Tech Giant Gives Back: Bloomberg West (03/07)

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March 7 (Bloomberg) –- Full episode of “Bloomberg West.” Guests include Salesforce’s Marc Benioff, Sierra Maya Ventures’ Amish Shah, Moms Demand Action’s Shannon Watts, Harvard Law School’s Susan Crawford, Cogent Communications’ Dave Schaeffer and Bloomberg’s Ari Levy and Megan Hughes. (Source: Bloomberg)

Live from pier 3 in san francisco, welcome to the late edition of "bloomberg west" where we cover all the global technology and media companies that are reshaping our world.

I am cory johnson.

Class warfare and san francisco, but protest are giving back.

Bloomberg news tech editor joins us right now.

I want to talk about this issue.

I think it is interesting that in this iraq technology with so many jobs, the city takes off.

The city has done a great job of creating jobs.

For the past several years.

The other side of that double edged sword is real estate has gone through the roof.

The most expensive city in the country to live in.

The issue is, are we going to create economic growth, how will you react that people cannot live here?

It is interesting that the workers wanted to live in the city apparently and that is great oh stop -- great.

The people -- the thing people like about the city is in the way it is.

But it has been a diverse city.

A city where -- economically, that is part of it?

It is a challenge.

It is hard to understand necessarily what the root of it is as people have very different views about what the problem is and there are a lot of folks who do not see it as a significant problem.

That is why halve the hole bus issue where you have buses that are bringing people from the city down to silicon valley which should be good for the environment.

A yes it seems as a symbol that something they may or may not -- listen to what he had to say.

You have a serious issue.

The buses that are very symbolic.

A very physical and you can see what is happening.

People are getting thrown out of their homes.

Tech is not organized in a smart way to give back but we are changing those things and sales force is a great example.

We took equity and our employee and we started in 1999 and putting in a foundation of that was -- we had no profit no employees.

But now we have given away community service.

Interesting stuff.

Is easy to give when you have nothing.

Ari levy, thank you very much.

We'll have the full interview later.

Our top tech headlines.

Visa/mastercard forming to a new group to rededicate for the car security for online and in-store purchases.

They will work to speed up the emv chip technology in the u.s. used elsewhere.

After the recent breaches at target and other retailers, an area of focus.

They have been given until october 2015 to adopt the chip technology which experts said should be more secure than the magnetic strips. -- -- it had a big public ipo.

It is about $2.2 billion.

Despite to the $2.2 billion market cap, no annual profit since 2009. the company makes money from people downloading coupons.

Box projecting is in, will double this year.

-- its porofits will double this year.

The ipo is expected sometime this year.

They are ramping up sales in advance of that ipo.

Now the original crater of a bit scornful.

Newsweek story identified a 54-year-old -- of bitcoin.

-- newsweek story identified a 15 year old -- 54-year-old japanese american resident as the cofounder is that he's denies it.

I have nothing to do with it.

I was an engineer doing something else.

So, is he or isn't he the inventor of bitcoin?

Jon erlichman, i got the sense it was a zoo down there yesterday.

It was an there are reporters back here today.

We have been here for several hours cory.

He has not been seen yet.

We rank his belt a couple of times.

As you pointed out, he did take time yesterday in an extensive interview with the associated press to say he is not the guy was i he did not create the bitcoin.

Newsweek is standing by its story.

The world can form his own opinion about where it is going to go.

We have been asking neighbors if they know mr.

Nakamoto including the woman who lives across the street.

She said she has no clue if he is the creator and has not seen him too much walking around the property.

She said it was more common for her to see his mother tending to their garden.

You will not see bitcoins lying around the yard?

Any clues?


there is a certain fascination with this story and as the newsweek story came out because of the fact there's been so much secrecy surrounding who actually created bitcoin and the possibility it was a group of programmers and then all of a sudden the story suggests an individual living and this sleepy community and there has also been in the suggestion that creator would've given the rise of bitcoin an enormous amount of wealth at their fingertips got everybody interested.

You heard what he told the ap and will continue to say.

We'll be sticking around to see if gas in the more to say.

Will be back with you in a little bit.

A judge has overturned a company to own -- fine to operate a drone.

Our washington correspondent from d.c. he has joined us via skype.

Megan, tell me about to be ruling.

Top highlight,, dr -- the highly -- pilot , drone pilot, he was charged with reckless driving of the drone.

It was a promotional video he was doing and 2011. you can see in the video he is going under bridges and over pedestrians and over cars.

But the judge in this case they came out of the ntsb in denver said, there are no enforceable rules when we are taught about this kind of aircraft.

It was shot with a drone less than five pounds.

It had one wing.

There is no precedent for rules to enforce.

The faa has contended that commercial drone and use was a band while they are working on the rules.

This blows all of this out.

Real interesting.

Let me ask you.

Are we looking at a situation now where all systems go, fire up your drones?


It will be a gold rush like back in the day.

Literally, last year, a lots of people got in early.

I was one of them with a company called sky catch.

For the early investors and entrepreneurs having big fish is about to be drawn the world.

And amazon with a pr stunt made big news.

That is one of the right steps in the right to direct and to get to where we need to for the commercial drone market.

Does the faa has the right?

I will tell you from the drone industry groups, they said he underscores the need for rules.

The reason this judge made the decision are there are no wolves on the books and they want to see these rules that were supposed to come out and they're supposed to come out in november.

For commercial drone use and they keep getting pushed back.

They want to be rules on the books so some the bigger players can feel confident getting in here and what they are investing is happening legally.

They are seeing a of this is moving overseas to cut there are still uncertainty here.

They are interpreting this decision as a push for rules.

Let me ask you.

We are showing video, talking about the big business to liberate beer to ice fishermen.

-- delivering the beer to ice fishermen.

What is a big business you think will open up if the rules are dropped?

A lot of people do not know it is already going on like a megan said all around the world.

The u.s. is a little late to the party.

We are waiting later.

The reality is it will open up a whole bunch of markets.

Data, sky catch has a lot of companies.

It -- agriculture has been huge for us.

Energy, it will open up a lot of markets.

Let me back up.

Agriculture, specifically what?

Think about your farmer and your crops.

And a lot of times, they do not know what is happening and they can survey.

The drones going and seeing if they are being invested by insects and they can do it that way.

On the agriculture side, you can look at the entire landscape.

There are thousands and thousands of acres of agriculture spots.

That is one the big things we are seeing.

Replacing men or women out there in the field and getting the drones.

Getting the data.

We call it aero -- the photos and watching what is happening.

Uconn the amazon thing apr -- go ahead.

We were talking about flower delivery.

All of these companies have been receiving letters from the faa it was the first fine but today they're reading cease and desist letters for a dozen companies.

The faa is having trouble keeping track.

For more than a dozen companies, they got the letters.

Maybe you can weigh in here.

It makes the letters worth less.

It to doug.

How they are talking about the drones, anything under 400 feet, the faa does not care about the stop a right direction for the battle.

To go along with your point, delivery is going to be one of the markets that will take off for sure.

Going back to your question, a pr stunt.

You are not going to see what you saw on "60 minutes," happening soon.

You will see, a pizza truck, a fedex truck will come on your block and you will see a bunch of drones pop up.

They will go just like your mailman doesn't right now.

You really think it was a pr stunt?

Yes, it was.

It was a pr stunt.

It was cyber monday.

The spend $6 billion a year in shipping.

For amazon, if they can cut and even 10%, look at all the money they would save.

That is one of the big things.

Since we are on the topic, why the faa has done the legislation a little earlier.

This is going to open up a huge economy and all of these jobs, we are looking at $100,000 -- 100,000 jobs in the next two years.

That will open up even more jobs.

We are talking about billions of dollars.

That's been close to a hundred billion dollars invested in drone startups.

Megan hughes and amish shah, thank you very much.

Salesforce ceo, marc benioff, the history of salesforce and corporate responsibility and income inequality and -- in sf.

That is coming up next.

? welcome back to "bloomberg west," i am cory johnson.

Is dorian nakamoto really the crater of bitcoins?

It has been a relatively wild 24 hours for basically what does a sleepy community in temple city.

The pasadena area.

If you're coming somewhere from like beverly hills or hollywood, a geographical landmark.

If you think about how all of this unfolded, this explosive "newsweek low post story where dorian nakamoto is.

The reporters are making their way here.

He eventually addressing the reporters.

Some situations where you have a story like this, the person the story is about will make a comment.

His was about to the idea of who is interested in giving me a free lunch.

As a result of a he went with the associated press reporter and they drove off and the reporters followed.

It was contract on social media.

People got interested because of that part of it.

It has gotten that much more interesting.

He said i am not the creator of bitcoin.

Bitcoin users seem particularly fanatical about who the early adopter might be.

Have they shown up as well?

People who staked so much of their lives in bitcoin to see the man himself?

I would say no.

This is mainly reporters here for now and maybe we are trying to get more details.

You are right about it.

There were people aced on the story before we heard from mr.

Dorian nakamoto who were very angry that there were revelations about who he was.

I think the other reason you have seen people discussing this online and through social media is a look, this is a somewhat comparable figuring out what is fact and what is fiction.

Twitter and facebook have become flat -- cap -- platforms we use.

Maybe a little different because we have one story from a very influential media organization.

And you match that versus the commentary coming from the person the story is about.

People continuing to weigh the back and forth.

You have some very strong commentary online absolutely from those who are backers of this currency.

As for them showing up, not really.

Also interesting is the fanatical nature.

It is fascinating that people in a great images are upset about the fact that the interest led to who created an track the guy down.

They have their reasons for it.

There's been a lot discussion around that online.

Through the general public, there will be a fascination on creators.

Whether something perceived as good or something bad.

Many would argue we are talking about something that has been transformational was off for years, people talked about a digital currency becoming a reality.

You have seen, especially those who were early members of the club, have become incredibly wealthy people be cuts of bitcoin.

It made the story more interesting.

Somebody who is the creator and maybe worth so much money, we do not really know.

Living modestly here in temple city.

There is a fascination type of both the bitcoin and secrecy surrounding the creation that you expect while some may be frustrated of the revelation, true or false, there are so many more people who are curious about the story overall.

Jon erlichman, thank you.

The author is going to be on street smart.

We will hear more about the terrific job they did reporting.

All right.

Sxsw kicks off today and where the insiders guide of austin, texas.

? welcome back.

Sxsw interactive conference opens up today in austin, texas.

Pay attention.

Sam grobart breaks down what everybody will be talking about this weekend.

But heading down to austin for sxsw, not going but curious?

Three things everybody will talk about.

There is a paradox.

Everybody loves comic to austin for a laid-back vibe.

If a corporation blows out his budget to throw a part, it kind of ruins it.

Last year, the pandora party was broken.

Lady gaga was denied a doritos party.

We are getting into dangerously close party -- territory because it is too crowded.

This year, there are more sessions discussing the role of women than ever before.

17 of them.

After leaning in and analyzing marissa mayer's every move thomas it would become a huge issue.

First, recognize that there are not enough women.

Second, to talk about it a lot.

The third is when women in technology is not a topic but a reality.

It is almost too obvious to bring it back but facebook $90 billion purchase of a whats app.

Some might think it will be a nubber messaging applet but they will be wrong.

Messaging apps have been a big issue.

The conference a darling were -- and clearly popularity is no indication of future earnings.

Otherwise, we would be sitting around talking about groupme.

That was sam grobart.

More on "bloomberg west" after the quick break.

? you are watching "bloomberg west" where we focus on technology and the future of business.

I am cory johnson in for emily chang.

Salesforce, 15 years ago, it was founded in san francisco.

Even then, the company had a focus on poverty and those less lucky.

It continues to have a focus on poverty.

Hoping to raise $10 million for anti-poverty programs in the bay area.

I spoke to salesforce ceo, marc benioff, earlier today.

15 years ago, we started salesforce in a little apartment.

And it is now is bigger.

It is bigger.

We do 5.3 billion dollars this year.

13,000 employees.

The most exciting thing is to give back to the community and you can see how today we were able to get 15,000 pounds of food donated to the food bank.

It has become a really big issue.

I am surprised it is taking hold.

Why do think some people are really ticked off about the inequality?

Why now?

You have a serious issue.

You have the buses that are symbolic.

They are very physical.

People are getting thrown out of their homes.

Tech is not organized in a smart way to give back.

We are changing those things.

We took a percent of equity and profit and employees' time.

The day we started and put it into a foundation that was easy and we had no profit, no employees.

Now, we have given away i've hundred thousand hours of volunteers hours and grants.

We have partnered and created -- and we are seeing we have over 12 companies and san francisco that the committed to over 500 million dollars in charitable contributions.

We are really focused on $100 million.

This is an exciting moment.

Is a drop in the bucket for the technology companies.

What do you say to the comments were not doing things like this?

There is a drop in the bucket and there is more we can do.

Look at where we are now.

It is amazing.

This incredible city and infrastructure.

A great place to start a city.

Stubborn doors are coming from -- entrepreneurs from all over coming over.

Do not adjust home to take from us, giving back.

Taxes are part of but taxes do not do everything.

That is why we have this amazing concert happening and a homeless situation happening at the same time.

What also injuries me -- interests me in the bubble, it is a lot more urban.

A lot more focus on the city.

You have always been here.

Not in the valley, why?

I did not want to drive down anymore.

[laughter] that is how people feel.

It is more fun in the city.

The restaurants are better.

More imagery and more exciting.

Better to be in a city campus.

What are the limitations?

Hiring may be more difficult?

I found hiring to be easier because we have a mass transportation.

Which is a huge part of san francisco.

It is right underneath our office and we have a direct line to every major city and in the bay area.

In the south bay, you are limited by who can drive.

The proliferation of high-speed internet is more abroad.

Salesforce is [indiscernible] i think people want a change and a shift and that is what is happening.

There has never been a more exciting time for technology.

Nevermore innovation.

Within two miles of where we are standing, there are thousands of new companies and that is amazing and has never happened.

Let's remind people they have to give back and not just take.

That was the freakishly tall ceo marc benioff.

We have new information about how things are going on another important tech company, box.

Revenues will double to $200 million.

Emmys $100 million they filed earlier this year.

Sources said the plan to make the prospectus private -- public in the next two weeks.

Ari levy is here with me now and the lovely leslie packer.

What does it say about the box?

200 million dollars is the first time we saw the number.

We knew it was big but not that big.

They are getting quite momentum.

It has been around for nine or 10 years now.

It'd doubled to $200 million.

It showed is that companies are finally adopting the product.

And the sales expansion, the model they put in place is working.

They have a thousand employees.

To have a prediction in front of a ipo would be strange.

We do not know.

We have not seen the filing.

What business customers pay up front so they know they have the business in the back -- bag?

Unlikely there is a forecast on what the revenue will be.

In fact, it would be illegal.

The odds of that happening is slim.

It is a subscription business.

You know when you hit the scale they have reached, you know you are in advance.

Describe the box business.

Quit it is storage in a collaboration of the cloud.

It allows you as an individual to store your documents and the data one time somewhere from any device to be available on any other device.

And take the document and share them with other employees in a secure environment so you can create a virtual box if you will.

And that can be a few people, a small team, or large company.

A carbonate like backup service of but a way for collaboration on certain projects.

It is supposed to be very user-friendly software.

People who use google apps should enjoy using the box software.

They have a lot of competitors.

There are a lot of other competitors coming up as well.

Every major mobile platform, google, apple, microsoft have products that are trying to do this.

The problem they encounter is it is one device.

The case that the box will make his we are not silo, we will go across any device.

Job -- box is more consumer play, from the bottom up and tries to get individuals to pay for a subscription.

Box starts with the i.t. guy.

Then ceo has been preparing, aaron levie, for a long time and i think nervously.

Maybe a year ago, he was asking me how i look at ipo prospectus.

He was afraid of filing an ipo i think that will allow a group home was involved.

It strikes me that this is emblematic of the kind of ipos we are seeing.

Companies that are more mature.

How old is he?

29. he might as well be 14. what's the expectation from the money manager is by the time they see the ipo, it will be a witch or business that has a fairly predictable revenue model.

By the time it gets to the roadshow, they will be able to say, 12 months out, this is what our business and will look like.

These are the kind of customers we are signing on to what we need to do to get a bit customers and scale the business.

It will be a habitable so they can value weighted the same way they would public companies.

It is very different when companies were much more nascent.

Some of them turned out to be garbage.

Others turned out to be real companies and went on much -- and went public much younger.

The risk interesting when, the risk it could go to zero.

Now, more of the risk is half you miss the upside?

The high evaluations with billions of dollars and have the eager investors.

Now, you will flex line for some time.

That is not been the case.

There is a the risk that you will not be rewarded for being early.

In the deed.

Maybe this a different era.

Aaron levie, news tech editor.

Facebook is trying to topple illegal gun sales.

We will talk to the group that used to facebook to change facebook.

You can watch us streaming on your phone or tablet or apple tv.

Reading much everywhere.

We will be back.

? i am cory johnson.

An interesting story about facebook.

It said it will crack down on illegal gun sales stop and will delete posts where users are trying to sell guns and send messages to even promote private gun sales.

They will stop it.

They worked with the new york state attorney's office.

Initially, facebook and not want anything to do with it.

The cofounder of moms demand action joins us.

The story of what you did and what is going on with this to change their policy.

It was right after the horrible tragedy at sandy hook that you started your group on facebook.

Yeah, it is ironic.

We started on facebook and i wanted to do something in reaction.

When i started my facebook page, i had no idea i would turn into an accidental activist.

And in 15 months, would have over 100,000 users in every part of the country.

When we found out that facebook was allowing the sell and trade of illegal guns on their platforms and instagram, we knew we needed to act as a moms.

The same site where we share photographs of our families.

We needed to ask them to act and stop this trade on their platform.

Specifically, what did you see going on on facebook?

There are a lot of different kind of advertisements and promotions and group pages.

There is a group that is called guns for self.

People are offering guns for trade or sell.

They are available without a background check.

We knew it was resulting in a crime.

Somebody who was 15 years old was able to buy a gun off of facebook.

As a criminal was.

A fully, these people work hot.

We do not know how many people were not caught.

-- thankfully, these people were caught.

What was facebook's reaction when you started making this thing known?

Like any negotiation, it has ups and downs.

They were not very interested in changing policy at first not a like starbucks and we got them to change their policy six months ago.

They did the right thing.

Moms in america, one in five have a facebook page.

We are a very important demographic for facebook and we are grateful they listened.


The video you put up, look at our history on facebook, you use that for political action.

Tell me about that idea.

Those were emotional videos.

We like our own videos on facebook showing what it has been like at different pitches we had posted and defense.

The reality is there are more serious stories to tell.

Illegal selling of guns.

We use the interest to create our own.

And it was very powerful.

It went viral.

It was a very important way to tell the story of why this is so dangerous to our children and our families and communities.

I love that you used facebook to fix facebook and a wonderful story.

Good on you for doing that.

Shannon watts, thank you for joining us.

A disclaimer, mayor bloomberg is a majority owner of bloomberg.

If the internet as we know it dying?

We will explain that next on "bloomberg west." ? is the very fabric of the internet dying?

Changes underway in mexico with the basic structure and those changes lets companies decide among the winners and losers the biggest names.

An author susan crawford joins us and dave schaeffer.

Susan, let me start with you on how the internet works.

I feel like it was different than even 10 years ago when there were companies.

There are fewer and fewer ways to get online.

For most americans, 80%, their only chance for high-capacity isidore local cable monopoly.

It's as their -- if their local cable monopoly.

They have huge power.

Both for users and for the networks that want to connect to comcast and time warner cable to reach you.

Put together some graphics to explain it.

I want to pull it to gather.

The way the internet has tended to work was when ever you wanted to go to as a user whether aol or yahoo!

Or netflix, you would go online and be able to see the things and you have equal access . you could use whatever you wanted it.

The business does not fit into your home.

There's a dramatic development recently.

Next struck a deal with comcast to get there on the fast lane ahead of the competitors in a leading -- leaving everybody in the dust will stop -- in the dust.

Can you tell me what happened?

The internet is a network of networks.

They are interconnected.

In the case of comcast and netflix, comcast has refused to upgrade not only to our network but every other major provider for the past year and a half.

With that refusal, those connections became clogged and netflix was forced to enter into a more expensive agreement with comcast in order to bypass that congestion.

Yeah, fairly interesting here , i feel like the implications are massive here.

Not only for companies like yours that charge accelerate everybody's it used, where are the implications?

It is a titanic development because it makes the internet like cable tv and some a gatekeeper.

They pick winners or losers.

They make it through their gates.

Like the traffic cones to be bridged.

They are in position to shape traffic and pick who gets to go through at a reasonable price.

A big deal.

I like to think of it if ford owns the freeway and only ford can use the express lane.

Consumers are going to say, i like my porsche but the ford is faster.

But there is no choice.

You have a ford in nobody else when you are sitting in your living room.

Very few providers and the last mile for consumers and they are charging a lot and they do not compete with each other.

This a major problem for the country.

America has the fastest internet connection in the world, right?

And that is not true.

Large parts of asia and europe residential connections are faster.

Today, the service providers charge their customers for connectivity to the internet and have intentionally decided to limit advanced connectivity in order to force large content companies to effectively pay a toll.

That has dramatically reduced the flushing out the of the internet as well as the speed as customers are seeing.

Susan, i was wrong about americans have the fast the internet.

At least time warner and comcast are separate companies?

They are planning to merge and they are confident it will happen.

It will put it the entire set eastern seaboard under their control.

They will be deciding who reaches the customers on what terms and is a terrible deal for the country.

We need to be on a completely different trajectory when it comes to high-speed access.

We are paying six times, seven times as much for second class service.

Quick i wonder -- i wonder from your perspective do see potential for competition?

While we may not have competition through a bulldozer, maybe a dish network.

Is there a potential for other competition?

There is a tremendous amount of competition.

We are the second largest carrier of traffic.

And in the local access networks, they are typically monopolies.

For that reason, they need to be regulated.

What is happening are the cable companies have been allowed to act in a nonregulated manner and they over charge their customers and even more insidious, they actually incentivize their customers to pay upgraded service no -- no ill not to deliver better.

Will have to deliver it -- we'll have to leave it there.

Thank you for watching "bloomberg west." ? .

This text has been automatically generated. It may not be 100% accurate.


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