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tv   Bloomberg West  Bloomberg  January 3, 2014 11:00pm-12:01am EST

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>> live from san francisco, welcome to the late edition of "bloomberg west" and cover the companies reshaping our world. our focus is on innovation. from ultra-hd tv's and wearable gadgets, what will steal the show? we are going to hit the road in vegas. after taking the heat one hacker exposed user data. it takes to twitter to apologize and promising an updated app, but is it enough. >> the myth busters are going gallactic.
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is it possible to swing across a sky cabin like luke skywalker. to the lead, where the tech industry goes to show off their gadgets and what they hope will be groundbreaking technology. the consumer electronic show begins next week in las vegas. more than 150,000 people are expected for the show where roughly 3,300 companies will be showing off their latest products. apple will not be among them. wearables is a major theme. jon erlichman will be there next week and joins us now with a preview from l.a. jon, what are you most excited about? >> you mentioned 150,000-plus people. when c.e.s. got started in 1967 in new york city, the audience was a tenth of that size. you saw the momentum behind
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things like camcorder, v.h.s., cd and every year we asked the same question. i would say that you got a mix of the obvious and the curious. will you see smartphones? absolutely. will you see cool television, 4k tv's? 100%. lots of wearable stuff? you bet. i hope to drape myself in wearables, see what works and what doesn't work. and connected devices and connected cars. we have been talking about this idea of audi taking advantage of what android has become. at the end of the day is, which one of those categories can be the one we can talk about in
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terms of taking over the conversation, is it wearables, is it a likely thing and where wearables are going. >> jon, this is a show that has been going on for decades and people are questioning whether it is still relevant. companies can show off their gadgets any time. why bother going to c.e.s. why does sony pull out all the stops for a show like that? >> it's a big stage and everybody is there and you are going to get that attention that sometimes can be difficult. some companies can't grab the world's attention. samsung, they are a big presence. they are getting the message out there and get the word out about their other connected devices. great opportunity for other japanese companies to talk about what they are doing. the microsoft story is an interesting one. last year, we had this story line how microsoft was pulling out from the showroom floor and
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people are saying, is microsoft back in. they have devices fueled by windows and important for mike he crow soft to be there whether they are on the floor or in the back room. there is a lot happening there. lots of opportunities to sign deals and get them on the same page. even though apple is not there, there is a whole gathering area for people who are making stuff tied to apple. this is a great place for people to gather and talk about where their industry is going. >> i want to bring into this conversation, the founder and one of the skeptics. you are not too excited about this show, why not? >> not just this year, pretty much every year. it's a show that makes a lot of noise and doesn't produce anything sustainable. you have to leave it to apple to make a category, create a market and then other people can
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follow. >> it's all up to apple and everybody follows them? >> pretty much. you look at the iphone and then the ipad and people are waiting for them to do the smarttv. samsung tried to do the samsung watch. i don't know. and i think the other thing i'm skeptical about as an end user, it's not about tech, it's about being able to wear it. look at the watch you are wearing. that's the watch pebble has to replace. i'm sorry, it is no where close to being that device. >> i tried that pebble, they look nice. samsung has come further with the galaxy and not selling well. i can barely remember the products that they had last year. there were some smart things. does it better? >> i think the stuff, the advertisers step back and say what is it about?
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it's about being connected. >> there is a fork, by the way. >> which i don't understand. a lot of the things we have in our life are smart and going to get connected. c.e.s. or no c.e.s., from my stand point, you know, whatever. >> are you saying none of it matters because it's not apple? >> i'm not saying none of it matters. the big trend is how devices are going to be connected. whether they launch it at c.e.s. or some other place doesn't matter. c.e.s. has much less value. >> how about wearables in general? they are supposed to be the big theme. you mentioned the pebble. is there anything that i'm going to want to wear every single day? >> i haven't seen anything that i would want. i have been getting press releases and stuff.
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there was a blue tooth barbecue grill, which made sense. not really. but it was cool. wearables, they aren't thinking like the way they are supposed to think about it. wearables are like jewelry. you are showing off stuff on your body. and if it doesn't look good, it's just not good enough. doesn't matter how much cool technology -- you know google glass, like jesus christ. you look like a droid. >> i don't want to wear it if it doesn't look good. let's talk a little bit more about cars. we have heard a lot about connecting cars. ford is going to show off a solar-powered car. this is a car that ford has said
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isn't going to be on the road soon, if ever. so why are they showing it off? >> they have to. again, it's what is c.e.s. c.e.s. is the great opportunity to present what you are trying to do and if you are tired of hearing about driverless cars, as an auto maker, you will talk about the kind of technology. at c.e.s., incredible to look at the massive secretaries devoted to the automobile industry. just seas and seas of technologies tied to cars. huge transformation they are focusing on a lot.
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just to his point about companies and apple leading the way, i think the question is, what choice do these companies have? they can't sit around the table waiting for what apple is doing. have the opportunity to get out and show what they are doing. some apple news comes out during c.e.s. week, which was the case last year and draw the attention of showing at c.e.s. >> you are sticking around and we will talk to you. programming reminder, turn in next tuesday and wednesday when we are live in las vegas. the long standing hit show and "myth busters" is taking scenes from "star wars" and putting them to the test. >> i'm emily chang and this is
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"bloomberg west." the disappearing photo app was
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compromised when names and numbers were posted online. snapshot said it will launch a security update and just this afternoon, the c.e.o. tweeted sort of an apology to users saying just going to keep working on it. sorry. feels like we let you down. turning to our special panel, david kirkpatrick from new york and founder of gigaohm. what do you think of this apology-nonapology? >> i think someone needs to sit down with this young man and say you have to play the p.r. game properly. i don't think they are going to suffer as a company very much, but they have a p.r. mess on their hands and much bigger -- they didn't expect it to be that
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messy. i think they need to really rethink what they should do about the p.r. here. >> first of all, they were warned, apparently this group of hackers warned snapshot that there was this vulnerability and published peoples' phone numbers online which is more difficult to change than a password. doesn't this warrant an apology? >> i respect you, but i disagree. i think this company is an immature company and its leaders are intoxicated with its overnight success and made a number of mistakes. in my opinion, if they were offered $3 billion by facebook or $4 billion by google, they are idiots. this is not the kind of technology that is a long-term
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network-effects business with growth opportunities. it is a feature that somebody is going to sokol snap up and if they can be the ones to do that for somebody else, more power to them. this whole history of this company has been fairly light, in my opinion. my daughter, who is 21 told me she quit snapshot as a result of this and more of her friends have. but she expects to rejoin. >> my husband's phone number is online. you want to get in on this? >> i think for us, david and i, we belong to a certain age that we shouldn't be discussing our demographic group and a pmp ps. and we have no idea how a different demographic than us is going to deal with this breach, how they're going to use it and how they feel about it. there were a lot of things that were immature about facebook.
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forget about the fact that there was facebook run by a very young c.e.o. and finally the investors brought in some grown-up help and things got better from there. i think snapshot is having one of their moments. they are kids. they are making mistakes and they are not thinking through what they're saying and there is a lot of, you know thinking and need to take a step back and say how do we address the market. and making some one-liners and getting away with it. bbc is talking about and daily show is talking about. every company goes through some p.r. disaster. i totally feel that, you know, we always underestimate new things. snapshot, we will underestimate. >> you mentioned mark
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zuckerberg. his first apology about privacy from 2006 and it was more contrite than i remembered and he said, we messed this one up and had to do with news feed and mini-feed and we didn't build in the proper privacy controls right away and i'm sorry for it. >> i'm so excited about criticizing the notion. news feed has become the central feature of facebook and he was apologizing for introducing it. there is a huge irony that was his first apology. without newsfeed, no one would use facebook. >> do you think that we are mistakenly talking about another demographic, not knowing what the trends are going to be? you invested in facebook and twitter, in high last conversation with him, he talked about the information and he
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thought that is going to be a major theme. >> i don't think the vision is anywhere near as big as the facebook vision and i don't think that many thousands of dollars will it be a $5 billion business. but i do think -- again, slightly disagree with you -- this is a win for snapshot in many respects because they are on all of our lips because they are being talked about on "the daily show" and bbc. and i think that's unfortunately one of the ways this world works celebrity-centric, scandal- centric media. just being talked about is good and more people will become aware of snapshot and it was
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interesting to me to see 4.3 million phone numbers were revealed and that was the majority of the users. i had the impression that they had more users than that and i think after this, they will. i don't think it's that important of a feature, but i think they will still do well. nonetheless, they should have expected $3 billion, $4 billion for the business. >> zuckerberg said a billion dollars. >> behindsight is 20-20. we don't know.
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if i could look into the future and make a forecast and be right all the time, but i'm not the richest man in the world. it's wrong to assume that this company will have no prospects. >> i'm not saying no prospects but relatively fewer than facebook or google or even twitter. >> 2006, people had no clue. twitter was a joke. i wrote that and a lot of people agreed this is a company that got no future. they are doing $500 million in business. what did i know? absolutely nothing. we can talk about all about the future and that is the situation with snapshot. it has a p.r. disaster. not on business disaster. >> david, you get the last word. >> i really don't think it's a p.r. disaster. i think snapshot will come out of it fairly well. i don't think we are going to be talking about snapshot as a
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major company. but i do think they have a legitimate and probably profitable ultimate business, but no where near on the scale from a vision point of view or even from a founder capability point of view, anything like google or facebook or twitter or any of these other great companies. >> we'll see what hindsight looks like. i knew this was going to be a good conversation. thank you to you both. have a great weekend. >> we'll be back with "bloomberg west" after this quick break.
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>> welcome back. i'm emily chang. at&t is trying to coach t-mobile customers. the competition is heating up. at&t is offering up to $450
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bucks to woo t-mobile customers. the deal comes today. jon erlichman has been tracking this and back with more. t-mobile is making strong moves. $450 back. that is a pretty big deal. >> i love this story in the sense that t-mobile next week has a press event scheduled in las vegas. a lot of people think it's something similar, they are going to go after customers of larger carriers, come on over to us. at&t does the exact same thing and sparked a response from t- mobile, the c.e.o. saying it is a desperate move by at&t. it tells you t-mobile's strategy is getting under the skin of larger carriers and all of a sudden as they fight more, that
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cuts into profitability. kind of thing that plays into the bottom line as well. >> jon ledger has been on this show and quite a colorful character and no doubt next week he will find some way to put on a good show at c.e.s. what do you think of the job he is doing so far? he has gotten attention. >> attention and customers. since they came out with this un-carrier approach. they were bleeding customers before and now they are potential takeover targets. he is a takeover guy. turn around this business as well and doing so in flashy pink t-shirts. >> we will see you next week in vegas. very ky excited about that. thank you. could luke skywalker swing across the chasm. "myth busters" guys are talking about this "star wars'" style.
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>> you are watching "bloomberg west" where we focus on technology and the future of business. a version of gorilla glass that can be molded into 3-2 shapes. corning is making the glass that will keep the same thickness. samsung and apple have been pushing suppliers for more flexible parts. blackberry is suing a start-up that was founded by ryan seacrest. they claim it stole a design for a keyboard. they are making an i-phone case
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and scheduled to ship this month. there will be no local tv blackouts in the nfl playoff games. bengals should sold out their games. in all three cases, corporations joined fans in buying the remaining tickets so the games can be shown on local television. the n.s.a. may be developing the ultimate tool to break encryption codes. they are looking at building a supercomputer that works at high speeds. documents provided to the post by snowden, the n.s.a. leaker showed that the n.s.a. is spending $80 million on this program. i bring in the president of the research company used to protect data. what do you think about this supercomputer.
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break all kinds of encryptions anywhere? >> we don't know it can be built. but if someone managed to build one, it would have huge implications. >> do you think something like this could already exist? >> unlikely. the number of break-throughs to build a quantum computer would be hard to fathom. kind of at the point where -- figured the math by hand and build micro chips to get the scale to go from where we are now to where we need to be. >> without getting too far into the we's, what is it about a quantum computer that can crack encryption? how does the technology work? >> you do many, many encryptions to do the right answer.
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instead of running each input separately, you can run many at once. you can be testing many keys all at the same time with one through the computer. instead of working in binary it is working with a complex wave form. and find answers quicker. >> does anybody else have this kind of technology? >> there are no quantum computers that can break the codes. there are some systems, but they work on a different system but not useful for code-breaking. >> if anyone was doing it, wouldn't it be the n.s.a.? >> it would. n.s.a. and quantum computing >> what do you worry about? >> user error, inside jobs, failure to encrypt things that should be encrypted.
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vulnerabilities, the crisis problems and we can't for the most part as an industry build systems that are career even against the known threats. these aren't the ones. >> companies like yahoo! and microsoft, they are trying to protect their data more securely than it already has been protected, but is there any way for these companies to really do something that is completely fail-safe? something like the n.s.a.? >> it is possible to build systems that are resistant to quantum computers as well. but right now, the challenges, for example, that google is going through and installing encryption for the first time. so getting something that works is the first step and maybe at
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some point in the future there will be additional upgrades. >> someone in the security world, you studied it for such a long time, what do you make of all the revelations what the n.s.a. has been doing and the stuff that snowden has brought to light? >> i'm conflicted about it. there are times there is a government agency doing something technologically successful. on the other hand there is a use of people's information for a power that is not necessarily benefiting the owner of that data and certain lack of respect and certain lack of care for privacy that is troubling. as a society, we have to figure out how we want that line to be drawn. >> what would be a better way of doing business? >> dirty nasty business involves breaking rules, hurting people. i mean it's always been nasty.
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and i think as a democracy, we have to figure out, what do we want there and there is no good answer to that question. >> the question that i think we will be asking all year long. thanks for joining us here. +++
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>> serious financing for time warner cable. >> serious financing for time warner cable. >> i just got off the phone with liberty media c.e.o. and what he told me was a potential purpose of this deal for sirius is to use its incremental positive cash flow and low-target leverage rate to potentially facilitate a deal for time warner cable. this has been something that we have followed for months. liberty is the largest share holder in charter. it will be charter taking over time warner cable. but liberty has said publicly, they want to make sure they are not diluted in any deal for time warner cable. they will have to kick in a few billion dollars and this deal will give them more resources to do that. >> what is the significance of this? how big a deal is this in the scheme of some of the things we have been talking about, potential consolidation in the cable landscape? >> the time warner cable deal would be one of the biggest deals we have seen in years. it would be at least a $62 billion deal at a $135 target price, which is what our sources
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familiar have told us charter is thinking about offering. maybe slightly below $135. that would be the third largest deal offered. 2009, just lower than the verizon deal back in 2009. that would be an enormous deal. this particular deal for sirius means that liberty media is going to be one of the active companies around probably for all of 2014. >> alex, thanks for bringing us that update. you will keep us posted on the developments. well, the "myth busters" have been separating fact from fiction. they kick off their new season by delving into the "star wars" story.
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so great to have you guys on this show. so many fans are excited that you are here today. "star wars," busting out. >> it's popular culture. belly of the beast of nerdom. >> have you seen "star wars"? >> i think once. >> what's wrong with the movie? what is inaccurate? >> we aren't going to spoil our results just yet. biggest thing we tackled, in the movie, "empire strikes back," luke is stranded and han has to get an ice shelter built and he places luke inside and says this will keep you warm.
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we figured out, even ton-tons are fictional. is it the right call? >> storm troopers. is that really possible? could he have done that? >> i got to swing on a cable. >> sounds like a tough job. >> she was great. it isn't quite as easy as one might think. >> shocking. how do you protect yourself? >> we do our homework like everything on the show. we hired professionals to make sure we were properly rigged and had it all set up and actually quite thrilling. >> you guys have footage from "star wars." did you talk to them? >> we needed permission number one from lucas film. and i reached out to them and
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they were very gracious in giving that permission. john, who is one of the creative directors is a friend of mine and i have a large collection of "star wars" costumes. >> it probably helped that you were a fan. does george lucas, what does he think? >> i got word that steven spielberg loved it when we built every myth from "jaws." he will be quite pleased. >> what about other movies like "gravity." it's such a thrilling movie like could that have happened? >> it's our stock and trade to test those things. when you are talking about
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science fiction, planets, and physics and tons-tons. >> what myths to bust? >> the questions were interested in answering. it's a narrative of our own curiosity. and the ones we get the most excited about are the ones we shoot. >> a lot of experimentation go into this? what ultimately ends up on the show? sometimes it doesn't work out and maybe it's not a myth. >> for us, it's all about process and sometimes it involves failure and experimentation. the most fun we had was trying to invent ton-ton guts and luke had to stay warm on the planet. and inventing things like that
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is quite challenging and interesting. all about that process and if we fail, we are good with that. >> if you ask what kind of experiments we do, we do it on camera. everything you see happen it's us figuring out what is going to happen. we come to a result that we didn't expect and changed the narrative so we can tackle the actual result. >> this is a technology-business show and there are a lot of tech people with very big dreams and you heard about the c.e.o. from amazon and delivering packages to your doorstep, is that something that can ever happen? >> absolutely. >> i order 10 things on amazon every day. is that coming via drone? >> it totally could happen. i don't think it's going to happen tomorrow or next year,
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but it something like that is feasible. >> the technology is definitely there. they can do it. it gets down to whether it is practical or not. and as technology advances and mass production, it does become more practical. >> what about the hyper loop? fast transportation between san francisco and l.a. in a half an hour in a coffin-like device. >> the idea of a super-fast transport dovetails with an episode we did recently about making a ping pong ball go past the speed of sound. we are using the ping pong balls. >> and we made them lethal. >> what about space?
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>> i don't know if it's going to happen in his lifetime. >> but someday? >> every generation of humans has pushed its best and brightest. we have been doing that. i don't see any reason we aren't going to do it moving forward. >> whether we end up with hundreds of thousands of millions of people populating mars, the attempt itself is worth it, because look at the invention and products that has been integrated in our life to put us on the moon and other things. it's often not the most important thing being what you're looking for, but sometimes the things that you didn't know you found along the way. >> what's the myth you would love to bust you haven't busted yet? >> if time and money were no obstacle, there are some people who believe we did not land on
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the moon and we call them idiots. we would like to go to the moon and picking up a piece of apollo hardware and demonstrate that man was there. >> bust your own myth. >> in a rocketship that we built. >> jamie and adam of "myth busters." google glass is hitting the road. how wearable technology will help you drive better.
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>> hyundai's the latest auto
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maker to integrate google glass. what does this mean for the future of driving. i bring in our bloomberg reporter. what exactly does this mean? how is it going to work? >> this is definitely not to be used while you are driving the vehicle. hyundai was specific about that. basically, if you have the google glass device or wearable technology that they haven't specified, before you get into your vehicle, plan out your route. if you live in a cold part of the country, you can pre-start the car and warm it up, diagnostic information, get the gas for the trip you want to do, this would be the google glass app before you drive. they keep describing this as a
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pre-drive application because this is a problem with wearing google glass while you drive. >> you cover the car industry and we are talking about c.e.s., connected cars, on the scale on the cool things, how does this rate in terms of what else is happening to make cars smart? >> sure. this is an interesting one. the big theme recently has been self-driving technology. those are coming. this announcement from hyundai was interesting because it is very specific, they talked about doing similar things, but as far as we can tell, this is the first specific vehicle application developed for google glass that has a release date. coming with the 2015 genesis sedan. so it is very specific. it isn't just wouldn't it be cool if we did this, but
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something specific we can do and coming to market and most likely others will follow. this is a new type of technology. google glass is very new. not legal to wear these devices. there is a problem with that. this is very cool in terms of new technology, but we just don't know yet how big it could get potentially. >> all right. alan, thanks so much. well, from amazon to google, tech companies are paying a lot of attention to robots. we look back at the biggest robots of 2013. >> from soccer to the classroom, robots gained ground in 2013. india created a dancing robot. put critically-ill children in the classroom and others
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designed to help the elderly. iran hosted the soccer competition while french and japanese had a robot you can control with your mind and there is the first talking robot we sent to space. motion sensors put robots in the boxing ring and a secretary was shown off in tokyo and israel showed off military robots. 2014 will be just as mind-blowing. these australians have their say, fluffy robots helping people with memory loss. >> also this year, maybe we'll get a hint about what google is doing with those companies that it has purchased. thank you so much for joining us on this edition of "bloomberg west." have a wonderful weekend. don't miss next weekend. we will be at c.e.s.
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>> this week on "political capital" -- white house adviser david plouffe preview 2014. margaret carlson debates the upcoming year. we begin the program with former senator john sununu and david plouffe. the end of the year, barack obama and congress were at low points. we begin with health care.


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