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tv   Bloomberg West  Bloomberg  May 12, 2015 4:30pm-5:01pm EDT

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emily: rison's plan to take on google and facebook, but is there room for others? that is ahead. welcome to bloomberg west. i am emily chang. coming up, samsung unveils its new smartphones strategy, and what about a smart phone plan? i will ask the guy in charge and is an initiative a website killer? we will look at the eye-popping numbers that show the company's global reach, and will tencent take a page out of alibaba and unveil a strategy outside china?
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all of that ahead on "bloomberg west," but first breaking news. we want to get to julie hyman with the zillow results out after the bell. julie, what have you got? julie: a loss per share less than half what analysts anticipated, so the loss of five cents a share, and analysts have been looking for a loss at $.11 a share, so that is the good news. however, revenue coming in a little shy, $128 million that analysts had anticipated, and the company said they had almost 140 million unique users in march so those are the headline numbers that the company is coming out with. remember a few weeks ago, zillow came under fire by traders, and that is after the company talked about its numbers would be lower than had been estimated, it would take longer to get ftc approval for the trulia purchase, and one other note the stock is not trading yet.
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it was halted ahead of the earnings report, and it is still not trading, emily. emily: senior market correspondent in new york, thank you. i went to get to our top story verizon buying ale well for $4.4 billion, and here is the aol ceo tim armstrong talking about the deal on bloomberg television. tim: our strategy is the same. verizon is a big believer in content. we are a big believer in content, so i think it is a win-win. it mirrors what the verizon business is, and it is very exciting. emily: this gives verizon the two aol items, including their mobile technology, so how much of a game changer is it? does the price makes sense? joining enough to discuss from new york, a ceo and cofounder of a media platform, and also with us eeo of an online advertising
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company. john, i want to start with you. what exactly is the technology that aol has that verizon once so badly? john: what tim armstrong and his team have done is to build what is called an ad tech staff, which is technology that automate the buying and selling of advertising. particularly focused on video and i think verizon realizes there is a lot of money to be made in that business, and they are's he it he made over their networks, and they would like to make a part of it. emily: does this really allow them to compete with a company like google and facebook for advertising? aaron: they have bought something content players. the last couple of years, they made a bunch of acquisitions
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and this is really interesting to verizon, because verizon, as they invest more in video, they have a mobile video platform they will be rolling out this year, and they have a new deal with the nfl, and they want to be able to programmatically advertise. emily: john, you wrote a book on them. and they compete with facebook? john: well, i think they're going to find out. aol is making a game of it, certainly, and they have an approach to advertising which is an open platform, which is if you were a marketer and wanted to advertise on the platform taking that work and applying it to other platforms, you could. with google and facebook, that was very difficult to do. they try to keep you into what tim armstrong called their wild garden. verizon has a lot of muscle. if they decide to lean in, this could be the emergence of a significant player.
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emily: what about the video streaming? nobody quite knows how this would work, but the idea is short snippets of video pushed to your phone. aaron: i think it makes sense. people, especially younger generations, watch video differently, on different devices, and the content is very different. the way we go home, older people you govern, and we watched comcast or your cable network or verizon, and we all see these same commercials, but on these short snippets, you can see a commercial that is personalized to you, and a has technology to make that happen. emily: some are unimpressed. what do you think? is it something they can really pull off? is this a game changer for them? >> -- john: we'll have to wait and see and advertising company. this is a big bite for them, and it is a lot of risk, and i think
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the analysts are wise to point that out. they do not want to be seen as a dumb company, and this is part of their play to move into more profitable services. emily: aaron does the price makes sense to you? aaron: i think they have a great leader in tim armstrong. i think he has the right advice. everybody is waiting for the move from traditional tv to on demand and streaming, and i think aol is in a good position to capitalize on that. i don't know if they have a lot of choice. emily: john, things like huffington post and others what happens to those properties? john: a lot of people think they could be spun off or turned into another venture, but i believe it is very important for verizon to actually have direct consumer contact with a product that
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gives them a right to have a relationship and the equivalent of dropping a cookie on that consumer so they can track them a cross device and that is something aol is very good at. they have built that muscle over the last couple of years. the rise and got slapped on the wrist because they did not have that connection with the consumer, so i think they will keep the content. that is what i would bet on. emily: all right, john, you are staying with me. thank you, aaron. we are asking ourselves when is too much of something just too much? a facebook article now live, and it allows us to read the news without ever having to leave the social network, meaning the articles do not link back to publisher's websites. a new york times busby, national geographic, a lot of them have signed on, but others are wary, worried about facebook posting their content rectally.
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take a look at this chart. it shows facebook overtaking google when it comes to driving traffic, and then there is this, new data from the u.k. showing that facebook is overwhelmingly the only social network that people use their, for anything so john, what do you think about this phenomenon? you were the cofounding editor of wired magazine. would this make you nervous if you were a publisher? john: it would make me extremely nervous, and i think most publishers are extremely nervous, but they are also wise to try to test the waters and learn what this new system could mean. the truth is facebook is offering a pretty good deal to publishers. as i understand it, 70% of the revenues of anything that shows up that is advertising in the stream against the articles that are being published is given to the publisher. what i would want as a guarantee is that that would never go down, and i doubt very much that anyone is going to get that kind of a guarantee in the game, but
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this is part of a new ecosystem that is developing and for independent publishers it is kind of an existential question. do you want to go where your audience is and potentially be overriding on a source, such as facebook, or do you want to keep the audience coming to your own turf, your own home domain? i believe you should never leave your own home turf to be attended to by someone else, but not every publisher agrees with that, and certainly bus speed is the most aggressive. emily: jumping on the bandwagon and experimenting for now. all right, john, you will be with us later in the show. coming up, samsung has a plan to connect every device you own. we will sit down, next. ♪
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emily: samsung says all of its products will be conducted -- connected to the internet by 2020, and the chip that will make that happen, the samsung electronics president young sohn joining us in the studio now. this is like the next big thing for you. why? young: they are smarter, they are connected, and with the data that comes from sensors, we can make a huge difference in how we live, so we think about appliances, but all of the way to a time as vehicles that will
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be able to run. they are all part. emily: you know, obviously smartphones now have been hammered into a certain extent. are we seeing a major shift in strategy from samsung here to focus or on the internet of rings? young: well technology goes through transitions. you have seen the pc, and the smartphone has been running with apps, and it has been great the last several years. i think the smart machines are the next big things, and that will make our lives better. emily: how big is this do you think? the internet of things? young: some are forecasting this as it as 50 billion devices, but i think the opportunity is also the services. emily: all right i want to talk about smartphones, because smartphone sales accounted for 76% of profit a year ago, and
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now it is less than 50%. why is that happening? what trend are you seeing on the high end and the low end? young: things to deal with on the low end, like the chinese market and the high-end dealing with other competitors, but if you look at number of units, we are still number one in the market, so big business -- emily: number one in the market but that has changed dramatically in the last year. you guys are getting a run or your money. young: you have to make great products. we announced our next generation galaxy 6. emily: how are sales with that? young: i think that is ok. emily: how ok? young: i cannot talk about that. emily: how do you take those guys on? young: there are different
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players. we are in what i call our own brand to driving marketplace, so i think we have different competitors and different market spaces. emily: and where do you see the market moving when it comes to what people actually want in their phones and how much they actually want to pay for their phones, because you guys have a lot of midrange devices. young: i think you have to meet multiple marketplaces from low to medium to high. one thing we announced today is a module, and basically, we are using the same chips. emily: you brought a chip with you. young: yes. i do not know if they can see it. it is the size of a ladybug. it is so tiny. with low power it can go on for days, and you also need to have performance and conductivity.
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emily: there is a big question about leadership at samsung. obviously there was a major health incident for your ceo, and you have got other co-ceo's. who is leading the vision? young: we are very organized around each business. more component-driven business is actually making record profit and record revenue, and you mentioned about mobile phones. that is tougher. and the electronic business, we are number one in the consumer electronics space. emily: but tell me about who. who will be leading samsung forward. young: it isn't over $200 billion company. there is no one person running it. there are teams. emily: all right young sohn
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thank you. turning to a page from tech history, an australian entrepreneur just dropped more than $10,000 for three of steve jobs' business cards, and it marks his positions at apple pixar, and next three perhaps it was not just a sentimental purchase. he is also part of a company that shares digital business cards, and coming up, the biggest alibaba chinese competitor tencent, tells us how profitable they have been after this break. ♪
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emily: alibaba is closest in predator tencent has earnings
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out, and there was a purchase in zoo lily -- zulily. i will start with you. this is your bread and butter. bringing in more revenue, is that something that tencent will have to do, as well? hans: they tend to focus on the chinese market. emily: john, how much attention are you paying to what is going on with alibaba and 10 sent in china? -- and tencent in china? some of these companies are really struggling to get a foothold a broad. john: i am paying attention
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because alibaba has joined the conversation alongside facebook and google and there were very large numbers, billions of dollars, hundreds of millions of dollars, so anyone who is running a company of sums live and girth in the united states is now scrambling to have an alibaba and tencent and baidu strategy, to see whether or not their strategic goals aligned. emily: what are you going to be following? hans: one year ago, tencent started monetizing, and for now, growth is slowing down because they are doing revenue share. but there are two chinas. there is a new china, and they are moving aggressively off-line.
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there are a bunch of others out there. i think they would change the way the spending is done. where'd was not possible before. also getting some new territory to tackle. and over the next two or three years, we will see it from those businesses. emily: what about when it comes to messaging and naming? hans: gaming was a prophet for them. it is not obvious now but over the next two or three years, you will see that. john: i think companies like tencent provide a lot of companies in the united states the opportunity to learn, the mobile adoption and the conversion to subscription and paid services over mobile. that is something that we have a lot to learn here in the united states from a company like tencent. i think the question is whether or not the company's native to the united states are going to
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learn that quick enough or whether companies like tenenct will find a way to bring that here. emily: how much concern do you have about the chinese economy and what is going on there? hans: it is slowing, but that is ok. they have been going quickly. for a country that is growing at about 6% or 7% hello, -- or 7% per year -- emily: investors are not so excited. that is money off their market cap. hans: not bad. i think in time, the chinese government will send a signal to alibaba with that. emily: we just saw a study about smart phone sales. hans: the conversation has reached a level were you can have more services on top of that. before, it was playing games. that is the part of china that
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is exciting. people see the old china that is slowing down, but the new china is growing at up to 50% per year. emily: all right, we will closely be following those earnings coming up. john, you are sticking with us, and it is time now for our daily byte and today's number is 11. google says it's self driving cars have been involved in 11 minor accident in these years the company has been testing them, but google said in every case, it was the humor -- human operator's cause. remember, safety was supposed to be one of the main selling points. logo is trying to get in front of this story after the ap reported that three of the company cars have gotten into accidents since september. speaking of self driving cars if you remember, uber opened a research plant. i want to bring john back into
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this conversation. you are in new york this week. there is a conference with over 120 different conferences. you just wrote a very long and different blog post. whether or not they should be considered a new co company. what is that? it has to do with social goods? john: the idea that companies attract the best talent if they have some kind of positive change they are making in the world and i am not talking about saving, you know children in underdeveloped countries but, really, making some positive change towards a better society. they really are the best way of organizing ourselves and taking advantage of opportunities and particularly the millennial generation sees positive change as needed for a company they will do business with, and what this does is identify the best
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codes and organizes them. go ahead. emily: is it good or evil? john: it depends on which part of the elephant you are feeling up, to be honest. it has created hundreds of thousands of new jobs. it has given flexibility and extra income. it has probably saved countless lives of people who maybe should not have gotten in their car and drive and instead took an uber. on the other hand uber has been seen as a bully, has been seen by the drivers as taking advantage of them, and there is the 1099 economy that the former secretary is railing against white frequently so it is one of these great companies where we need -- everyone is talking about it, everyone has a pending about it -- everyone has an
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opinion about it. emily: thank you for joining us here on "bloomberg west." that is it for this time of the show. we will see you tomorrow at 4:30 p.m., and self driving cars, we will be talking to anthony foxx tomorrow. ♪
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>> i am john. >> with all due respect to gotham city, it takes big shoulders to support a presidential library. ♪ on the show tonight, first, the deal that was blocked, or is it? the trade measure that has been washington's main focus this week is in a trouble. president obama in his own party this afternoon,

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