Apple's `Amazing' Products: Bloomberg West (09/11)

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Sept. 11 (Bloomberg) -- Full episode of "Bloomberg West." Guests: Ken Segall, former creative director at Apple, and Bloomberg's Paul Kedrosky, Cory Johnson and Jon Erlichman. (Source: Bloomberg)

We will be "on the markets" again in 30 minutes.

? . . live from pier three in san francisco, welcome to the early edition of "bloomberg west," where we cover the global technologyand media companies that are reshaping our world.

I am emily chang.

Our focus is on innovation and technology and the focus of business.let's get straight to the rundown.

Hours after american journalist got their hands on the iphone5s and iphone5c, chinese operative -- entrepreneurs got the same in china.

Is the iphone5c cheap enough to compete?

Season venture capitalists from everyone from googles jerry page two jeff bezos.

What is next from kleiner perkins?

This years america's compass happening right behind me here on san francisco bay.

Just what is it like to be a spectator to one of the world's most expensive sports?

I find out.

First, to the lead.

Earlier this morning, apple held in iphone launch event in beijing.

It will lease -- release the iphone in china at the same time as in the united states pretty with a rebroadcast of yesterday's event in cupertino where the company unveiled two new iphones, the iphone5s and a lower cost iphone5c, but the reaction from chinese journalists may not have been what the company was hoping for with reports think those in attendance were "underwhelmed." apple hoped that it new lower cost iphone5c will help boost market share in china where it is struggling against lower-cost competitors.

With its unsubsidized price tag of $733, critics ourselves -- bricks are skeptical that is cheap enough to be competitive.

Did today's event build up the hype apple need to look at chinese consumers?

For more, i want to bring in doug and clark from new york, and advisory firm that helps companies expand in china.

Doug, you have been obviously following the market development for years.

This particular event, some people are calling it simply a rerun of what happened in cupertino.

What is your take?

Exactly, we do have the time difference of 15 hours between california and china, but that does not mean that you have to have reruns.

This is effectively a repeat.

It had been hyped up diver but -- either by the company or by the media expecting things.

In the end, the c stands for confusion.

With each on a mobile deal, basically there was not much point in having this press conference.

Why do you think the c stands for confusion?

I should add, duncan, that you are based in china.

For many people, many analysts have thought that to really compete in china, apple needs to really go down market and have cheaper phones for the masses.

Obviously china mobile, with whom they have yet to have a subsidized phone, has over 750 5 million users, only 155 million are smart phone users.

This was a huge opportunity to bring on at the midmarket iphones.

The problem is that apple, i think, sees itself more of a premium brand, and there is some sense to say they should stick to that.

They have not priced competitively enough against samsung.

They're kind of between a rock and a hard place.

At the high-end, samsung is a major competitor, and at the low end, we see smartphones coming out.

It is a little bit unclear what is their strategy.

I'm curious what happens in the electronics markets where customers are looking at all of the fun spirit obviously samsung has one of the bigger screen, another have a cheaper phone.

When they go to these markets and their choosing between these phones, what does apple stand for to them.

One michael -- one might result came out with the venus, in the end, it did not work because chinese consumers do not -- do not like to think of themselves as low-end mass.

They like to think of themselves as unique individuals, they use the iphone particularly to express their prestige status spirit however, there is this low rate market that is developing fast.

They're not going to be premium, then they -- i mean basically anything iphone is going to be seen as premium.

Companies like zhou mi and others are exporting -- exploiting the -- after cells and things like that.

Apple has been slow to penetrate fast enough.

That is why we have seen fake apple stores going ahead of demand.

They have become reluctant to embrace that mid market, and it is costing them.

The other point that has been made about the iphone 5 c is you are basically advertising that you have the cheaper version.

Teenagers may or for this because the colors are cool.

But others may say hey, i do not want people to know that i have the cheaper phone.

You think chinese consumers would have that reaction as well, or will they think the colors are cool?


cheap -- $755 unsubsidized.

That is the big problem.

If it is not cheap enough to make a big difference versus a low-end -- and thoughts of zhou mi and other smart phone providers, and/or it is growing at a huge clip, but not cheap enough to make a difference.

You mentioned, like them sung in the note, it is called the no faith in china, you see many female users have such large funds that you never see their faces -- phones that you never see their faces.

This is really a challenge to iphone.

We have not seen the response.

$733 unsubsidized, i want to clarify that.

One last point about china mobile, bloomberg has reported that the deal is going to happen, but it has not happened yet.

Though it will be happening in the near term, you know, what is taking so long?

China mobile has its own unique standards, which is not attractive to apple.

We are really talking about 4g, the world of 3-d lte.

China mobile will deploy that until the middle of next year.

There is no rush at the moment to do that.

Apple has been interest in china mobile, but china mobile can afford to wait.

One wonders whether apple was hoping to announce at this press conference the china deal and it was not happening.

It was kind of like obama's press conference last night when it really was not about anything.

Between apple and china mobile, it is painful to watch, they are stepping on each other's toes.

I think china mobile is in the lead at this point.

Will of course continue to follow.

Again, bloomberg has reported that this is happening, it just has not happened yet.

Bda chairman and founder, duncan clark, thank you as always joining us here on bloomberg west." meanwhile, google was spreading a made in america message.

The company's motorola mobility unit is assembling its new moto s phone at a facility in fort worth, texas.

Yesterday it opened a store to the media.

Texas governor rick perry was joined by global chairman eric schmidt.

Our senior correspondent jon is then l.a. with more.

With this a move -- was this a bold move to plan a media event on apple's big iphone date?

We do know that motorola had been planning a big event for sometime, certainly before the world knew that apple was going to be holding an event on september 10 spirit obviously, it would've been hard to ignore yesterday that this kind of event was taking place.

You're looking for us -- at the video for the motorola x launch a few weeks back.

Yesterday, people got a chance to look inside this facility, and this made for some interesting counterprogramming.

480 thousand square-foot facility, it is employing roughly 120 500 people, right now the company says they are shipping upwards of 100,000 of these phones each week, and at the ceo of motorola taking the opportunity to say hey, there are 150 million smart phones in the u.s., none that are made here at home, and you are just talking about the idea of what is a phone represent.

The sales of this device will be really interesting to try to see if people actually like the idea of having a made in america phone.

The reason they are using this plan, by the way, is because they have all sorts of do it yourself options.

They argue that they need a u.s.-based facility to allow you to make the design and get it to you quickly.

Appliques and time is pushing its all designed in california mantra.

-- apple at the same time is pushing its designed in california mantra.

I want to talk about eric schmidt, he says he moto exit the only phone uses.

He was there as well.

How important is he to this particular launch.

We've talked a lot about the role of eric schmidt.

He is a globetrotter.

While larry page is the -- is focusing on the ceo role, and surge a brand -- sergey brin is focusing on global glass, eric schmidt is the person who goes to d.c. and addresses political issues, speeches, he will go to europe and address regulatory issues, and if he abated it at a motorola event, he can be there, too.

There is a bit of a consultation with google and motorola and that motorola is its own company, even if it is owned by google because that is the way regulators wanted.

They do not want to frustrate any of the key android partners like samsung, lg, htc, and that is certainly why it will be tricky if larry page were to show up at these events, show some special attention to what motorola is doing, but at the same time we know how hard it is for companies to have individual phone second standout.

Having someone like eric schmidt at one of these events could certainly help.

All right, jon erlichman, senior west coast correspondent, thank you.

Some of the titans of technology, yahoo!

Ceo marissa mayer, kleiner perkins john doerr, facebook's mike -- mark zuckerberg, they are scheduled to see get the tech crunch disrupt conference heard our editor at large cory johnson it there.

What should we be watching for from tech crunch disrupt today?

This is an interesting conference because some of the in biggest names, mark zuckerberg, marissa mayer's, john doerr will take the stage shortly.

These are people that everyone in silicon valley listens to and wants to hear what they are doing, what their big thoughts are, what their executions are going to be.

But this congress -- conference are some of the small things you will never hear of.

These companies that want to be something.

It is a haystack of all kinds of stars.

Within a haystack are a few needles, some companies that will amount to something.

People will discover that.

There are some bankers certainly this place, venture capitalists trying to figure out which companies to back, and tried to figure out which of these countries have really unique ideas.

It is a really interesting congress -- conference and that is little start of a giant entrepreneurs who have really built on big business is all getting together to talk your.

We will be going through this haystack over the course of the day, listening to some of the big shots here and what they have got to say about the evolution and change is going on in technology, not just in their business of the about -- businesses, but about all businesses.

It is certainly not easy to find the needle in a haystack.

Cory johnson, our editor-at- large will be back with you after this quick break.

We are adding an additional hour of "bloomberg west" to bring you marissa mayer and mark zuckerberg's speeches live.

You can also watch us streaming on your phone, tablet, and at

Still to come, apple broke a record last month when it sold a $17 billion in bonds.

Now verizon has blown that record out of the water.

That is next.

Welcome back to "bloomberg west." i am emily chang.john doerr of kleiner perkins had just taken the stage.

Let's listen in.

That is because we are paying -- insurance companies are telling countries what to do, they're paying the doctors per per seizure.

Instead of paying what is called secret service, we put the doctors in charge and paid them for value, i think we could transform that part of the economy.

Technology has a lot to do with it.

Just for five years ago, there was more technology the average safeway store than any physician's office because none of the medical records were in the cloud.

Now, over half the physicians are using medical records process.

The number one.

Does obamacare help or hurt the situation you?

Helps enormously.

The second is education.

Education costs too much, and it is not available to enough people.

A lot of technology executives and entrepreneurs have been working in this field for a long time.

Remember when bill gates said he was going to put eight computer in every library?

Basically, we have not made much progress until honestly went like we have computers in every library now went like that it not solve the problem appeared we did not see educational achievement improving.

Acknowledging has not been at the heart of it.

At the heart of it i think is changing the way we teach and empowering teachers, getting better people into that percent -- profession 30 c two examples of things that are getting scaled very rapidly.

One is, cap me for culinary students, and the other is the core sara -- the open curriculum.

Can i jump in?

I saw yesterday, it sounded like a trillion dollars in student debt now.

I don't know if that is right, but i thought it was.

Do you actually think that talented, young people should consider not going to college at this point because of that, or do you think that they should still go to college if they have the opportunity to?

I think they should go to college if they have the opportunity to.

Do think college should be cheaper?


The third area, which we take for granted, is continuing to push forward moore's law.

I think it is going to run out of steam in the next four to six years.

We just assume, we have all benefited from moore's law doubling every two years, that is 40% improvement per year.

At some point, you can only get the transistor so small.

You think we have for to ur to six years left -- before the cost of a new fab facility -- at some point, you do not have enough data, but there is a second moore's law that is not as well known.

Decides the doubling.

That is the price of the next generation fab facility is going up at more than moore's law.

The most recent new fab from intel cost $7 billion.

So there is initiative at kleiner called low power everywhere.

And it pays the technologies that are essential for this, the battery, you've seen only marginal improvement in batteries.

But the displays, which is where most of the power is wasted, if we peeled one of these apart, you would see underneath it a very bright, white backlight.

Then we filter way most of that energy in the display.

So many percent of the energy and the display is wasted -- you never see it.

There is a breakthrough that will turn a number around, then there is the memory in the processing power.

Who is doing that?

A company called luxvew.

I'm guessing you are an investor in a company?


And i am not running a commercial for it because nobody here is going to buy displays.

But we will all been at it from the the the skills the right way, which i think it will.

Instead of having a bright white light and the filtering the colors away that you don't want, if every pixel, it puts down two red, two green, two blue directly a massive led's. if one fails, the other won't work because you need the whole screen to work.

This will deliver nine times better brightness, you will see them outdoors with lower battery requirements.

Also, they can be on curve, so somebody was going to make a great watch, you might want to use it there.


what about near-term, what are you working on near-term?

Near-term, most of my activity and that of the partnership is in what i have called social local mobile.

In and around the cloud.


What are some of your most recent investment in activity than that?

I am one of eight partners pushing investments forward.

The most recent investment i made within my fitness pal.

It is a great company that is bootstrapped by two brothers, and they build a profitable business on their own savings, and now with the advent of the smart watches and niche up bands, they have 45 million users around the world.

The biggest database of foods and weight, and their users last year lost 100 million pounds.


Not any other ventures -- how much did they gain back, though?

Well, the retention is a really interesting part of the business.

The subscribers take right around new year's. people sign up for the new resolutions.

But it works.

It integrates, it talks to my scale, it talks -- it becomes a dashboard really for your health.

You asked so what else.

Right before that, i joined the board of zynga, and i am very impressed with don matter, it is a public company, so i cannot say -- if they the right guy to counter mark pincus?

Well, mark recruited him.

Mark is as brilliant, driven, creative entrepreneur.

What i'm telling you is in the public record.

When don joined microsoft , the xbox was losing a lot of money.

Like, more than $1 billion.

In three years, they turned that around so that it is making more than $1 billion -- how many board meetings have you been in with the three of them?

A few.

Three board meetings and a half- dozen other meetings.

How many times has mark yelled at him?

I have never seen mark yelled.

He is keeping his cool and realizing you is not the ceo anymore?

He loves working with don matchtrick.

And we need both of them.

Quite so you think you are bullish on zynga.

Quite yet, i think i can say that here at what we have got to do is get zynga's stock price to where god intended it to be.

I love when you say stuff like that.

What is the stock right that god intends the net to be at?

Well, if you have got a floor, i would like to see it.

Tell me about up there.

What is it.

Leaders include an man who did all the macro as works for steve jobs.

I can't say much more about what they are doing now.

Can you say anything more about?

It is a non-gem -- option team, and they were rethinking fundamental capability of the glad to optimize it for mobile.

And that is what god wants them to be doing?

[laughter] i have not checked in with got on that one.

Laborde, you are on a clipboard a board meeting, and that -- flipboard.

They have 85 million users, over a million people creating their moan magazine, you know tech crunch have a flipboa rd magazine at the end of every day, you can put video in there.

So the way i think of fli pboard, if you do not have it on your smart phone, if you do not have on your ipad, you really should put it on there.

It is just a beautiful example of how to do your user interface and design well.

The way they think of it is the web is huge.

On average, uninteresting.

So what flipboard is is the curated web -- how may people use flipboard already or have at least tried it?

Amicable have on your smart phone?

Have a people are paying no attention whatsoever?

[laughter] it is the curated web.

Most importantly, the users put together the really great stuff.

Yeah, but you are literally preaching to the choir at least for me.

The digital stuff, all of these are digital companies.

So how much of your time is spent on near-term, digital opportunities and how much is spent on longer-term issues with what we talk about, education, health care, energy, stuff like that.

I had not really thought about.

The majority of my time is on digital, but that includes near- term and larger term -- longer- term.

The second largest commitment is around disruptive energy innovation.

The science is what is making that so appealing.

If you get it to work right, the markets are enormous.

To talk about energy, creation, transmission, storage, or all three?

All three.

What are the biggest opportunities over the next decade?

The game changer would be to instead of have that ready -- batteries improve 1% or 2% a year, it would be to triple, 300% in batteries.

If you can get -- all batteries cost whatever they way.

That is the first rule.

If you can find a way to double or triple the energy density of batteries, what happens?

You need less stuff to make the same energy.

It weighs a lot less, so if you are putting into the car, you have got to haul less of it around, and my dream is we can make electric vehicles as cheap or cheaper than internal combustion.

And do you see any opportunities here to really do this?

We have been talking about battery capacity for 30 years, or at least 20. the first laptop.

Is this time going to be for really ipo 00-- for real.

I've seen a team do it in a lab.

Not my lap, but their lab.

I don't have a battery lab at home.

You know what, i would not be surprised if it was right next to the bowling alley.

Have you invested in this company?




i'm getting a question from the audience.

What is the company called?



That is a good name.

Log onto

[laughter] so merrymakers usa inc.

Owns of -- comes up periodically and talks about how we are bankrupt as a nation.

What is going on with that?

Are we going to make it?

I'm very optimistic that we are going to make it.

If you have not seen it, it is online , just at the time she joined us, which i think was only a couple years ago, she had started a project at morgan stanley, but the idea was let's look at the u.s. government as if it was a business, so we will build a balance sheet with assets and liabilities, we will look at government services as if they are runs linux, what do we spend on health care, what is the cost and so forth?

Jessica to the chase, her conclusion was we are bankrupt.

That is assuming you give no value to national parks and mount rushmore, which of course are very valuable.

The other interesting conclusion is a matter how much you cut expenditures or you raise taxes, you are not going to get there unless we get the economy to grow.

So growing the economy and growing it faster is a way bigger thing than raising taxes or cutting expenses.

That goes to the question -- how do you make it economy grow?

How degenerate -- how do you generate jobs?

And you are working on it.

The entrepreneurs are.

The company that backed that generated i think 350,000 jobs in the period of time we have been investing, and that is good.

What is going on at kleiner in general?

We are super busy, super aggressive, i think in the last two years, we have made 50 or so digital investments, 30 in consumer, 20 and enterprise.

Security, knows the prizes -- no surprises, a really hot area.

My partner is a lead.

He was on a panel, the whole security paradigm is moving away from signature tracking of the fibers as after they are in your machine -- towards defending yourself from the government.

Well, no.

This is irrespective of where the security threat comes from.

It is focused primarily on data security -- yeah, from the government.

I want to come back to kleiner -- you are not biting on a segway, are you?

-- that segue, are you?

Except that is going on as we have a very active connection at home, and i think the second screen at home is up for grabs.

Ben gordon is backing a team that i think it's going to reinvent second screen for television.

What company is that?

If name is n3work.

Thank you chen has sponsored an investment in dealing with college debt, of all things, and randy is working on a project for personal mobile financial services we made a major new investment in digital health, electronic medical records that i hope we can announce soon.

A lot of stuff going on.

A lot going on.

Mary meeker is just everywhere.

The d-we talk about the nsa for a couple of minutes because i get the feeling that we have possibly divergent opinions on that.

I'm concerned that the government is looking at as much data committee fact that silicon valley seems to be complying with it, although that is arguable.

I looked at how concerned mass populations might react in knowing that they are being surveilled by the government and how that can drive countries crazy.

Do you share these concerns?

Are you less concerned?

I am concerned about this.

This is a top issue and highly debated.

My perspective on this, michael, is today a september 11, and i like to think of myself as a sort of patriotic, red blooded american who believes in technology executives, all citizens of being involved in our government.

I think this is being debated.

I know it is happening.

Obama has appointed a special commission.

I have been in missions with ceo's of yahoo!

And facebook and google and microsoft, i am a member of this techno- organization, which before this news broke was advertising that we -- advocating that we update privacy laws in the country.

It is a serious and important issue.

I think -- with the appropriate safeguards -- now i am speaking as a citizen, i am comfortable with people knowing the to and from of my phone calls.

I'm comfortable with people knowing, with the appropriate safeguards, where my e-mails have been sent or not.

I believe ever since i started using a credit card, my privacy is in the hands of someone else.

They know where i've been, what i bought, the price, all of that.

That is a choice i am making.

It is a trade-off.

I think we have got to have an independent and rigorous judicial oversight of the executive authority.

I think less unchecked the bureaucrats and executive authorities will certainly go too far.

I think he was earning this week to see google and microsoft, who hardly ever agree on anything, be joined by yahoo!

And amazon, i think within the next, to sue -- i figure it's facebook.

Facebook, not amazon, to sue the federal government to insist on more disclosure oh.

They were petitioning the fisa court.

The way i see it is we did not have the nsa to protect us from these creative enemies, and we end up in a situation that is far worse than if we just chilled out a little bit.

When i just abolish the nsa?

I assume you would be in favor of that.

No, i'm not in favor of that.

But i'm not in favor of the premise that the government creates enemies.

Did bush?

I think a man -- america's standing in the world was at an all-time low during the bush of administration.

Obama, regardless of who i support it, the data it show that america's standing in the world showed up.

And that is good.

I appreciate your outlook on this, and the y for your time.

All right, john.

-- and thank you for your time.

[applause] venture capitalist at john doerr of kleiner perkins at tech crunch disrupt with techcrunch cofounder michael arrington talking about some of his favorite investments ranging from fitness tech, security, talking about recently joined the board of zynga.

Clutter perkins of course a huge -- kleiner perkins of course a huge investor in zynga.

He think the founder, mark pincus, will give mattrick the space he needs to lead.

Also talking about nsa and surveillance of american citizens thing he is comfortable with the appropriate safeguards of the government knowing who he is e-mailing, who he is calling, but that there should be rigorous oversight.

I want to bring in our editor- at-large, cory johnson, who is standing by at tech crunch.

What do you make of doerr's, today?

John doerr is one of my favorite people to listen to.

He can talk about the future like no one i have ever heard.

I can listen for hours, and i have.

Among the things that jumped out at me, listening very specifically to what is it about zynga, it is clear to me at least that the reason he joined the zynga board is what he said -- he wants to get the stock price up.

Kleiner perkins is one of the largest holders of the zynga shares.

It is not clear to me whether or not they are profitable.

They clearly want to have a bigger profit from this thing.

They left a lot of money on the table one mark pincus and others were selling.

Kleiner perkins did not get out of that investment.

When you listen to him say my goal is to get the stock price up, believe what he says -- that is what his goal is.

I also thought the comments toward the end of the talk about today being september 11, but here we are listening, one of the preeminent voices in silicon valley talking about technology, company that he works very closely with.

He was one of the early investors at google.

Also very involved with facebook , amazon at the mention, not in a lawsuit, but also on the board at amazon.

Here we are with technology at the center of so much of what happens in the world, from a political standpoint, national security standpoint, that we go to a guy like john doerr to help us understand, gets in context as to how the world works.

I think that is fundamentally why we do this technology show because it is about technology, it is about innovation, but the innovation technology and business are all about so many more things than this little community of investors and companies in silicon valley, and it becomes very clear on a day like today.

Kleiner perkins became famous for those early investments that john doerr lead in google and amazon, but critics say they largely missed the social networking wave.

They relate to facebook, they were late to twitter.

John doerr talked a lot about some of these more forward- looking investment in energy, and education technology.

Do you think he is really trying to prepare -- repair kleiner's reputation at this point?

Do you think any the legendaryness of kleiner perkins has been lost?

I think it was fair to say that there was a time that kleiner perkins with the single leading firm at silicon valley.

Let's not forget other companies that they back.

History is written by the victors.

No one is talking about, a company that john was on the board of that turn into a accounting scandal.

Martha stewart living.

There are a lot of companies that john was on the board of that are big failures.

That is ok.

That is how venture capital worse.

Not everything works out.

It is also fair to say i think everyone in silicon valley still listen to what john doerr have got to say because he is a great big thinker.

Whether or not they get in all the right deals does not mean he has a lesser view.

And of smart people at kleiner perkins can figure with the world of the -- the future of the world is.

A lot more venture capitalists are playing in the valley, making some big, important investments.

It is not just kleiner's ballgame anymore.

All right, cory johnson, our editor-at-large, thank you.

A programming note -- we are adding an additional hour of "bloomberg west" this afternoon.

Yahoo!'s marissa mayer and facebook's mark zuckerberg will be at tech crunch.

We will bring their speeches live at 2:00 p.m. pacific, 5:00 p.m. eastern right here on [indiscernible] -- right here on bloomberg.

You can also watch us streaming on your phone, tablet, and at

? welcome back to "bloomberg west," on bloomberg television, streaming on your tablet and your phone.

I am emily chang.

Verizon had the largest corporate debt fell in history.

It failed topped apple's record $70 billion sale in april.

Rison helped boost the companies cap spiral after it agreed to pay $130 billion to buy out votaphone's stake in verizon wireless.

Always get back to cory johnson -- i want to get back to cory johnson where venture capitalists john doerr has just taken the stage.

Cory, take it away.

John doerr with your, yes, but there are a handful of important venture capital is as i mentioned, not to say handful, and article -- a few of them could be interesting.

One guy here to figure which of these companies are worth listening to, and what is going to happen them, is mark from menlo ventures.

When your colleagues or your, how do you find the good companies?

We're looking for companies that are addressing a really big argan and have the ability to be billion-dollar companies.

I think that is what it takes in today's market to go public.

Those are the huge opportunities that really makes returns for venture capital.

I see a lot of ipo's 150 million dollar, two hundred million dollar ipos, some of the biggest companies in all technology came out with offering of less than $500 million.

If you go back historically, offering below $50 million.

Very big companies third way cigarette intel, i'm a result, very small ipo's. -- companies.

When you think of intel, microsoft.

We will air later from facebook, yahoo!, chinese startups not too long ago.

Are there countries that could lead to that, and do you really think we can find?

I'm sure there are.

One of the great things is the markets are open right now.

One of the biggest differences in the ipo market is the change in the way that stocks are traded.

Going from fractions to decimals.

Not get to geeked out, but i wonder when we went from the gap between the bid in the ask was in eighth, a quarter, we have gone to pennies.

You see that as a problem that is hurting companies, why?

It is a huge structural problem.

When stocks traded a penny, you think of a very small cap sto ck, there is not enough profit for investment bank to be a market maker in that stock.

Ranging for the trading -- to match the buyers and sellers.

There are still markets made in every small cap out there.

That is true, but the bank cannot afford to hire a research analyst.

It just is not lead to the kind of -- there is no profitable trading in a stock that trades 10,000, 100,000 trades a day.

The number of ipo's that raised 50 million or less has dropped by over 80% in the last 10 years.

Over 80%. many ipo's. we went from 500 ipo's a year before 2001 today about 100 a year.

From my perspective, the research that was being done back then, a lot of it, particularly for some of the smaller companies, even montgomery securities, all these banks that are gone, some of the research was crummy and it was promotional and it was not actually giving insight to investors, it was just promoting stocks.

Do we really want to go back to that era?

We have had an irrational exuberance back in 2000, and i think there needs to be quality research.

There has been a separation of the research and the trading, so i think that that is to be controlled.

Fundamentally, if you have less companies going public, you have less investment, fewer jobs treated -- is that true?

The exit is not to be selling to the public, it could be selling to cisco, intel, facebook, all of those countries have been very active acquirers.

That his record there are two ways that venture capitalists and employees make money and that is your company goes public or get sold to a public company, but when you take away one of those exit opportunities, it is fine when you have a robust m&a environment, but that was awaited of interest rates go up or we going to an economic slump, now there is a bunch of company that have no exit.

Do you think that debt consolidation could actually be undone?

I think we will see a pilot program very soon.

There was a bill introduced to allow tech marks to go up to as much as $.10. any jobs act, allows for the sec to do programs to study it and stocks to trade in increments of up to $.10. i think there is a good chance we will see it reverse.

A bill to help investment bankers make more money, i do not know if i like the odds of that.

Mark siegel, menlo ventures, really interesting stuff, thank you very much.

The ipo could mean a lot to companies here.

We will see if that gets to happen more in the future.

Thank you, cory johnson, cory johnson at tech crunch disrupt.

We will be back with more "bloomberg west" in just a moment.

This is "bloomberg west or ." you can also watch us streaming on your phone, tablet, and at

I am emily chang.

Facebook ceo meg where facebook has been blessed for several years now, and china, sandberg met with head of china's state council information office pictured here to talk about issues including the important role facebook lays in helping chinese companies expand overseas.

That is according to a statement posted to the agency's website today.

Coming up on a late edition of "bloomberg west," a special edition starting at 2:00 p.m. is seven, 5:00 p.m. eastern, we will have marissa mayer, the ceo of yahoo!, mark zuckerberg, ceo of facebook live from tech crunch disruption at 2:00 p.m. pacific, 5:00 p.m. eastern.

What am i, i am emily chang.

Today, on a special late edition of "bloomberg west," we are starting an hour early to bring you some eye are and mark zuckerberg speaking live from the techcrunch disrupt conference.

Affected :00 p.m. pacific, 5:00 p.m. eastern on a special two- hour "bloomberg west" right here on bloomberg television, streaming on your tablet, and your phone.

It is 56 past the hour, which means bloomberg television is on the market.

Alix steel has more.

Let's get you caught up were markets are trading.

It is a pretty makes a day for stocks.

The nasdaq really be outlier here in the red.

Of course, apple disappointing, dragging on tech stock, the svs higher for a seventh straight it.

-- the s&p is higher for a seventh straight it.

It is trading above its visions level at 1685. it does not really seem to matter right now.

I want to highlight marriott, ubs upgrading shares of the hotel train from neutral to buy . it says it will help improve earnings overtime.

Stocks seeing improvement today.

Second, verizon, the company launching a $49 billion bond deal today, the biggest corporate bond sale in history.

It will use the money to help finance its $130 billion buyout for a $.45 stake in its wireless operations from a vodafone.

For more on verizon's historic bond offering them i want to bring in mike mckee.

M, talk about the premium that we saw he appeared like that of the -- mike, talk about the premium that we saw here.

220 five basis points over treasuries, that apparently is a big number when you think four months ago, apple sold with almost no premiums to treasuries, which was the largest foreign sell previous to that, only $70 billion.

Obviously the environment has changed a lot, and what change the environment?

Ben bernanke.

Market rates of gun of across the board.

Verizon has got to pay more because -- never the less, historically a premium that they paid is it really that huge?

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