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tv   Best of Bloomberg Technology  Bloomberg  June 24, 2018 6:00am-7:00am EDT

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♪ emily: i'm emily chang. this is the best of bloomberg technology. we bring you all our top interviews from this week in tech. coming up, the battle with the u.s. border in mexico, a delicate balance between immigration reform and big-money government contracts ahead. plus, the u.s. senate voted overwhelmingly to reinstate penalties for zte. defining trump, and potentially upending the deal the president struck with the company. but the president is not backing down. we here from senator mike
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rounds. a shakeup at intel, the ceo is out. the chipmaker reveals he had a consensual relationship with an employee, a violation of company policy. first, to our top story. u.s. lawmakers push back against president trump's attempt to save a chinese telecom maker. senators passed a bill to restore penalties, cutting off its access to the chips and components it needs to build smartphones and network equipment. senator chris van hollen spoke to bloomberg to explain why lawmakers moved to pass what could be a death sentence for zte. >> zte poses a national security threat to the united states through their telecommunications network. on top of that, they violated u.s. sanctions multiple times, flagrantly. they tried to cover it up, so there is no reason to let them off the hook. emily: but president trump is not backing down, here is wilbur ross, speaking on bloomberg
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television thursday, saying there might be a compromise, but the government will take action if violations continue. >> we have taken over $2 billion in fines. for the first time ever, we have the ability to implant into a company that has violated sanctions, our code of conduct, our code of export control. and we have unfettered access to the company in order to monitor it. if there are further violations, we will shut them down as we did before. we have the power to do that. emily: bloomberg tech correspondent joined us to explain. >> we are seeing them get punished severely by investors. the longer they are in this limbo, the more damaging it is for companies. they have already lost billions, their operations have been halted.
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they do not have a clear path ahead and still rely on united states chipmakers for key parts in their telecom equipment, but at the end of the day, the process is providing more impetus for xi jingping to achieve his china goal, which is actually at the center of concerns for u.s. lawmakers. they do not want china to be technologically in dependent, to steal ip from the united states. but the tsonga is telling china they need to figure out how to create this them ethically in their country, so that they are not beholden to the u.s. parts. emily: thank you so much for that update. i do want to bring in senator mike rounds of south dakota. he currently sits on the senate arms services committee, and was previously the governor of south dakota. welcome to bloomberg technology. senator rounds: thank you. emily: do you think president trump has started a trade war, or would you call it a trade
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dispute as senator navarro puts it? senator rounds: well, right now, it is a dispute. but nonetheless, it is impacting our markets. soybean prices are down, and that's a lot of money in south dakota. china imports or takes up about 25% of the entire soybean market in the united states, 60% of exports. so it makes a big impact on one of our agricultural states. south dakota being one of them. emily: this certainly sounds like a trade war to me. we're talking about another billion dollars worth of tariffs facing chinese goods. senator rounds: fact is, the president does not think we're getting a good trade. there are a lot of people in the united states who feel the same way.
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we will allow the administration time to put together negotiations, but time is running short, particularly in agriculture where we are looking at production maturing. we are looking at soybean and corn coming in. if we do not have stability at some point in the near future in this market, it will start to impact our economy, and that is something we do not want. most certainly in the agricultural states, there is support for the president, but they also want to know what is the endgame in this? how can we sustain this impact? and how will it impact the number of different states? emily: bloomberg has published a story that these tit-for-tat's, the war, disputes, what everyone you want to call it. it could hurt american
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companies. apple, walmart, gm, tesla, starbucks among the most vulnerable. does that concern you? senator rounds: it certainly does. as we have said for several months, when you go after china, they are the big dog, you have to do it from a position of strength. i think the president understands that. but if you take a look, right now, we have a dispute with canada, with mexico. we did not get into the tpp, which had 11 other countries representing half a billion new consumers. and in each case, the white house felt very strongly we -- they should do individual agreements with each country. we don't have a single one done, so let's get one done, and go after china in a position of strength. but what we are asking is what is the end game? what is the plan? in the meantime, let's continue to grow the economy, and you cannot do that without some stability within the trade markets. emily: your senate colleagues have voted to restore these penalties on zte. do you think the president's deal lets them off the hook? senator rounds: it wasn't so much letting them off the hook that concerned me and my colleagues. we are concerned with what they represent as a threat to our national defense, and by that,
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kaspersky had relationships with the russian government and we prohibited our government from buying and purchasing kaspersky equipment. in this case, my concern is not so much -- at least my concern is not so much the damage that zte has done. the president addressed it with a billion dollar fine and wanted the board of directors removed. he wanted an oversight board. i do not have an objection with that, but i do have a concern that we have to make sure their equipment, at this stage, is not being utilized within critical infrastructure. emily: doesn't it seem like these issues are getting a little bit muddied? whether zte is a separate case or being used as a chip in this broader trade war/dispute? >> in some cases, it is part of the discussion with regard to trade disputes. it is also part of the issue that the president would like to be able to use in negotiations
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with china on other issues, including their relationship with north korea. i do not want to tie his hands when he makes a deal with the leaders in china, unless it impacts our national security. that is the one thing we have real concerns with. are we allowing zte to still sell products to infrastructure critical areas that impact our national defense? my message is, look, we have passed a bill and now the president can tell us what he is willing to negotiate with us. the house has a bill with similar types of restrictions. there are simple modifications that could be done to the senate bill if we get an agreement with the white house, in terms of how we can agree to move forward, but zte can simply not be allowed to sell to the federal government, and particularly the areas critical to our national defense. the infrastructure areas where
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telecommunications could be impacted by this organization, which has direct ties to the chinese government. emily: thanks to senator mike rounds from south dakota. google is pushing deeper into online commerce, investing millions in cash in china's the company joined retail solutions in southeast asia, u.s. and europe. coming up, the border wall, nearly 2000 miles long, and silicon valley is trying to cash in. how the politics of the wall borders big tech immigration politics. if you like bloomberg news, listen on our radio app. listen on the bloomberg radio app, and on sirius xm. this is bloomberg. ♪
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♪ emily: a new ceo has been named for the health care business. the company will provide health care to berkshire, amazon, and jpmorgan's one million u.s. employees. the goal is to be free from profit-making incentives and constraints. the battle over the u.s. border with mexico is not just a political fight over the thousands of miles were people seek to enter. it is a conflict raging in silicon valley, which seeks to balance immigration reform with big money government contracts. take microsoft for example. they scrubbed an online reference to their work with ice. the post written back in january touted microsoft's cloud contract with ice and the air force, but recently, it went missing, as the battle over separating families at the border was all over the news cycle. after bloomberg asked microsoft about the omission, it is back online and this comes as silicon valley's relationship with government agencies are coming
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under increasing scrutiny. bloomberg's reporters have written extensively on the tech sector's long history with the u.s. border. >> microsoft had this blog post in january where they touted this contract with ice back in january and how it had this great potential future to use ai tools and facial recognition. it was just out there since january, and all of a sudden, it disappeared. after a lot of media scrutiny, it was quickly put back online and they have had a lot of pushback from their own employees. saying they don't want any contracts with ice. microsoft has been saying their work with ice has been legacy systems, spreadsheets, the boring stuff of a big bureaucracy. but now they have some internal employees saying we do not want any contracts with them at all. it puts them in a tough position, because they have been saying strongly this policy is unacceptable. emily: this is coming from a
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letter from microsoft employees obtained by the new york times. we request that microsoft cancel its contract with ice. and other clients who directly enable ice as the people who build the technology that microsoft profits from, we refuse to be complicit. we are a growing movement and recognize the great responsibility that those creating powerful technology have to make sure what they build is used for good and not for harm. no sign of any of these companies are planning to protest their government contract, right? karen: no, or even anyone say, we will cancel this contract or anyone say we will let this one lapse. emily: so what do you make of the response of tech companies? so many tech heavyweights, from mark zuckerberg, to elon musk, to the ceo of uber, coming out and saying they are against this, but walking that fine line between politics and business.
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karen: some tech companies, it is easier for them to take a political position because they do not have as much business directly with the government. like the cofounder of airbnb was one of the first to come out and say this, and they are not ingrained in tech operations as some of these other companies. but they have led this movement of people coming in. but you have not seen everyone, for example, palantir has not said anything, which is one of the largest contract holders of ice. we have not seen anything official out of amazon. at least that i have seen. it is a fine line when they do business with the federal government and are looking for comprehensive immigration reform and the type of policies they need to get high skilled workers. emily: you have written an incredibly compelling piece about the history of technology at the border. hundreds of millions of dollars
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spent on technology. projects started and stopped. how is the u.s. using tech at the border right now? what is working and what is not? karen: there are many parts to the border. there are the official ports of entry and there are all sorts of surveillance technology being used. x-ray cameras, databases, biometrics, things like that. and then there is the huge expanse of the border between the u.s. and mexico, where it is just terrain. a lot of it does not have sensing, and that is where the government has tried over decades to use surveillance technology to bring the image of border crossings into local patrol stations so they can respond. the thing that struck me and my colleague, who did a lot of reporting on this together, was that decades of struggling to make technology work. the border is immense, with an extremely harsh environment. there are huge wins, extreme heat, insects eat through
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sensors. this is different than deploying a system in the middle of a city. it is way out there and makes technology a lot harder. although, there are attempts to change that. technology and sensors have become less expensive. i think we will see change over time around this. emily: that was bloomberg's karen weiss. coming up, the ceo of intel resigns at the company discovers -- after the company discovers he had a consensual relationship with an employee. fast forward as the cfo takes the reins in the interim. bloomberg tech is livestreaming on's twitter, and be sure to follow our global breaking news network on tictoc on twitter. this is bloomberg. ♪ emily: tesla is suing a former
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♪ emily: tesla is suing a former employee accused of stealing
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company secret. tesla accused a former technician of launching a sabotage campaign, after being denied a promotion. he allegedly wrote a computer program to steal proprietary information and send it to three unidentified entities. tesla is asking a judge to stop him, and anybody working him him -- working with them from using company secrets. they are also seeking unspecified compensation and punitive damages. a surprise shakeup at the top of the world's largest maker of semiconductors. intel has moved the ceo after learning he had a consensual relationship with an employee, a violation of company policy. cfo bob swan has been named interim ceo. the former ceo moved up over three decades and led the company as ceo. he left the company through an era of intense consolidation, and leaves much work unfinished. he was in the midst of trying to remake intel into a more general provider of chips. targeting industrial systems and self driving cars. we spoke with a senior analyst
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and a bloomberg tech reporter after the news broke. >> yeah, this is obviously shocking. this happened all of a sudden, and we are still looking into exactly what happened, who it was, the type of relationship. this is an ongoing process. the company is just trying to move on, but i don't think they will be allowed to let that happen. clearly, we are in an environment, as you know and wrote about yourself, where this kind of behavior is no longer something that just gets swept under the table. and this won't be. emily: and he was actually one of the executives who was out there talking about equal rights, and advocate of the me too movement. >> exactly. if you just look at his twitter account, which is still open, you can see all of these statements he made. he tied executive pay in intel to a greater proportion of minorities, especially
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women being represented in that workplace, in an industry with not many women at all. he was out there, one of the public faces of doing something about this. and then this happens. emily: they also significantly increase referral bonuses for diverse candidates as part of the diversity push. i want you to take a look at this chart, which shows intel's growth under him. for me, your team has had the opportunity to meet with brian several times. how did this strike you? >> disappointing, we met with him a few weeks ago. i have always had a tremendous amount of respect for brian. he has always been very
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straightforward and candid in response to our questions, which i can tell you is a rarity. i thought he did a good job under his tenure. the company grew revenues and earnings by share by more than almost 100%. emily: now, intel has always, always, always promoted from within. could they break tradition here? and go for an outsider? >> they are in an interesting situation here. they have not really -- clearly, they have had a plan all the time, where they encourage executives to get experience and then they will see who sorts themselves out. whoever comes to the front of the pack, we will make them ceo and they will have the succession that way. krzanich has also been fairly dynamic of bringing in people from the outside and one of the people who would be one of the natural successors or the people who would step in this kind of situation is stacy smith. the rene james' are not there. they are gone, he got rid of them or they left because they did not want to stay, so that does leave a vacuum in terms of that continuity. so, yes, intel is going to have to widen its viewpoint in terms
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of where it goes next. emily: the interim ceo, bob swan was on bloomberg television a couple of weeks ago, talking about accomplishments. take a listen. >> over the course of the last couple of years, we have dramatically expanded our served market. where we used to focus primarily on cpu's, we now focus on demand for data and where silicon can be a differentiator. our product portfolio today includes cpus and fpgas and artificial intelligence for the data center, or pcs, or autonomous vehicles. so we have dramatically expanded the market that we serve. emily: who are the most likely contenders, and should it be an insider or an outsider? >> i think if they go the inside route, i think the top candidate is probably effectively their chief engineering officer, but i also think there are outside
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candidates that intel will seriously consider. you highlighted sanjay, former qualcomm executive, somebody who ran a global foundries, a manufacturing powerhouse. somebody who is respected by some of the largest shareholders in the sector. another one from broadcom has done a phenomenal job, and there is probably not much left to do at broadcom, so that would be a big change in culture and break for intel. those are the two that come to mind. emily: that would be a huge break in culture. i want to go back to renee james, a woman who pitched with krzanich to become president, and he became ceo, and she left so fast. could these new revelations shed any light on why she left or could she be a candidate? >> she basically left the company and now has set up her own company, which is
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effectively competing with intel, trying to get into the server market, intel's home turf. that is not the actions of someone that feels a lot of loyalty and affection, at least for the current leadership of intel. would she be on the list? we will have to see. if they are open about diversity, open about looking at the candidates who might make the most sense, she would certainly be someone they should put on their list. emily: what would you like to see? given the challenges intel has ahead, the consolidation of the industry, the competition, the design flaw they are still trying to get through? >> i thought they brought in a world class cfo in bob swan, and i would like to see them go externally. there is a tremendous opportunity as an investor in
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intel. the company obviously has good momentum today, which i think will continue. they are struggling, though, struggling with manufacturing execution. m&a has looked at times wasteful. if you, in terms of who they brought, if you bring in the right executive with a good track record, i think there is a tremendous opportunity to rerate. the current price could actually be a very attractive entry points, so we will see who that person is. it is pure speculation at this point, but i do see this change as an opportunity in intel shares. emily: still ahead, here comes the taxman. this week, the u.s. supreme court freed state and local governments to start collecting billions of dollars in sales taxes from internet retailers. the repercussions for the industry are ahead. later this hour, changes at google. will google make changes to increase diversity and close the alleged pay gap? we hear from an employee
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speaking up in pushing for reform. this is bloomberg. ♪
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♪ emily: welcome back to "the best of bloomberg technology." i am emily chang. in a landmark decision, the u.s. supreme court ruled state and local governments can start collecting billions of dollars of sales tax from online retailers that do not charge tax to their customers. the supreme court overturned in the 1992 ruling that made much of the internet a tax-free zone. it had shielded retailers from collecting taxes if they did not have a physical presence in the state. it puts pressure on the likes of amazon, etsy, and internet retailers as a whole. we look at the repercussions for the industry. >> the winners are probably brick and mortar for the next year. we can go back and look at what happened with amazon.
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rewind 10 years ago, only about 10% of the items they collected taxes on. now, that is about 70%. during that time, date -- they actually accelerated the growth from midteens to mid 20%. the reason it is a win, at least near-term for traditional brick-and-mortar, is there will be a period -- probably a year -- where people will maybe stop and think twice because they don't get that 5% discount on some items. and so, i think over time, people will forget about that and buy what they want and where they want. but it is a small win for traditional brick-and-mortar. emily: we spoke with a hedge fund with a big position within wayfair, and he said it is not that material because most internet retailers are already collecting taxes. consumer behavior will not change. this isn't going to drive consumers back to traditional stores. they still pay taxes there as well. would you agree? >> i'm not so sure about that.
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i actually paying it will make a big difference for a company like wayfair and newegg because they are not used to collecting these taxes. we are talking about 12,000 different tax jurisdictions that they will have to comply with. amazon is already doing that, so they have an advantage over companies like wayfair. certainly brick-and-mortar companies will benefit, but i think amazon does, as well. emily: let's talk about what this really will mean for consumers. consumers love low prices, but in this day and age, they really love convenience. >> you are exactly right. we surveyed this over the years. i was surprised when i originally found this out.
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not as surprised today, but cost-price is the third reason why people shop online. usually, it is selection and then delivery, so those, you could wrap them up more broadly as convenient. but it is the third most important piece, so i think that is the why after a year, he will move on and come back to online, despite higher taxes, but yeah, to put this weekly into perspective, there is about 350 million unique items on amazon in the u.s. it is obviously difficult to drive to the store and get that kind of selection. that is paramount in consumer decisions. emily: ebay's statement in today's ruling is limited to large online retailers and confirms that small businesses argue differently by the court. -- are clearly viewed differently by the court.
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now it's time for congress to provide clear tax rules with strong business exemption. talk about what this decision does not address and what will be left up to congress. >> congress has a lot to address. one is back taxes, some states want to collect back taxes for years that have not been collected. south dakota, not part of their law that was an issue, but also the de minimus rule. congress has proposed a couple of different laws that have not been approved. they set a high level, something like 10,000. for small businesses, this rule essentially states that states contacts them without any sort themates can sue without any sort of minimum. you so one thing in one state -- north dakota for example -- and you are taxed. emily: how are we expecting
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congress to respond? >> before i answer that, i just want to mention, there is a little wrinkle in this for amazon. they have a service right now that they charge third parties for managing their taxes, typically 2.5% to 3% for all of the headache we talked about. if there is a universal tax that congress passes, the supply-side tax code in retail -- the simplified tax code in retail, for example, 5% across-the-board, that may have a negative impact on business. but to answer your question, we do not really know what the terms of this are and congress needs to still decide. i do not know what the timing of that is and i would say that probability that there is some sort of holistic view on online taxes is extremely high by year-end. i would put it above 90% chance that we get something. emily: you have a little bit more on the timeline. how does this play out? >> traditionally, it takes congress about 5-8 years to address supreme court decisions. it would be great if they could address something by the end of the year. we have not seen congress
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getting their act together on things that are even this evidence, and so it is pretty hard to say. i would like to see something by the end of the year, but it is difficult to say if they will do something. although, we do have a couple of bills that are already there, so they could just reintroduce one of the bills that are just pending. emily: coming up, blockchain in ducis have been boasting all the solutions and applications. and now multiple corporations are paring up to use it in the gaming industry. details on that next. plus, push-ups, coaching sessions, a chef providing you the highest quality fuel for your competition. no, it is not the life of a football player, the regime of the modern sports star, the videogamer. that is next. this is bloomberg. ♪
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♪ emily: goldman sachs ceo lloyd blankfein spoke with our editor
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in chief at the economic club at new york on tuesday and touched on cryptocurrency, reiterating that goldman sachs does not own bitcoin. he said he does not believe a fluctuating digital currency to be a store of value. >> it is not a systemic issue at this point. people are passionate for it, passionate against it. i remember when it came out first with cell phones. i remember thinking, who the hell is going to lug this thing around? i thought, there are 10 phone booths on every corner. this is a fad, no one is going to carry a cell phone. i passed on that whole thing. turns out to have worked. [laughter] not for me, i don't do it. i don't own bitcoin. goldman sachs, as far as i know, -- unless nobody told me -- has no bitcoin. if it does work out, i can give you the historical path why that could happen. emily: while the price of
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bitcoin has taken a tumble, there's still a lot of interest, and global spending is expected to reach $2.1 billion, more than doubled the $945 million spent in 2017. that is according to idc. bloomberg's caroline hyde spoke with the global innovation blockchain leader, and the company just announced a partnership. royalties. for >> the problem we are trying to solve is the incredible complexity of business contracts between microsoft, xbox gaming platform and all the videogame publishers out there. there are several thousand publishers and games. every single one of them has unique contracts and rules for the different countries. that is a hugely complex intellectual property problem, that lends itself to being deployed on a blockchain. caroline: how can this be expanded? is it easy to apply to other areas of royalties and where else can it be easily be
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applied? >> absolutely. rights and royalties for video games are similar to movies and entertainment, music, books, patents. working with microsoft, we plan to put out this solution across all ranges of intellectual property. and also, to open it up beyond video games, and microsoft, and their partners into the media to payment business. caroline: why get involved in this? what is the value added for microsoft? i'm sure they have got plenty of blockchain expertise in the company. >> they do, and microsoft has been an incredible technical partner. what has been amazing is not only do we have deep process knowledge around it, but we have been equal partners of microsoft in the technology development. so developers have been putting together the process around smart contracts, scaling up blockchain. from a transactional perspective, this will be the industrial biggest blockchain in the world. when fully deployed, it will be 2 million transactions a day.
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our engineers worked alongside microsoft engineers to make sure we could build a solution which would scale even larger than ethereum and bitcoin combined. caroline: talk about the scaling challenge, because it is what has been holding back and frustrated ethereum and bitcoin with why it can't be used for the payment solution. why have you been able to scale to get so many transactions when it is an industrial solution? >> there are some advantages when working with the microsoft environment. in azure, we chose a platform called quorum. it allows us to scale, and we made some choices in the design architecture that will allow us to speed up the process. the most important thing is if you look at platform like ethereum and bitcoin and others, they have plans for scaling, but what is more challenging is figuring out the business process application and business value creation. that was the big driver for microsoft.
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we are able to take out two thirds of their cost of managing a rights and royalties system. and we are able to drop the time required to process transactions and tell partners how much they have coming. we dropped it by more than 99%. this is the biggest cycle time compression we have had in my career. emily: are you looking for a job? one that lets you gun down the competition, fight off hordes of alien invaders, be part of a team of top athletes? and one that pays up to $4000 a month with five digit signing bonuses? maybe de-sports is for you. professional gaming is now a billion-dollar industry, giving a new wave of teens and twentysomethings a shot at celebrity. >> just imagine living in this $15 million home. you are paid a steady salary, supported by a team of staff,
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whose sole purpose is to get you to play at your best. >> fellas, let's go. >> if you do not perform, you are cut from the team. >> here we go. round three. round three. keep it going. no breaks. >> if you think this sounds like the life of a pro athlete, you would be right. kind of. it is the life of the sports player of the future, the by the lucky few today. >> my name is michael, i'm a professional gamer. for someone who is uneducated in the e-sports scene and doesn't understand how it works, the way i would describe it is it is kind of similar to a professional athlete. it is a lots of preparation, hard work, and team effort. >> ghost gaining plays players like mike to play in videogame battles.
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yes, that is a real job now. more people watch video games than netflix, hulu, espn, and hbo put together. e-sports is already a billion dollar industry. that is how ghost can afford to shower players with all kinds of perks, like this team house, a 10 bed, 16 bath mansion overlooking hollywood and houses 10 players at a time. all in their late teens and early 20's. >> when most people look at the house we're living in, it is a bunch of teenagers and it is a lot of us, so you would think it is rowdy but we are professional de-sports players. >> here is the day of a professional gamer. ♪
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>> i wake up 9:00, 9:30. breakfast. 11:00 a.m., we have workouts. that lasts for an hour to 1.5 hours. after lunch, we play from 1:30 to 7:30. that's just a long grind of playing against other talented teams. we play from lunch to dinner. i will put this on twitter. >> how are you doing? >> it looks amazing. >> mike did not want to discuss his contact, but when he joined ghost, it was reported he and his teammates shared a $50,000 signing bonus and what each offered a $4000 a month salary. on top of that, mike earns his own money on the side.
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play and hesee him streams on the popular site twitch, and sells his own line of apparel. but like professional sports, gaming is not a lifelong career, and there is a ton of turnover. three months after i met mike, ghost dropped him from the team and he is now back home in new jersey. >> this sounds tragic and could nearly end a player's career, but this is a very common thing in the scene. players get relieved and switched around all the time. my advice to young gamers who want to play professionally, you got to stay patient, dedicated, and understand it will take sacrifice. there's always another person out there trying to take that spot. but i don't have any plans to give up the game career. i'm going to bounce back from this and make my mom and dad proud. emily: i want to bring in "bloomberg tech's" aki ito.
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down in the hollywood hills, shooting that story. do all-pro gamers live like this? >> no, they certainly do not. this is the best of the best. but it is true they are earning bigger and bigger salaries, signing bonuses, all kinds of perks. but maybe not glamorous. emily: i could get used to that, but why they need a professional chef and trainer? they're sitting on the couch. >> that's the thing, sitting on the couch playing video games all day is incredibly unhealthy so you do need to correct some bad habits and get them on low-carb diets. emily: the characters we saw, what are they up to now? >> mike, who was featured, he just signed on with a new team. we heard him in the video say he will bounce back, and he did. emily: coming up, we will speak to a google employee who speaks out about the lack of diversity, pay equity, and more. this is bloomberg. ♪
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♪ emily: instagram has announced it has reached a billion active users ever for the first time. in comparison, facebook has around 2 billion. the social platform will also start a new chapter of mobile video for people to be able to watch longform vertical videos, which can be up to an hour long. earlier this month, alphabet's annual meeting was turned on its head when an employee took the stage to criticize her boss's pay. she proposed base time pay raises to diversity and inclusion. the proposal was voted down, but it reflects a sentiment that they are not doing enough. liz is a long-time google employee, back to partition to create better policies and procedures. she joined us, along with our reporter. >> i am frequently disappointed
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by the fact that not much has improved. i think there is a lot more that alphabet's executives could do to improve diversity and inclusion. emily: what do you think the problems are? the vice president of chief diversity inclusion officer said when the report was released, that they care deeply about representation and creating an inclusive culture for everyone, and while we are moving in the right direction, we are determined to accelerate progress. google executives are often saying all the right things. >> it is true that they are saying the right things, however, the problem is they are not doing the hard changes that need to happen within the company that would materially affect making changes to the way they conduct their business. emily: so you helped create a petition with pushing for better work pace -- workplace policies and ending things like harassment. you worked at google for a long
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time, and we don't often hear from employees while they are currently at a company. why are you speaking up about this? >> we tried to fix the problems internally, but we reached a point where we realized we could not solve this problem entirely on their own. first of all, this is a systematic problem that affects not just google but all tech companies. it secondly, we needed more leverage to get this problem of harassment and discrimination solved. emily: mark, what do you make of the fact that google employees are increasingly speaking out when we never heard from them before? >> it is something happening across the industry. just yesterday we saw microsoft employees, over 100 employees sign a petition to the ceo about their work with ice. it is spreading a little bit. google has, for a long time, had a lot of avenues where people can air their grievances.
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you they have a culture of having open debate and discussion. yet, there have been issues where management has refused to move. now, this past year there have been significant changes. the military contract with the pentagon that google had, that is no longer being renewed in large part because of an employee protest movement. emily: liz, you have been active on some of these issues. tell us what you are doing and what you are hearing from your colleagues about this arrangement that google has with the u.s. government. >> i'm constrained in what i can talk about in regards to information my company might consider proprietary or sensitive, but what i am talking about is things that affect employees in their workplaces. it is true that employees do have a robust culture of communicating and expressing dissent within the company. this has led to positive results for google and the world at large. however, i cannot speak specifically about certain
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projects that google may or may not have engaged in, because i am concerned about retaliation from my company. you emily: what can you tell us, then, about your own experience at google and the experiences of your colleagues you have witnessed. it is not just about hiring, it is about retention and progression. how have you felt about your own journey at google and you feel like management has supportive of advancing your career? >> i think that i have been very lucky that i have a supportive management chain. i know that other people have been significantly less lucky. they have had experiences with hostile managers who refuse to advance their promotions and career prospects. i know of people who have been assigned the wrong level upon
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higher, and had take two or three years to be assigned to what their similar peers have been assigned. therefore, it is a situation where a lot of people, myself included, would have many micro-aggressions. right? like, situations where people talk over you in meetings or steal your ideas, but i think it goes beyond that. there are systematic problems about how the company assesses performance, assigns levels to people. i think it really holds back minorities as far as how equitably they are treated with the company and what their career prospects are. emily: google does have a fairly robust peer-reviewed system, which employees have told me can be easy to game if you have a lot of friends. if you don't, it can be more difficult. >> i think we have heard that from a lot of employees. google's management is in a difficult situation because at the same time, they are facing claims from a fired engineer claiming the company has been discriminating against white males. i think the idea is that google
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feels they are between a rock and a hard place on these issues. the company has been a trail blazer around silicon valley. everything from the way they give out free food, which is something a lot of startups look at google for to set up the path on hr, company culture, hiring. and it seems like this issue that the employees are pushing management to be a leader on this is well. emily: thanks to liz, engineer at google and bloomberg tech's mark bergen. that does it for this edition of "best of bloomberg technology." the next week, we hone in on a potential google age for chinese capital. we bring you the top names in chinese vc throughout the week. tune in each day at 5:00 p.m. in new york, 2:00 p.m. san francisco. and remember, we're live
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streaming on twitter. and be sure to follow our global breaking news network on tictoc on twitter. this is bloomberg. ♪
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>> welcome to bloomberg businessweek. kelly at bloomberg headquarters. a big show this week. we start in london where we explore that city's future as a financial hub. backdrop of brexit. we go to south carolina where we talk to the although ceo about the new plant there. what it means for that state's economy and for volvo's chinese owner. we start with the big


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