tv Bloomberg West Bloomberg October 8, 2014 1:00pm-2:01pm EDT
from pier three and the vanity fair new establishment summit in san francisco, welcome to "bloomberg west." i am emily chang here with stephanie ruhle, who is with me for the next two days covering the biggest influencers in media and technology. going to be an extraordinary few days. they are known for being the pacemakers -- those that understand what is happening before it does. we are not talking about industry insiders who simply
know business. it is who the true insiders are. what you think about who the icons were, it was was -- once bankers. things have changed. elon musk, number one on the list is the guy to be seen or be seen with. onwe have a great lineup "bloomberg west. the cofounder of paypal will be joining us. i want to get to editor-at-large cory johnson with the top headlines. >> a lot of news today. ebola patient thomas eric duncan has died from the virus at a dallas area hospital. he visited liberia and contracted the disease there. his girlfriend and her family are being quarantined, but so far have not shown symptoms of the ebola virus. protestsf the massive in hong kong are threatening to pull out of talks as the government ignores demand for
democracy. students are also bringing back giant crowds of protesters that paralyzed central hong kong. talks are scheduled for thursday. thus far, the different sides cannot agree on where to meet. nfl owners have approved the sale of the buffalo bills to ula.y peg he also owns the buffalo sabres any says he wants to keep the bills -- and he says he wants to keep the bills in buffalo. $18 million to settle what they say are bogus charges. consumers affected can apply for refunds. t-mobile overd some other allegations in july. apple sent out invitations to what they call the next major product event on october 16 in cupertino, california, where
they are expected to unveil a new full-sized ipad and then i've had many. they are expected to come -- and ipod mini. they're expected to come in gold. very exciting. >> thank you. i want to get to the lead story of the day. amazon warehouse workers getting their day in the supreme court. amazon and 10 companies that they work with facing one dozen or so lawsuits across the country by warehouse workers that say they have to stay in line for 25 minutes to be screened as they go in and out of the warehouse is -- screening for theft. if they are stealing something from the amazon company sells. the employees say they are not getting paid for this time. i want to get to our amazon reporter, spencer, who has spoken with a number of these warehouse employees. what are they telling you? how bad is this? employees thate
i spoke to recently say this is not really an issue right now, security lines are moving fairly quickly. this case involves one man that were there in 2009 and 2010, so it goes back a few years. there have also been newer cases as recently as one year ago. so, we are looking back on this. there is also some seasonality. the lines could be worse during the holiday shopping season when they have more people working. >> in general, what is the process -- you do not get to badge and until you are through security? out --s actually badge and then you wait in a line and make sure you're not stealing anything on the way out. it is not a general security screening for the safety of the community, making sure you're not sneaking weapons and, but it is after your shift is over to make sure you're not stealing
inventory. it is for the employer's benefit to prevent that -- theft. >> i know you have visited these places, not just in nevada -- i have been to two in nevada -- there is a bigger issue about what the new tech worker looks like. we like to think it is some guy driving up to 80 in his tesla on hisway to cashing in facebook options, but there is a different aspect to what tech is doing to the economy. >> amazon combines inventory and the shopping, so they are doing the shopping for you. >> is a very physical, factory-like job. >> exactly. a lot of them estimate their walk 15 miles a day. they have productivity quotas they have to meet. they do not meet them, they can be fired. it is a physically demanding job. some of the workers said they would like to be home resting, not standing on line, being treated like a criminal. forow serious is this
amazon? when i first read the story, i thought how unjust, but then i found out that retailers lose billions of dollars every year to employee theft. how serious is this for amazon, and what should the consequences the? ?- consequences be >> it is very serious for amazon, but the question is whose responsibility is it? should they be protecting themselves against that on the employees time or their own time? as long as it is on the employees time, they have no incentive to move those along quickly unless it is employee morale. they could have the authority to invest in more guards were screen equipment to keep the lines moving more efficiently. >> they are hourly workers, so they are getting compensated for how many minutes, hours they are in the building, correct? >> not in the building, if they are going through the security line.
they are clocking out, the shift is over, and they are not compensated for the time they spend leaving. >> you have seen the buildings, and you have as well, cory. what do you guys think? >> to your point, they are not allowed to leave work and not being paid for the time that they are not allowed to leave work. these are not even amazon employees, they hire a contract agency to employ them, and that is part of the suit, but they are required to be there. they are not paid for the time. it also talks about how amazon has treated these employees, and spencer, before you came to bloomberg news broke and amazing -- broken amazing story about amazon keeping ambulances outside of a plant. tell me that story. >> so, in pennsylvania, during some heat waves in the summer, they had ambulances parked in the parking lot because so many workers were suffering from
symptoms of heat exposure. >> as opposed to getting air-conditioning. >> exactly, but they had a system that was not working. the heat humidity would exceed 110 degrees on hot days and emergency room doctor treating the warehouse workers coming in file the complaint with osha to say check this place out. next you make technology works on so glamorous. >> you make technology work sound so very much -- glamorous. >> there is this tension between amazon and its workforce, and some is just the nature of the business model. they need a lot of people for a narrow window of time, and there is not going to be worth or all of those people after the holiday season ends. part of it is the business model. it is not a great gig. oper, thank you so much. we'll continue to follow the story. i think they should get paid for the time they are in the building. >> i do, too.
>> when they walk into the building, if they are on the premises, paid them. >> they do not make a lot of money in the first place. >> not cool. >> coming up, a lot of jews in here about the founders of twitter and the whole story -- a lot of juice in here about this founders -- the founders of twitter. we will be speaking to nick coming up. ♪
but things have changed. nick joins us. the coo is out. the new cfo is in. it seems like dick costolo has more control than he did when you wrote the book. >> i feel like we are talking tv show.eality >> it was kind of like a tele-novella. >> it was a murder mystery, in many respects. >> nobody got killed. >> well, we do not know. >> that is true. exit is interesting, when i wrote the book, there was so much drama in the story there were things that i left out. >> like what? >> well, at the end of the book, jack dorsey returns triumphantly, and all of the early founders are forced out to leave, but after the book ends, there is another set of drama where other people are fired, and there is a battle between jack, dick costolo, and all these things are taking place. >> is that still happening? now, after i wrote the book,
i thought the company would relax and have everything sorted out. it did not. it was chaos again. , andfo became the coo essentially tried to take over as the ceo. that is essentially what he was trying to do. dick costolo essentially said enough -- this is my company. i want to run it the way i want to run it. that is what we are seeing now, and we are seeing the drama has dispelled. >> ali trying to lead a coup. is that unique to any company one ofes from infancy to the most influential companies on the planet -- is there something broke inside, or it is just growing up? >> if you look at certain comments, all four comments. -- all four are there, and you pick up the yearbook, they are still best friends today. >> do they get the scrutiny -- my mom is not talking about vox,
but talking about twitter. >> exactly, and that is great for me, selling books, of course, but when you look at the founding of twitter it was four friends that came together to build the thing, and they were themselves apart. a couple of them became billionaires, and a couple did not. amid the social network with a game of yossi. but there is blood on the floor at facebook -- yet see. >> there is blood on the floor at facebook also. it have dick costolo taking back, and then peter steele called it a horribly mismanaged company, saying there's probably a lot of pot smoking going on there. >> air is a story about some pot smoking when snoop dogg showed up at the office. is doing what i'm trying to do, sell books.
>> that is mean. >> he said you could throw a grenade into twitter after 6:00 p.m., and the only person that would get killed is the cleaning lady. he does not like the company. he is a big fan. >> he might be trying to sell books, you are trying to sell books, but here at vanity fair, jack dorsey went from number nine to number 14. has something happened in the last year where things are on a right? >> that is a question. emily had something happen. >> this is an unflattering portrayal of jack dorsey. he is facing scrutiny. does it have the future, the big exit that he was hoping for? >> i do not think jack is a bad guy. he rose quickly in the public eye, and he did a lot of things he probably should not have done to get there. >> like what? >> the book talks about pushing
founders out, taking credit for things he did not do, and things like that. over the past year or so, he asserted to realize that those things will come back and the truth will eventually catch up. i think he has changed a little as a result of that. twitter will be fine. it is an interesting business. go to any farmers market, everyone is using it. or is a purpose. the company -- there is a purpose. the company also has a lot of challenges. >> all of the founders have come back to you, challenging some of the things you have written. what did they take issues with? >> there have not been that many challenges, believe it or not. what was interested -- interesting to me when i started writing the book, none of the founders wanted to talk to me. none of the people involved wanted to talk to me. i was writing the book, and what i did was collect thousands and thousands of tweets, flickr photos, youtube videos, piece together the story, get internal
documents, e-mail, things like that, and there was so much information the founders created, they did not have a choice but to tell their story. >> a true murder mystery. it kind of was one. angela lans bury. >> i wrote a book in that way. it opens up with a dramatic throwing up in the conference room. i wrote it the same way i reported it -- i found a piece of information from someone at twitter, and i knew the story that the public have been told and the story the book tells were different things. in the end, they all ended up in the places they were supposed to be. one of the saddest, but happiest stories -- iz would agree? b >> he is having trouble with startups, but if you look at the forgotten founder, who came up with the name, i spoke with him after the book came out, and he said -- i said do you have
regrets, and he said in the beginning, more than fame and fortune, i just wanted friends. i ended up with none of that, but i now have a family. he learned the most out of all of them. >> you believe him. >> i totally believe him. he lives in an earthquake shack and san francisco, rides his bike every day. he is happy. >> the story is certainly not over. twitter has only started its journey as a public company. the stock still below where it started. we will continue to come back to you for what is going on at twitter and thank you for joining us. now, we'll be back with more of "bloomberg west" talking about symantec, which is now talking about splitting into two separate companies. that is next. ♪
>> welcome back to "bloomberg west." i am emily chang live from the vanity fair new establishment summit with stephanie ruhle. another big story we are consideringymantec splitting into two separate companies -- a facility company and a storage company. i am sensing a theme with ebay .nd hp >> the goal is to become more efficient and profitable. remember, the companies are under the gun from shareholders and the biggest shareholders, activists. instead of waiting for something to happen, they are getting proactive. cory johnson? >> it is interesting. this company acquired veritas to build out a stored software business and it has been lucrative in the process. they have used the cash to do
two things -- one is share buybacks, dividend payments, and investors love that. i have also made a mess of the company. 23% operating margins, 30% of semantic revenues -- a big chunk of their business -- 38% of symantec revenues -- a big chunk of their business. this a trialis is balloon, or truly the way forward for a company that has had management issues at the top going back and neck -- last couple of years. >> a lot of management issues and hack attacks happening. here is my question. they have explored the possibility of this before. they have shelves the idea. why now is it suddenly ok since ebay is doing it and hp is doing it? >> it is really a question of how they will pursue the cyber security market that a lot of people see as a great potential business for symantec that they have not monetized in a way they have seen competitors monetized.
they have sprung up all around them. there have been a lot of challengers to the semantic thrown, but they have not emerged as the dominant company in cyber security as the way that perhaps might have been that opportunity. the suggested -- the suggestion is they cannot stay as focused managing the storage business, but it is also worth noting the storage business has been a brutal pricing environment and a difficult way for them to come up with -- the theory is they would have a high level of monetization by being at the top of the software stack. instead, they have been caught in a constant decline of racing in the storage business that has affected the software, not just the hardware. >> symantec and companies dealing with major hack attacks from jpmorgan, target, home depot -- a lot of fingers pointed at symantec. >> it is not see many of them are getting it right. >> we will talk to keith alexander, former head of the national security agency later
today on bloomberg television. also coming up, max legend, cofounder of paypal and ceo of the firm. i want to know what is on max's mind. ♪ it is 26 minutes past the hour. bloomberg tv is on the markets. let's get you caught up on where stocks are trading today. for a much a mixed day for the big benchmarks. all in the green. the s&p is up to 10%. agricultural, farming, machine stocks, worst performers today. looking at the nasdaq, call it a flat session. the dow is up about .25%. investors are solidifying the trade ahead of the fed minutes at the top of the hour. here are the individual movers. posco shares are trading -- shares toppedo estimates.
>> welcome back to "bloomberg west." i am emily chang live from the vanity fair new establishment "ummit with "market makers anchor stephanie ruhle. we will talk to max levchin, cofounder of paypal, and ceo of affirm. he is here to talk about moonshot. it is something that has been bothering you. you didation enough -- not think there was. you have changed your tune?
>> i've decided to disrupt a few things in banking, and it seems a lot of other people are doing similar things. >> tell us what you are here to talk about? >> whatever it is they wanted to talk about. my job is simply to pronounce that innovation is no longer quite as bad as i thought it was. of moonshote think like flying cars and spaceships. >> it seems like fantasy world. >> that is the stuff that gets a lot of attention, which is really great, because it inspires other people. speed is more mathematically inclined, disrupting finance, rewriting the way credit underwriting works, trying to use data and science to get women pregnant, easier, cheaper. slightly less glamorous, more about making the world a better place. >> and you are having success in
terms of fertility? >> not personally. i have had my success with two beautiful kids, very excited. >> the most loved project. "my baby."st said >> it is. bornve 30,000 babies being . it is working really well. we have reduced costs for these women that have christie found themselves infertile to get -- that have previously found themselves infertile to get pregnant. >> what about affirm -- this is your attempt to reinvent the banking industry. >> i realized what it really is. i am not sure that it is reinvention, it needs reputation adjustment. i think inking is just awful. people that are scheming -- i think banking is just awful.
it is people scheming. >> a reputation adjustment? silkenhere and put valley -- silicon valley people on a pedestal. aren't there bankers that fuel american dreams? >> there are those, but there are those that tell you to get into a credit card, and you know that that will get you into a whole and that is not a good reputation. yet, a credit card or a debit card is a great tool. it should be maturing and getting smarter with the 21st instead, millenial's, the reefer century consumers, they hate those things, and they know better. they do not go into macy's or gap. they run away. >> there is so much happening
when it comes to how we pay for stuff. apple pay is coming out. what is the future of paypal? will they be out there buying companies like square, for example? they have been criticized for not innovating over the last decade. >> i hope not. >> you hope they do not buy square? asi am impartial or neutral i'm not close enough to the situation, but what i hope they do, first and foremost, is wake up and say, hey, you know what, we have not been friendly to a new type of a participant in silicon valley, and that is a start developer. there are a lot of little companies that are saying i want to plug into the infrastructure that is the payment system, and they have mrs. -- being reputation on
extraordinarily developer friendly and paypal deserves to be a participant and frankly stuck in the 1990's when it comes to that. >> what you think ebay is up to? >> ebay has a pretty good business. i believe e-commerce is changing. if you look at offline coming to online -- offline is still well north of 95% of overall retail sales in america. a lot of people say i ought to open an online store. ebay should be a platform. onre is a ton of innovation the ebay platform, just making e-commerce, retail a better, easier thing to do. >> would you think of the new paypal ceo question that we do not know a lot about him, and american express executive -- not a silicon valley guy. >> he is a champion for the under banks, so he is not a typical wall street love him and leave him. >> i think that makes three of us. i have not met him, i do not
know much about him. i hope he embraces the culture of silicon valley -- innovator, taking big risks. i wish him the best of luck. >> will paypal become bigger than ebay? probably.-- it is one of my babies. >> your first baby. , cofounder of paypal, also on the board of yahoo! and yelp. we'll talk more with him after the break on this special edition of "bloomberg west" with stephanie . ♪
we want to talk a little bit about bitcoin, especially given your background in finance. bitcoin is crashing -- how optimistic are you about it as a disruptive current say? >> i am equally or more optimistic about the implications for the technology. with every passing day there is a new, clever idea, some in the form of startups, or some just an idea being published, and you say bitcoin makes sense. somebody asked me, what would you do is if you want to -- what you want to get what -- what would you do if you want to track political contributions, and the answer is bitcoin. crashed,that it has confirms my point that it is way too out of to park real money in. >> trading it has never been the right move. >> for me. there are people that have much better stomachs. >> your cofounder and friend iel is not optimistic
about bitcoin in the least. part of it, he told me, is because of your experience with paypal. it did not like work out the way at least he planned it to. >> yes, i agree with most of his arguments. the difference between us in this case is that i view bitcoin as a fundamental technology that i think goes on to be extremely useful no matter what happens. as a currency, questionable. as an active class, way too volatile poll -- volatile. , veryay of exchange valuable. >> i want to talk about snapchat . here at the vanity fair summit we will hear from evan spiegel. yahoo! is a company that is near and dear to you. would you make of all of this? >> whatever it is that i make of it, i am not at liberty to say anything. i'm on the board at yahoo!. >> would future do you see in snapshot -- snapchat -- we are
talking about disappearing content, but it is so viral. what you see in snapchat that you do not seem facebook or twitter, for example? >> i am not sure which way the puzzle plays itself out. what i think is going on, given mobile, the shift to mobile, smallscreen, always on -- we are poke anden product, -- prod, discovered by trying, figuring out which modalities of interaction make sense. idea of a photo the disappears was something out of a spy movie, and now it is perfectly reasonable. it might be something that becomes a permanent part of our reality as humans. we need messages that do not live long command we can be more honest that way. i do not know which way that plays out. a similar notion was out about is 140 characters enough -- it
is certainly valuable according to the market today. how that plays out, we will find out? >> should they shuttle that? >> i am elated to make sure she meets her plans and i support her. >> let's talk about marissa mayer. i know you are a huge fan of hers, and our people out there who say time is running out to show her cards, essentially. how do you respond? >> i do not think she has been hiding her cards. i think the strategy, the mantra habit productsly has always been out there in the open, and she has been executing on that in both her rhetoric, acquisitions, execution, or plans. i think she is in charge of a very large ship. no matter how quickly you want to spin the wheel, it will take a while to get there.
>> what you feel she is spinning it, and those partaking that say the clock is ticking, you disagree. >> the one thing nobody could argue with is the woman works -- i do not look at the stock price much, but i look at her work ethic. when my phone rings at 2:00 a.m., it is probably marissa boardsaying we're doing a meeting in a couple of hours. clutches is because you are working seven days a week -- >> just because you're working seven days a week does not mean you're doing the right thing. >> she has hired a lot of people, and almost all of them have stayed on her team as a testament to her intelligence. i am very supportive of her plan and what she has done. there are challenges, and it is not like everything is going perfectly according to plan every single day, but i am pretty impressed. >> what about combining with aol -- aol?is
>> that is certainly not something i can comment on. thihat about eater -- peter el. is aid he think's yahoo! bet against innovation, and trying to do something new would be setting herself up for failure. how do you respond to that? >> maybe you do not always need to innovate. there are great products. i use yahoo! weather every day. >> i am a spokesperson for orissa -- former resume or's -- marissa mayer's strategy, but peter is excellent at being controversial. yahoo! has an amazingly sized and purely for a ravine inside, existing business. it is what it is, but it was built in a time when we were on
desktops, and things were done in a different way. the smaller screen challenge in front of you is a real thing, but it is a massive brand. there are hundreds of millions of people that trust and love it. s froming their habit doing things on desktop to mobile is happening. yahoo! is trying hard to make sure we meet mobile products that exceed or meet their expectations. it requires innovation because a lot of the stuff does not exist. >> peter also said yahoo! is not a technology company. >> that is very much untrue. it is probably more of a technology company that quite a large number of startups that i'm intimately familiar with. i take personal offense to that. you take personal offense? >> i will take him up on that one. one of the original cofounders of yahoo! is something that i --
someone i interact with quite often, and he is a pretty impressive technologies. >> max, you're the best. always great to have you. very much looking forward to your panels today about moonshot. thank you so much. i want it to mark crumpton, " bottom line" anchor who has stories about the rest of the world. >> we will follow the latest developments on the ebola outbreak in west africa. we have learned today that the ebola patient being treated in dallas died this morning. i will discuss the virus, with the u.s. is doing to help, and the decision by the department of homeland security to start screening travelers coming into the country. the discussion with california commerce woman karen bass, the ranking member of the house subcommittee on africa. back to you in san francisco. >> mark crumpton, we will see you in a few minutes. coming up, we will talk about apple.
>> welcome back from "bloomberg west." i am emily chang with market makers anchor stephanie ruhle. we are talking to them biggest influencers in technology and media. lee -- lead designer at apple will be here. >> hopefully you will not have the iphone in his back pocket. >> apple has sent out its official invitation for an event on october 16 in cupertino. we are expecting a new lineup of ipads. cory johnson, back with us now. you and i have been talking about ipads and the future of
sales have been slowing down when it comes to the ipad in particular, yet they are also planning to launch, as far as we know, a 13-inch, giant ipad. >> which stephanie ruhle should not put in her back pocket. do not put that in your back pocket. it could get stuck in your hair. >> that would be a big pair of jeans. >> i am not going there. it is a big development for a company that has seen shrinking sales for a couple of quarters, a company that saw massive adoption that we have never seen before -- faster than the first cell phone, the internet, the pc. tim joins me. when we look at the device, they will say it is faster, thinner, better, the best ipad ever. why is it important? >> getting into holiday sales, they will need to help improve
revenue. it is the second-largest revenue producer for apple and they have been decreasing the last two quarters, so many more magic in the line up. >> it is amazing that he became the second best-selling product. who could imagine anything would rival what the phone business has become, but the apple ipad quickly leapfrog pcs and has become a world changing device in the world of business. >> what is interesting to see is how it plays out with the larger ipad and the ipad mini. it will be interesting cross-pollination. >> and 12 inches -- do we expect the big one? >> probably next year. >> applicators such a secretive, tough hold on there secrets that, you know, you wonder how that might affect sales knowing that something else is coming. >> we expect the current big one and the many that is out there that is out there -- we
expect updates. >> i want to know about colors? to get a gold ipad to go with a gold iphone 6? >> that is what sources tell us, to add a little pizzazz. correct pizzazz -- >> pizzazz? i have not heard the word since liberace. could --eem like apple does it seem like apple could give themselves more time before another brand reveal?? hiccup.not want another >> the hiccups they had with the iphone 6 had to do with the larger screens, so we are not expecting larger ipad screened at this point, so production-wise, it should be rather routine for them at this point. >> tim higgins, thank you for joining us. it will be an exchange store if
they can revive sales. beaking of big numbers, the -- one number that says a lot. >> since we are talking pizzazz, i would deliver the big number with jazz hands. one is my big number. elon musk is number one. if you think about who this guy is, this character, this force -- everyone out there, he is a person vanity fair is naming as their top dog, but elon musk is not the most outstanding. number 43,s, the this year, skyrocketing to number eight. new york,ities like san francisco, los angeles -- many of us feel they are taking over the world. talk about disruption. uber has disrupted the way a lot of us live.
anthey have raise money in 18 billion dollar valuation, but has had trouble dealing with regulators in new york, san francisco, and around the world. when you talk about the sharing economy, guys like uber and airbnb, they reinvented the sharing economy. ceoll talk to the airbnb tomorrow on stage, but so much disruption -- when you look at the list, it is incredible, all of the people out there changing things in tech and media. >> interesting storylines. the elon musk is a classic one. we do not know the storylines and uber, it is profitable. we know tesla loses boatloads of money every single day. >> there you go. >> i knew this would happen if we brought up tesla. >> guess what, find me someone that owns a tesla that does not love it? sell a dollars
etc. from bloomberg world headquarters in new york, i'm mark crumpton and this is "online." the business under section -- the intersection of business and economics. releasingl reserve is the minutes of its open market committee meeting. our chief washington correspondent, peter cook, has the details. >> this was the meeting back in september where the fed decided to maintain its forward items, that rates would likely remain low for a considerable time, but