. i will let you determine if that is an appropriate use of power. the group that google was a part of took the position that this meta-data collection was not necessary, that there were other ways of achieving their goals. the issue of collecting data was problematic because of leaking. the president, after listing to us and others from the other side as best i can tell, they announced a committee which i am on, to try to figure out what to do. the president does not want the nsa to keep the data, but he wants others to keep it. we are working on what the choices are. i will take the president's word as sincere that he was trying to address this in the balance between interests. in the book, we say quite a bit about this area in particular, in a democracy, democracies will have this debate, especially now that we know it is going on, and we will find the right balance of interest. if i wander around in america and i asked the question, what rights or privacy would an american give up if there were a horrific 10 person terroristic act once a year or every few years? it was horrific. the average american says to me, i am fine with it. ask the same question in germany, the answer is, we are not fine with it. ask the same question in britain, they say why are you asking the question? what is the problem? you ask the question in israel and they say what planet are you on? these are all strong functioning democracies with different values. in the book, we say that governments need to have this debate and find that balance. there is no single answer. >> also, we recount a 5.5 hour interview that we did with julian assange, which he eventually leaked, he was under house arrest in the u.k. the conclusion we came away with was that the danger of bulk leaking will continue. in the hardcover version of the book there are going to be more bradley manning types than edward snowden. the argument we make is that who appointed these people at the roles of what should be made public and what should not. who can possibly read to 1.2 million documents and make that determination? >> they appointed themselves. >> it is not a good idea to have random people decide to leak large amounts of data without some kind of oversight. >> does that make snowden a traitor or hero? >> i'm not going to use those words. but let me tell you about the problem of allowing it. let's say there is a large collection of health care data or tax data. those are also in databases that could in theory be hacked and leaked. you're better off in a democracy having a system which allows for such whistleblower behavior that does not ultimately cause the date of permanence to be invoked. the problem is, once you make that available to everyone, you can't take that back. people could actually be harmed. >> more of that interview next. we will be talking about google and robots next. ♪ >> welcome back to "the best of bloomberg west." i'm emily chang. we returned to our two guests. i asked eric schmidt what he thinks, given all the things google is working on, what is the most important thing google is working on right now. >> i think the biggest thing is the develop that of more -- the development of more generalized artificial intelligence. because of the amount of competition that we can now assemble, millions of computers to work on your behalf, we begin to transition from you asking questions to making suggestions that are quite relevant to you. the ability to do generalized knowledge means that we can not only discover fact's, but we can also figure out the things that you care about. we talk about this in the book. the evolution of this is that today on your phone, you ask a question and get an answer. the evolution is that there will be a device, a tablet, that will be an infinitely intelligent personal assistant that will travel with you and help you and help you figure out what to do today, what you should know, briefs you ahead of time, keeps you entertained. all of that is possible with today's technology with enough hardware, scale, and so forth. >> so i don't even need to ask the questions? >> it could do things for you based on the context of what you are doing. this is all opt in. you have to say you want it. in the book we give an example of the following. you wake up in your bed that has determined based on your optimal rem cycle exactly when to wake you up. there is a wall. of course, it already has a coffeemaker working. you look at the wall and you say do i need to get up. the wall looks back at you and says no. it has calculated that the airplane is going to be late, your boss is confused, you need this leap because you are out late last night. and you get 19 more minutes on your rem cycle. are you going to use that service? you bet. you want that 19 minutes more -- and you are asking how i feel about that? people will use that. >> google is buying a lot of robot companies. what are you doing with robots? >> we're certainly experimenting with what automation can lead to. that is probably all i should say. in general, robots of one form or another will become much more omnipresent in our lives in a good way. they will help us with this and that. they will replace a lot of repetitive activities that people are doing. much manufacturing has been robot is sized or automated, with better productivity. >> is that what you are working on? >> i'm not going to answer that part of your question. >> what about nest? >> i would rather not go into future product stuff. a simple way to understand nest is if you go back to where we were 20 years ago. at the time, we looked at the fact that people would have a ip address is near them all the time. that became the framework for the internet of things as it is now called. you going to have these devices around and they will be able to communicate to make your lives better. we are running android in the home. the theory is that you walk into the family room and your android devices connected to your television. it knows whether you want your text on the television or not. you can go on and on about making your lives more automatic. that is the vision of the smartphone. the nest is a version of that. but i have had the benefit of being in a google self driving car. it is fascinating and the ride is amazing. do you have an idea of when this could be mainstream? >> i think it depends on the level of loch ness. it is very important that these cars not have a lot of bugs in them. [laughter] we are very close. that last little bit is hard. >> speaking of connecting the world. why did google team up with facebook for internet.org? >> again, you're asking industry questions rather than strategic questions. i think facebook and google agree on the goals of getting the world wired together. there's no disagreement on that strategy. >> google is working on broadband balloons. tell me about that. facebook in the meantime is apparently buying a drone company. give us an idea of what -- >> we have a project called google x which is doing very interesting new developments. we invented a technique where you have high altitude balloons that provide data services, but they are moving in the stratosphere. >> you have had success in a -- it is important that you have permission from the countries where the balloons go over them. it is in the research phase. >> what about google fiber? in talking about connecting the united states, you have had success in a couple of different places, the landscape is changing dramatically. do you see this as being a potential for a business, or is this proof of concept? >> it seems to me that everybody here would enjoy having a good internet connection. if google doesn't provide it, your competitor should provide it. we win with increases in bandwidth around the country and around the world. one way to understand what we are doing is -- it turns out it is a very good business, but we benefit when people have a high-speed connection. it is in our interest as a company and in your interest as a consumer. >> we just went to provo, utah to cover the fiber rollout there. everyone is very excited, but there are big challenges. how do you overcome them? it is a very established infrastructure. at&t is trying to prevent you from using their poles in austin. >> those are workable problems. the simple answer to a regulator is you want to say, is there a true competition for your player? if the regulation produces only one player, is the wrong approach to regulating. figure out what is preventing a second entrance, whether it is pole attachment, frequency issues, there is a history of incumbents writing the rules in their favor. it is important that the competitive market -- if you look at internet bandwidth globally, it is approachable in places where there is absolute commitment from an autocracy to have high-speed or where there is a competitive market. in plenty of parts of america there is not a competitive market. in some places not at all. >> is the plan to have google across the nation? >> we will see. we have announced 13 more cities. >> google executive chairman eric schmidt. you can catch that full conversation on bloomberg.com. >> israeli prime minister benjamin netanyahu visits silicon valley and talks to our correspondent cory johnson. he talks about everything from cyber security to the california drought. ♪ >> welcome back, i'm emily chang and this is "the best of bloomberg west." israeli prime minister benjamin netanyahu paid us a visit. he talked with tech leaders. cory johnson caught up with the prime minister at stanford. >> there are so many technology companies coming out of israel. what did you learn at apple? >> i learned that they are in israel for a good reason. they find a lot of people there giving them new applications, a lot of ideas. right now, the future belongs to those who can innovate. the future will belong to those who can innovate even more. the smart companies are in israel in a big way. a lot of israeli smart companies are here. i want to make sure that that cooperation increases because i think it really is a competitive advantage. >> you struck a deal with jerry brown to have a more formal relationship. to do what? lower certain barriers, what are you trying to make happen? >> we have democracies on two sites that are holding back development. let's help them by not interfering with them, that is the first thing. secondly, there are things we can do as governments. for example, california has a big water problem. we in israel don't have a water problem. how is that possible? >> because you are in a desert, that would seem very difficult. >> and not only that, our rainfall has dropped by 65% over israel's existence and our population grew tenfold and are economy grew 70 times. how come we don't have a water problem? because we used technology to solve it. these technologies could be used by the state of california to eliminate its chronic drought problem. >> desalinization has been a controversial thing. particularly in such an environmentally conscious place as this. >> use solar energy, that is what we are doing. >> how do you expect to get there from silicon valley? >> i would like to get all the venture capitalists and adventurists and technologists to come to israel and see how they can find soulmates but also entrepreneurs and technologists to cooperate with. you don't insulate yourself and you don't close yourself off in this global world. you open up. and you gather the smartest brains anywhere you can find them on the planet. that is what i think we have in israel. we know there are other places like that. california and israel are two of the greatest hubs of technology and innovation. let's make our work even better. >> there are are a lot of technology companies coming out of israel. a lot of them started in the military. i wonder with this newfound focus on spying by the nsa and distrust of what companies are doing with data, is there something you can do to reassure people that the equipment they buy from israeli technology companies won't be used for it spying? >> we don't go that route. we are going the opposite route. we want to build in israel a global center for cyber security, in other words, to prevent spying and piracy and sabotage. you have to protect electricity grids and bank accounts and traffic systems and aviation systems. all of these can be individually and national infrastructures could be imperiled by cyber attacks and are imperiled by them. we need to create the ability to protect individuals and protect countries. in israel we have such a capability. i think we are really among the top in the world. i have made it easier for israeli startups. we have hundreds of startups and cyber security. i made it easier for them to join other companies by relaxing the limitations of proprietary knowledge so that they can participate. i think this is a fantastic business opportunity. >> israeli prime minister benjamin netanyahu with our editor at large cory johnson. you can catch this whole interview on our website. up next, we have ben horowitz's take on the facebook/whatsapp deal. that is coming up next. ♪ >> you are watching "the best of bloomberg west." we focus on technology and the future of business. i am emily chang. if it is successful in silicon valley, chances are, andreessen horowitz is already an investor. he has stakes in facebook, twitter, pinterest and dozens of other startups. and now co-author, ben horowitz, has a new book. our editor at large cory johnson sat down and talked with ben horowitz and asked what makes them such a competitor. >> people know us because we write about what we think about building a company. we are not the only ones doing it, for sure. but it is also a relatively new thing. this is what we think about a sector or investing. it is more like this is how we think you should lay somebody off. it's a different kind of the thing. we let them get to know us. that combined with the philosophy of how we can help founders run their company makes us very competitive. >> i wonder, we stumbled around and decided that social media, the cloud would be something we would focus on. who knew that it would be that? i wonder if you see new things emerging. >> drones, 3-d printing, these are areas that are starting to emerge. these have potential to have influence. and he transformational. >> is 3-d printing new? >> patents just expired on 3-d printing. they expired i want to say two years ago. that has created a whole new set of companies. people are going after it. >> is the industry big enough? is are going to be demand for that kind of stuff? >> i think so. and 3-d faxing. just the ability to put manufacturing in anybody's hands so anybody can make anything is something that has never been possible before. >> does the focus on these things mean that maybe we have seen the extent of some innovation around social media? >> but apple just bought one for $19 million. >> yes. >> i do think is a different environment than it was in 2005, or 2006, but i would hesitate to say it is over. think we should be careful about that. >> finally about the bay area, whenever we are in new york, we hear about silicon valley. and we hear about new york and it is the new silicon valley of texas. why does silicon valley continued to draw the best and brightest? or is it? >> it is the best and the brightest. if you look up the names of five companies with more than $5 billion in tech and it all comes from silicon valley and the name five in new york and it is hard to find, even though new york is great and doing well, it is a network effect. if you are a world-class engineer, where should you go? the overwhelming answer is silicon valley. as a result, all the best executives are in silicon valley, or all the ones who know how to scale companies are there. there is a predominant amount of money in silicon valley. the culture itself is very conducive to building companies. all of those things combined to make silicon valley a very strong network and it is kind of like hollywood. how hard is it to make a movie? there are digital cameras. you can make a movie in idaho. but even getting the best key grip or whatever is going to be, you're not going to get a guy who is as good as the one in hollywood. if that's who you're competing with, you start out at a disadvantage. >> what is the cultural advantage? you grew up in the bay area. it is a unique place. >> it is a matter of awareness. everything matters in the landscape. what is going on in programming languages, what is going on in tools to build the environment. what is going on in database technology, what is going on in cloud computing? what are the advances and so forth. silicon valley, that is everyday conversation all the time. you're just in the flow. if you are outside of that, it is not as big a focus. it puts all the burden on you. it is not just in the air. that kind of thing is different. it is a different kind of place. in hollywood, everybody knows everybody, every actor is at every party. it is just a different kind of thing. >> cory johnson with dan horowitz, cofounder of andreessen horowitz. just a quick disclaimer, bloomberg is an investor in this company. pinterest is one of the hottest sites around. ceo ben silverman started a slew of other companies before finding a winning formula with online billboard. our exclusive interview coming up. ♪ >> entrepreneurship is an important life skill, so important that a nonprofit called build is working to teach inner-city students how to start their own businesses. ben silverman shared his own words of wisdom at a 2014 gala where he was honored. he started five companies that failed before founding his online site. in our exclusive interview, i started out by asking him why he chose to support build. >> i was introduced to build by jack dorsey. i think the idea of getting kids excited about entrepreneurship is a really good idea. it feels so applicable to real life, whereas a lot of it is cool to not feel connected to the day today. >> as an entrepreneur, what you think is important to teach kids the skills to get them to stay in school? >> i think a lot of entrepreneurship is about trial and error. it is really easy when you are a student to get discouraged or have someone tell you you're not smart enough. or you're not meant for something. it is building that discipline of taking criticism and keeping going. it is a great thing for especially high school kids to develop early. >> people in technology have such divergent views on education. mark zuckerberg and bill gates dropped out. but you graduated from college. what is your view on how important it education and going to college is? >> i don't know, i think for different kids it is probably different. i think that when i think of what the world would look like if build was really successful, that seems better than having them get discouraged and for whatever reason dropping out of school. >> should a study engineering? >> i think they should study what they are passionate about. engineering is a good one. engineering is a discipline of solving problems. regardless of what you choose later, i think it is a great field to go into. >> so, for the kids here, you are there idle. what is a message you have for them? >> i think what i would tell kids is don't give up on what you want to do. don't let someone talk you out of your ambition. i always think that when you're a kid you put so much stock in what adults say, good or bad, but nobody, an adult or a boss or teacher really knows what is in store for you except yourself. stick with that and you will probably do really well. >> it is a long road. elon musk says that starting a company is like staring into the abyss of death. i have heard it compared to swallowing shards of broken glass. what is your view on starting a company? >> it is a long road. like most things in life it takes a long while. my parents are doctors. both my sisters are doctors. that is a minimum eight-year commitment and often 12 just to be the most junior doctor out there. that has always been in the back of my mind when i think about how long things should take. i think it is a long road for a lot of folks, but if you're having fun and you feel like you feel like you're learning, now is a great time to try it. >> was it a moment with pinterest where you said, ok, now i need to make sure i don't give up. in the early days it took a little while for things to catch on, right? >> there are a lot of times where you get discouraged. for me, what was really helpful was having people around that i trusted and that cared about me first and the company second. for me, that was people like my girlfriend then and now my wife. my cofounder, and mentors and friends who are there to say it would be great if i kept going. >> and now you're managing hundreds of employees. you have come such a long way. what is your vision for what pinterest will become? >> we think people can gain inspiration and plan things for their future. we are trying to build for that. >> what is your favorite pin board? >> i have one for all the activities that my two-year-old cannot do now but i want him to do in the future. >> is urged tough guy in their? what is it about and silberman that we don't know? >> the press really loves stories about lone entrepreneurs single-handedly building things, at almost everything that was great was built by a team of people. i think that i have been really fortunate to put together a really great team of people that all worked together to try to build something great. >> for the kids here, they love new technology. is anything cool out there other than pinterest? >> there are so many cool things. what is not cool? it is an exciting time to download applications and see what kinds of things are on the web for the desktop. >> who are your idols? >> i have so many i look up to. like you mentioned, people like elon musk are amazing. i really look up to other entrepreneurs like jack dorsey of square. i look up to people that are more into arts and science as well. anyone that is trying to build things that make the world better, i think it is really cool. >> specifically, who has given you the best advice along this journey? what has that advice been? >> one piece of advice that i got was actually from kevin hart who founded xoom.. i told him that i knew this would not be a big company and he said why not? he is like, it could be. so may people usually give you reasons why something won't work. and he said imagine what if it would work and operate that way. i always appreciated that advice. >> that was my interview with pintersst ceo ben silberman. the company has raised five hundred million dollars in funding and 83 $.8 billion valuation. they have been testing advertising and have set a goal to start making money this year. tech companies from amazon to facebook are showing an interest in drone technology. but what about drones for consumers? we will show the must own drone for enthusiasts next on bloomberg west. ♪ >> welcome back to "the best of bloomberg west." i'm emily chang. what is the hot new toy for tech enthusiasts? a drone, of course. the phantom two vision cost around $1200. are there risks? our senior west coast correspondent jon erlichman headed to malibu to test one out. >> there is always someone catching a wave at point dume. this is the future of what sports will look like. drones cruising high above the earth, or anywhere outdoors. right now, the man test to vision appears to be the drone of choice. it captured the shots on a trip to the caribbean. >> the phantom two vision comes pretty much prebuilt. it is ready to fly, you go buy it, you take it out, put the batteries in and off you go. >> you can take pictures by attaching your smart phone to the drone. it is not cheap, but it will also not break the bank. >> what kinds of people are using these devices? >> all kinds of people. photographers, real estate, directors. >> drone enthusiasts sometimes lose their drones. and while the faa allows hobbyists to fly drones, it is still illegal for commercial use. >> i think about more of these devices being in the air. it is hard not to think about the risks that come with that. >> we work very closely with the faa to make sure our devices are very safe. >> dj has a private company and will not say how many drones it sells. two years ago this company had 300 employees and now it has 1500. it did project sales of $131 million. >> our senior west coast correspondent jon erlichman. that does it for "the best of bloomberg west." you can watch us monday through friday. see you next week. ♪ >> with the right ingredient -- >> we have sugar and butter. >> celebrity chefs have turned their kitchen chops into sizzling businesses. >> anybody can do this. >> luring us in with their tips of the trade -- >> it's a very easy recipe. >> and the high-stakes drama of the kitchen. >> i'm dying up here and you're killing me. >> tv shows, restaurants, and cookbooks. >> i feel like a burger or something. >> these larger-than-life personalities have made eating into a multi-billion dollar industry. we all know some of the best conversations happen over a meal, so we gathered at a classic new york city restaurant. let's meet the titans. first up, mario batali. shorts, vest, and orange crocs.