tv Bloomberg West Bloomberg January 2, 2015 6:00pm-7:01pm EST
>> live from pier three in san francisco, this is "bloomberg west." we focus on innovation and the future of business. i am cory johnson. the cdc is hiring a new lab safety supervisor after a string of recent mishandlings in its laboratory. they were transporting a mislabeled sample of ebola and employees in quarantine is only one. in the last few months similar , incidents have happened at the agency involving strains of avian flu and anthrax.
senator harry reid is recovering from a fall yesterday in which he broke several ribs and facial bones. the accident occurred when he was exercising with a fitness band which snapped causing him to fall. the nevada senator who is a former amateur boxer was released from a hospital and will travel back to washington for the weekend. former nsa director keith alexander is speaking out against companies considering retaliating against hackers. some companies are turning to the offensive tools in their battle against cybercrime. the former nsa director said companies should not be wading into this fight. >> i think it's a national responsibility, a government responsibility, to respond to these. whether it is criminal, fbi or it's a nationstate. you cannot have companies escalate us into a crisis. so i think what the administration and what the government has put out today is in fact the correct approach.
companies can do more to protect their networks and that's perhaps something we should discuss. >> he made those comments in an interview earlier today. u2 lead singer bono says he may never play his guitar again. he said his recovery from a november bike accident in central park in new york is worse than he expected. the band is expected to be back on tour with his vocal chops in may. now to the lead, hackers took sony's playstation network off-line for three days after a christmas day attack. this was the single most important days for the playstation. they were supposed to be. sony is trying to make amends giving back to customers and apologizing for the outage. the playstation plus-minus will get an automatic five-day subscription suspension with one-day offer of a 10% discount on content.
microsoft's xbox was also hit by the same cyber attack and the network was restored the following day. is sony's make good enough? i was surprised when i went online and people were not whining about this more. this attack comes at an important time for sony. >> it is an important time and it's a good solid gesture. i am surprised there is not more whining as well. as a matter of fact, i talked to some of my senior guys who are core gamers and in that key demo for the gamers. they don't think it's quite enough. it seemed to me like a very good gesture and offer, assuming no more problems going down the road. i don't think will we be talking about this a month or two from now. >> i remember trying to set up my xbox one and it was a pain in the butt i never got online. how important is christmas for these two networks that are the
future of gaming? >> christmas is always important. because you are getting the new box and new software and time on your hands but the year has elongated. january is a big month. we have continuous rollouts of releases now. this is not a fatal problem. remember, xbox went through the double xx's and there will always the se technology problems. you could not do this in the early days of ps2 with a connected console. >> what is the core gamer audience? how old are these guys? do they ever get out of the basement? >> they do get out of the basement and many of them are active sports players. typically, we talk about 13-24 is the core and 13-34 is the broad core. it's mostly male, not exclusively but they buy a lot of games and spend a lot of time
and money on gaming. they are playing on different platforms, not just on console. i once heard a woman say that i used to be a gamer but then i discovered life. >> yes, although i don't know if that's necessary. the revenue numbers are impressive. in the gaming industry, they like to say four out of five people play games. they sort of throw in angry birds and candy crush. we know the revenues are bigger than movies but how big is the audience size? >> the audience is about half or slightly more of all those gamers. we talk about 70% in research playing some sort of electronic game. about half of those are playing console games. they are spending more money. increasingly, people are also spending more money on immersive games on
tablet but it will be a lot of years before the non-console devices make up for the money that's coming off of consoles right now. that drives a big piece of the total and i expect that to continue for a number of years. >> sony has a bigger business with the new console than the xbox has its make good for users. microsoft was down for a shorter period of time but then did not do any make good. is that a bad move by microsoft? what does it mean? >> i don't think people will spend a lot of time comparing make goods. they will look at if they can get online now and what is the software available now and what are the games i can buy in the few months ahead. this is about pricing of the box and about the quality of the games made for the xbox one or the ps4. technology outages happen and this was not some massive security breach of e-mail addresses and credit cards.
i don't think this make good will be a battle between the two big boys. >> this time it wasn't the kind of breach but the last one was a breach of e-mail addresses. is there some sort of technical superiority for xbox? i have been in a secret room in redmond, washington where they monitor the entire network and it looks like mission control. you have technical guys monitoring the network with strengths and weaknesses all over the world in real time. does this show us that the xbox is a superior technological platform? >> i thought all the rooms at xbox and microsoft were secret. i did not know there were some that were not. >> i found a key in the parking lot. i put on my steve ballmer mask. >> the consumer believes the technology superiority comes with microsoft. it's a brand image.
sony has great brand imagery around technology and around home entertainment. i don't think this will be some sort of big discussion about who's got better technology. the playstation network has come a long way. xbox live has been the leader in connective consoles and they both have a lot to be proud of. i don't think this will be the big issue. >> what is your favorite game right now on the xbox or playstation? >> my favorite game? my guys have been loving all of the new sports games. i am a tablet gamer. >> really, which one? >> my favorite game is two dots, a simple game. i don't own any of it, it's just a fun way to take a break when you're outside the core. >> i watched football yesterday and played 2048 on the tablet.
day for a taxi driver, how did they do? >> uber just released the number and it was the biggest night in the company's history. some statistics for you. they gave 2 million rides which was in line with expectations. at peak, they were dropping off 58 rides per second and after midnight, more than 20,000 people downloaded the app. another thing that is funny as we learned people in paris party the hardest. paris peaked after 4:00 a.m. >> no way. i know people who party and they are not in paris. >> san francisco had the wimpiest peak hour. 1:00 a.m. if you look at the numbers -- this is the city chart. san francisco was home early. >> for our radio listeners, this shows a big dip at about 11:00 p.m. and things go crazy at 1:00
a.m. in the west coast, we start celebrating when the ball drops in times square. you can see that 1:00 a.m. things get crazy and at 3:00 or 4:00, things are dead except for paris. >> i was shocked by the paris numbers. i have been there and i did not stay out that late. >> you missed all the fun. >> this illustrates the massive year that uber had. at the beginning of 2014 there were operating in 66 cities across 20 countries and they were valued at $3.5 billion. fast-forward 12 months and they're operating in 266 cities across 53 countries and they are valued at more than $40 billion. i saw all kinds of reports that uber hit's the bumps this past year. it had a tremendous year and they ended 2014 with a big bang.
>> i suspect -- in oil and gas you call it in fill where you discover oil and you fill it in with more wells and i bet with uber, the cities they are in they added more cars and customers. >> yes, and i think they are namebrand recognition that skyrocketed. everything that is a new invention is now the uber of x y, z. the fact that 20,000 people downloaded the app after midnight was astounding. >> last question, what did you do on new year's eve? >> i was not in an uber. i had some friends over and we drank champagne and played games and my friend was going to take an uber home but it was three times the price. i think it was subways for
everybody. >> sounds like a rocking new year's eve. thank you. >> i bet i stayed out later than you. new yorkers party harder. >> i'm an old married guy with lots of little kids but yes, it was cold here and clear and the best fireworks in years. thank you very much. we are tracking your daily byte. city planners could make improvements in the way the city works, how one little fitness app is teaming up with cities to do that next. ♪
facebook gave its users a gift. the automated feature on facebook highlighted major events that people might have wanted to forget. like the death of a family member or other things. facebook apologized and said it could do better and for more on this, i'm joined by the author of "the facebook effect." great book. let's talk about this most recent kerfuffle. what bucket of facebook problems do you put this into? >> i would put it on 1.5 on a scale of one to 10. i don't think that many people were upset that i think they actually did show some insensitivity which tends to happen with them periodically. they have this assumption that everything you want on facebook, you want people to see all the time. they are always trying to come
up with ways to make the things people put on their more visible. this is the same thing that happened with the newsfeed way back in 2006 which is the biggest crisis they ever face. they thought people want to have more access to things they have already posted. this is the same. in fact, some people did not want to be reminded of painful and tragic or disastrous events that happened this year. the worst thing was that when some people saw the prototype year in review, the first image that was put there was something awful like the guy that complained, it was the child that had died that year. it was very insensitive and they have something to learn from this. i think they learn quickly from these instances. >> what is the process of learning at facebook? how do they figure out this is a problem? i'm sure they get criticism for things that they exactly want to do but in other cases they need to learn from these things.
what do they do internally to understand this as a company and make changes? >> they are constantly trying to get better. they have a habit of continuous improvement and some degree of humility. one thing that came out during the coverage of this that i had not known is that they recently created an empathy team to they are consciously trying to understand more of the consequences of some of their decisions. now that they have 1.35 billion people, they are managing the population of the planet in some weird way. most companies don't have practice doing this so they need to think harder about some of these decisions. i think they are product focused and very customer and user -- they don't use the word user -- they say people instead of users. they want to wonder what this means to people. they are not always good at it
because there are a lot of geeks, but they are quick to change. i don't think you'll see this exact problem happening again. >> maybe i need an empathy team. when you look back at this year of facebook, what stands out to you the most? what jumps out to me is the move to mobile combined with the re-acceleration of user growth. is that the best thing that happened for facebook last year? >> the continuing skyrocketing stock price with their well proven success with mobile advertising. also buying whatsapp and oculus. those were dramatic moves. you have never seen an internet company make an acquisition of the scale of whatsapp. it's an eventful time for this company. a lot of big things happened. the growth of internet.org is a huge development for the year. it's mark zuckerberg's
increasing commitment to bring internet to everyone on the planet which will benefit them but he argues will benefit the world as well. he likes to see those things in parallel as much as possible. you can argue whether he is deluding himself or not. certainly it was a big year and the success of the company from a business point of view was the bedrock on which it rested. >> could question -- quick question, with this big spending instagram looks brilliant but do they have financial discipline at facebook? >> i think they have huge profits and cash flow and they have good enough financial discipline based on the evidence. they have very savvy and experienced financial executives. i think sheryl sandberg is the top business executive who really oversees that even more
than mark zuckerberg who focus is typically more on the product. the buck stops there as well but i don't have any concerns about that. if you saw their money coming in less actively and they continue to do things like spend tens of billions of dollars on acquisitions, it would be a logical question. i think in 2015, you will see the financials do better. they are really increasingly the company that understands how to profitably do mobile advertising better than anyone. i think there global nature and extending into further geography will strengthen them financially overtime. worrying about them financially is not something i spend much time doing. >> when the money's coming in with a fire hose, it doesn't matter if you throw a few buckets around. the oculus bucket looks huge. >> it grew in size a lot since they bought it.
they have 500 million users. then you have the whole thing of having bought instagram two years ago for $1 billion and it was recently valued at $35 billion by citibank. i think their decisions on spending money have shown to be pretty smart thus far. >> i'm not good at math but $35 billion is bigger than $1 billion. thank you very much. "bloomberg west" will be right back. ♪ >> time now for bloomberg television on the markets. let's get you caught up on where stocks traded today. it was a mixed day today. stocks rose and then they ended up in the last half-hour paring their losses. tumultuous low trading day on the second day of january.
>> you are watching "bloomberg west." i am cory johnson. drones started taking up this year but will we see a huge advancement in this robotic technology? professor john leonard joins me for a look at the year ahead and robotics. i feel like in the last year, we have seen so much development and hype. is this the year we will see
more progress? >> i think so. i think about it that we are halfway through the decade of robotics in silicon valley. we are five years in from when google announced their project in 2010. they had robotics acquisitions last year and there is a wave of momentum out there. this year, i think we will see exciting developments but there are many great challenges still. it might take more than a year to see the real explosion. >> let's go through the top three big ideas and the things that matter in the world of robotics and drones and artificial intelligence. let's start with the google secret plan for robots. what is it? >> that's the big question. google has acquired about eight robotics companies. they've got some of the best talent in the whole world. they have kept pretty secret about what their plans are. there is speculation that it might be for moving things
around, the mechanical internet of things and automating the ability to ship things in place to place and that would involve manipulation and locomotion. all of the great challenges in robotics. they have managed to keep it a good secret what they are working on. >> and yet they might open the kimono this year and let us know what is going on. >> they had a leadership transition. you can have robots can be connected to the internet through cloud robotics. being able to recognize objects. i would say there is a 50/50 chance that they will tell us what they are doing and try to launch something. >> on the second one, there has been talk about california legalizing weed but not self driving cars.
do you think they will legalize self driving cars this year? >> they were mandated by the california legislature for commercial operation of self driving vehicles, not just testing. california missed the deadline and are having a public workshop to discuss what is going on later this month. part of the challenges how do you test these systems? google has driven over 700,000 miles and i got to ride in a car the summer and i was blown away and it's amazing and reliable. when the conditions are right but how do you leap to have the state certify that a system is safe for sale? they are working on how you test and validate this technology. >> last time i saw you, you had just come back from being in a driverless car. you were wide-eyed at that moment. >> yeah, i know "the new york
times" said it was boring because he saw the car four years ago but i worked on this and there is something -- i posted on my facebook page that i felt i was on the beach at kitty hawk. putting precision maps and perception into a product driving around the world mountain view is complicated with bicyclists and pedestrians. it was pretty exciting to see. >> his world has been more boring since he switched to decaf. these are interesting times indeed. the government regulations aspect i think is interesting when it comes to drones. your third point is about the rules for drones. will government regulation or the slow progress in washington keep us from having a drone economy and zone businesses from launching?
the plan was bad. i'm sorry. >> that's a great question. one of my colleagues had a project called the google wing project that went public in august and they had to do their test and play video in australia. what they wanted to do was not legal in the u.s. there are these great startups out there and efforts by -- like the google wing project were there is a chance to create a drone industry. i recognize the faa concerns. people have done some stupid things like flying drones near major airports. how do you promote the safe and wise and economically useful uses of the technology while acknowledging that some people are going to do stupid things? how do we get that balance? i think there is an industry ready to take off. >> now the pun is on you.
i was talking to someone in the cyber security world about hiring at the nsa. this person told me he came from there and said if you walk out of the best school in america with an engineering degree, it used to be you work in the nuclear program. you would work for the government. now you walk out of school and facebook and google are standing in line of the graduation ceremony to give you a job. are those the people that the faa cannot get a hold up to make the decisions about what could work and what would be safe in the world of drones? >> maybe, there are some interest groups trying to foster a good conversation. the young people in their 20's and early 30's that are down with this technology have many opportunities. not just the google and amazon of the world. also wall street. i read "flash boys." the high-frequency programming code jobs are similar to dealing with data streams and robots. it's a great time to be a young
high-tech programmer. >> that is a great tech book. a fantastic one. fantastic as always, john leonard, thank you very much. this is your second day to break your new year's resolution. are you sticking with it and what tech companies are primed to make money if you keep your new year's resolutions? that story is on "bloomberg west." ♪
biking. the founder joins us now. michael, great to have you on the show. in full disclosure, i am both a user of the app and a lover of the business. i love the idea -- let's talk about how much it is being used and what kinds of people are using it. >> this came from the realization that we had collected data on where people ride and run it can be used to make it safer. >> for people that don't know what is strava? >> it is an app and website for people like to write and run and we give you the motivating experience and track your workout out and connect with others to build a community. >> i don't really ride but i use it when i run. it measures where i am on my phone and i can see the elevation that sometimes terrifies me but i can brag about it and i share it with others.
it helps me monitor how far i go and so on. which is a big motivation. >> absolutely. when you run, your often running alone so this gives you more enjoyment after-the-fact the fact and connects you with others and that's what motivates you to do it more often. you have been on there for about a year and you find yourself running more consistently and that's what we see in the data. it will build consistency. >> out of college, i would create a spreadsheet. tracking it that way but this does it for me. but it also uses the latest in technology with gps and cell phones. >> that's what we have seen in the last 1.5 years in wearable technology that brings tracking fitness to life. you got the wrist wear. >> i've been trying to get you
on the show for a while. we've got new year's resolutions with people that got these things for christmas. how much do you see people using these devices? >> very much so. we integrate with everyone out there. the new year's resolution effect is great for many people. they get started and strava can help you stick with it. the motivation to continue to stay fit from being connected to others with social fitness. >> i wonder how many people get these for christmas and use a for a little while and then it drops off. >> if you make it through the first month, you are hooked and you stay on there. you build that consistency. >> strava metro -- because people are using the app and you are getting this gathering of all this information where people are cycling and running and now you are turning to the city planners to do what? >> to design safer and better streets for cyclists and runners
and pedestrians. to show where people ride and run, you can highlight intersections that people avoid because they are dangerous. you can highlight where traffic is coming in during rush hour. you can design those for more volume and better safety. >> you create this master map and you can see when cyclists are going across the city of san francisco and do a roundabout to stay away from something and then what does it do? >> it pinpoints retrospectively where people ride and run and walk and it helps them understand how their streets are being used. they don't have access to this kind of data any other way. you don't know where these people came from or where they are going to. with strava you can track the whole ride or run so you know the route people take. so when -- so in san francisco,
they might come through the embarcadero instead of market street. people cross market street because it is not safe to ride down. >> one of my producers broke his arm riding down there. he got caught in a cable car. what cities have accepted this data source? >> it started with portland. they were the first to come on board. it is now being used by two dozen different metros around the world. london. we recently signed deals with a handful of cities in australia. it's still early days and people are understanding how the data can be used in conjunction with the current methods of understanding traffic flows in their cities. we see this has brought a pill. -- rod appeal.
>> how do you make money? >> our primary business is to serve the athlete. our major revenue source is from strava premium. which is the best we have to offer. we also have commerce and metro is contributing some but the focus on metro is about serving the athlete with making the streets better. the revenue stream coming from metro is not as important to us as the message that we are here to make cycling and running better. >> more people running and cycling probably makes business better. fascinating stuff, it's one of those things that makes apps connect. we appreciate your time. 10,000 lights were said to be taken down, but now a last-minute fundraising project is keeping the bay lights
>> i'm cory johnson and this is "bloomberg west." it's been dubbed the world's largest light sculpture -- 25,000 led's strung up on the san francisco bay bridge. the project was started in part by a nonprofit group called illuminate the arts and backed by tech bigwigs. the project was set to be taken down this march, but they raised another $4 million so it will be reinstalled as a permanent fixture of that iconic bridge. joining me now is ben davis,
founder of illuminate the arts. this is beautiful. when you're putting it up, i did a story about it and i went and saw the artist on a pier along with a laptop trying to get the thing to work. he was powering the whole bay bridge project, a laptop. it has now become an a iconic thing for this city. >> those algorithms -- it has become something people recognize as the leading work of contemporary art and the fact that it is gone from temporary to permanent is really a beautiful act of community and generosity. >> what are the technological implications of this? each light has an ip address which means one strand of the bay bridge has more addresses then all of north korea.
it's just zip ties with an led, what does a permanent installation look like? is that good enough? >> this area is a hotbed of innovation. this has been a great learning opportunity to innovate and it's been perfect. to have it up for two years which gave us a real-world laboratory learning platform. at the end of our two-year run on march 5, this year, the current lights will come down completely. caltrans will come up behind us and maintain the bridge to a higher standard and innovate with new materials and we will come in behind them with a new set of led's that have been engineered and designed to perform well in this environment. >> i was surprised after the windstorm last week with winds up to 45 miles per hour and it looked like they were still there. how will you change this? one criticism i heard is that it
is more difficult to see it from the south. it was lovely for people on this side of the bay bridge but people down in oakland or south san francisco, you could not see it as well. >> this is the most radically accessible public art in the history of humankind and everyone cannot see it from their window but more people can see it from any place than any other work i know. there is good news. we had to keep the nodes rotated in some way. >> i will have to research that. there is a lot of architecture that could be considered art. >> the bridge is architectural and it has been transformed into art. when the new led's come up, we will rotate them more to the southeast and expand the view and lose a bit of the view to the far north in the east bay.
we want to make it as inclusive and expansive as it possibly can be. the other thing that will be inclusive is when it comes back, it will come back in conjunction with super bowl 50 in the bay area and will be tied to some of the kickoff festivities around super bowl village. all eyes will be on the bay area and all eyes will be on the bridge. >> thank you for your work. we focus on one number that tells a whole lot -- shelby holliday joins me with that number. i have no idea what it is. what do you got? >> it's not a good number, it's $7.4 billion, which is how much jeff bezos lost in holdings after shares of amazon fell more than 22% in 2014. it was a company's worst year since 2008 marked by a particularly rough third quarter. shareholder showed a lack of support for his big spending and pouring money into everything from smartphones to television programming to drones.
despite the bad year, he is still worth $28.6 billion and he currently ranks 20th on the billionaire index. i cannot say i feel too bad for him. >> he was still able to afford an uber on new year's eve. it is still trading 160 times earnings. >> it was the third quarter that was horrible. the fourth quarter is the best quarter of the year. >> they just love him last. 95% of my holiday shopping was on amazon. so he got some of my money. >> everyone i talked to still uses them. it's the first place they go to buy something. you don't see the lack of support. >> i am glad for both of you. thank you very much. the latest headlines you can get on your phone and tablet. we will see you on monday with more of "bloomberg west."