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tv   Bloomberg West  Bloomberg  September 3, 2015 11:30pm-12:01am EDT

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perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business. discuss the ceo search. who do investors want to see in charge? ♪ emily: i'm emily chang and this is "bloomberg west." coming up, jack ma plans a $2 billion loan against alibaba's stock. plus, the nsa and pentagon go to -- open source, but is it safe? and a messaging system gaining traction with corporate giants like cisco and unicorns like spotify. i will be joined by the ceo of lula -- all of that ahead on "bloomberg west." first to our lead, twitter
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shares are up almost 2% and the board meets to discuss its next ceo. we told you yesterday that jack dorsey is a front runner, but he's already the ceo of square and investors want answers. in the three months since the ceo search started, the stock has taken a hit, dropping over 21%. meantime, twitter is restructuring its theme. product team. it's new title will be twitter's head of consumer products. the big question is, will we get any more details today? here to help break this all down is sarah frier has been working this story with me. colin sebastian, an analyst to -- who covers twitter, and in new york corporate governance , a professor at the mit's sloan school of management. i'm going to start with our favorite tweet of the day -- a photo of twitter's headquarters saying, is that a white puff of smoke? just like it happens when the pope gets announced.
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everybody is excited for answers today, but sarah, are we going to hear anything today? sarah: last time we had a critical board meeting when dick costello was out the door, it was announced a week after. there could be a few days before we hear anything. emily: in that case, nobody knew for sure. sarah: there were not people like us poking around. emily: we are basically circling twitter headquarters every day, all day long. sara: yes. we have heard for a while that dick was on the way out. we just didn't know when. the search has been ongoing for three months. that's a decent amount of time to get something done. all signs externally point to spencer stuart has been calling up candidates. they have put calls out, we have yet to see whether that is concluding. emily: colin, you are saying that it internally it certainly
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looks like jack is taking on ceo responsibility as well. what are you hearing? colin: internally as well as among shareholders, there is a desire for twitter to be put in the same profile as amazon or google or facebook. each are run by a founder or cofounder, someone who has a lot of legitimacy to make tough decisions. clearly, a lot of change needs to take place at twitter and jack dorsey has those credentials. perhaps it is wishful thinking, but i do think he is on the short list. emily: investors one jack, but management 101 says you can only have one full-time ceo job. but look -- it has been done before. steve jobs did it. he was more than human, though. what do you think about jack dorsey's decision here? guest: i think it will be tough road to be ceo of both of these companies at the same time, especially if square prepares for its ipo. i think that twitter does need to go through a lot of changes.
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user growth is flagging and stock price is flagging and engagement is flagging, but i think there is so much potential in this platform if they focus on their ecosystem and focus on tweaking the product to make it more user-friendly, to reveal some of the value in all that data could be a huge success. that points directly at jack in terms of his skill set and leadership abilities, but there is the chip on the shoulder of having another full-time job , which will make it difficult to concentrate, i think. emily: colin, how bullish are you you on the future of twitter , given that user growth has been lagging. it's not like it's a recent thing. colin: we have been pretty cautious since the ipo in the stock. i would agree with comments around the value of the data and the real-time information platform. that's the longer-term perspective. i think where the rubber meets the road is that twitter has overly focused on monetization
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rather than the product. what we are seeing and hearing is that there is a sense of urgency, as sarah said, there is an effort within to work really hard on the products and applications. we will see that to the balance of the year with some new products and application enhancements. emily: when it comes to square, there isn't any indication he is leaving square, either. sara: this is a company when you have filed for an ipo and square has not said they are going to go public -- it's harder to make these big executive changes. it's a company that matters very dearly to jack dorsey, as does twitter. he has been splitting his time about evenly between the two. for the ipo, it is a concern.
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emily: sinan, what are your main concerns? jack dorsey is doing both of these jobs. that's the reality is long as this search goes on. does twitter need to make a decision, like, now? sinan: i don't think it is necessary that the decision be made today. i think much more importantly than making this decision quickly is making the decision correctly. as a shareholder myself, i would prefer they wait and get the right person in the right moment with all the right circumstances and constraints then rush to make an announcement to appease the market for some reason. i think this is a much more long-term business strategy. i think in order for twitter to succeed, it's going to take a long timeframe to implement the changes that are necessary, and i don't think that something a
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quick fix announcement can solve, it's something that will require months and months of hard work , and i do agree that the product is the key. i think the potential of twitter and the current state of twitter, there's a huge gap between these two things. there are a lot of things that could be done with the product that will take time. emily: colin, i want to point out when you walked in here, you mentioned nobody saw marissa mayer coming when she became ceo of yahoo. so that's always a possibility that there is an amazing outsider that we don't know about yet. we've seen some restructuring in the product category. colin, what do you think about these changes? are are we going to see more shakeups at the top? colin: i think so. there are good people at the top, no doubt about it, but that urgency, that relevancy among users needs to be protected and enhanced quickly. i think dick costolo was on the chopping block for some time before the announcement. i think a lot of time has gone by for them to think about the profile of the ceo they would like for the longer-term.
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i'm more in favor of the decision sooner rather than later. emily: well, we are watching for that white puff of smoke. we will let you know if you see anything. thank you all for joining us. another stock we are watching today, alibaba. joseph mann and the vice chairman are planning to raise -- jack ma and the vice chairman are planning to raise more than billion through a margin loan. according to people familiar with the matter. the loan may be announced as early as this month and the money raised may be used to fund the alibaba family office. alibaba has seen its stock tumble over the last three months as investors use it as a proxy for concerns about slowing sales growth in china. given the recent market turmoil, here's a potential silver lining for silicon valley.
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the skype founder says the recent turmoil will probably make the tech industry stronger. speaking at a conference yesterday, he said that great companies are created when the market isn't so good and market volatility shakes out those who shouldn't be there. he also had advice for startups saying founders should raise money whenever they can even if they don't have use for the money immediately. as you may remember, he cofounded skype in 2003 and was part of a group that sold it to microsoft 48.5 billion dollars in 2011. he now runs the venture capital firm atomico. just ahead, more government agencies are using open source, but is it the cure? we will talk more with github next. and one former spacex employee is using virtual reality to change the way we approach life. ♪
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emily: turning now to coding and developers -- open source is increasing its presence in the government sector, from local federal andthrough military agencies, like the white house and nsa. joining me is ben balter with github. take a platform that helps companies open source their software. first of all, what is open source in the government right now and how does it work? ben: it is code for the source alex: code being made available for
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others to see, review, and improve upon. in the government space, that is used for public engagement, making websites available for hackers and entrepreneurs to improve. and also for internal collaborations, to share code between agencies or between agencies and government contractors. emily: so why would the nsa and pentagon want to open source anything? isn't this top-secret information? ben: it used to be that open source was kind of a discussion. there were merits of open-source versus closed source, but developers today are growing up and learning to code in a world in which open source is just how you build software. you'd be hard-pressed to find a startup worth its venture capital funding that isn't based on open source in some way. so long as the secrets stay out of the source code, you are not committing the nuclear launch codes or anything like that, open-source is no less secure than closed source software. emily: so what is possible if the government open sources more software that isn't possible now? how do taxpayers benefit? ben: the idea is twofold.
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on one hand, you have the u.s. federal government being the largest single purchaser of code in the world. that is a lot of investment you can make in the technology industry. think about a space race for software, if you will. second, this is taxpayer-funded code. areand i as taxpayers paying for this code and the type of challenges agencies face are not unique to one particular agency. a blog post is a blog post, so open source gives them the opportunity to solve the problem once and solve the problem across government. emily: we are seeing a lot more presidential campaigns open sourcing information. can you give us some examples? ben: we have presidential campaigns on both sides of the aisle that are using github. the sanders campaign has their ios and android apps online, so if you want to volunteer from your living room, you can do that just by logging on and making some changes to improve
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the software they use to reach out to voters. emily: you are thegithub government evangelist. what is your job? how are you working to convince the government and different branches of the government that they should be using this technology? ben: my role is to make sure that when government agencies want to take their first or second step into the world of open source, that they are successful and have a good experience. and that the open source community has a good experience. unlike startups, which are a little more nimble and can more easily join the open source community, government agencies are very bureaucratic and process-driven. oftentimes, when a government agency looks to bring on open source methodologies, the technology is the easy part. it's not a matter of them being able to publish out the code, but it is really using open source is a vehicle and rethink their internal business processes and workflows, which
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is where i come in. emily: interesting. thank you for bringing us that story. this week, we are focusing on emerging leaders in virtual and augmented reality. today we focus on the ceo of alt space vr. eric cuomo was the 13th employee hired at spacex and he is now using his background as an innovator to alter the way we socialize. >> we think one of the most amazing things virtual reality enables is for people to feel like they are in the same place together. what we do is we bring people all over the world together in shared spaces and allow them to communicate and experience things together. the first thing we hear from people when they see the picture of an avatar is something like, gosh, when can i get to look like me? if you represent that in a way that doesn't look natural, the user's attention gets drawn to the thing that's wrong with the avatar, so we make it as abstract as possible.
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your user's attention is drawn to the things that are right. watching things together feels like you are part of a crowd and you feel like you're surrounded by lots of other people, even though you may be alone in your house in reality. the super bowl is a perfect example of something people like to watch in groups. so we had about 200 people come in on super bowl day and watch the stream on what seemed like a movie theater sized screen. this is something typical of people wanting to consume content together. there's still this question of is it going to be something only for the extreme gamer? we see that emotional experience you can have, connecting with someone thousands of miles away , is going to transcend that and make it something more mainstream. tomorrow we continue our series. beingl show you how vr is
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used to change the face of journalism. next, revamping enterprise messaging -- how much could a messaging app improve your productivity at work? plus, a roommate watching matching websites were syrian refugees. we will tell you all about it. as we head to break, i want to leave you with some footage of barclays latest artificial -- berkeley's latest artificial intelligence project, a preschool for robots. we will tweet the link using our handle, @bloombergwest. ♪
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emily: now to another story that , many oft our eye you have seen these tragic images on your twitter and facebook feeds. this three-year-old boy is one of at least 12 syrians who drowned attempting to reach greece. the image has become a symbol of the syrian refugee crisis. according to a un refugee agency, more than 2500 people have died trying to crossthe mediterranean to europe. our special bloomberg byte today is 25,000 -- that's the number of refugees currently seeking asylum in germany and a couple in berlin is working to do something about it. they launched an online roommate matching service. the service pairs refugees with citizens seeking roommates in germany and austria. more than 700 have signed up and there have been 124 successful matches. in the fast-moving world of enterprise messaging, some players are standing out.
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flack is the big name in the space, but another player is grabbing attention. still in its early stages and having raised $12.5 million in its series a, lua serves an -- service is an impressive list of clients, like united airlines, and the u.s. army. joining me to discuss the plans and opportunities in the messaging space is the lua ceo. michael defranco. thank you for joining us. it's interesting, because the origins date back to hurricane katrina. can you tell us how you started and developed the project? michael: i was working with a company that was providing communications for first responders in the field in louisiana. i began to realize that the critical break in the workflow was a lack of communication in the mobile devices. we began developing a system to help people in the field, and we have expanded into enterprises across the world.
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emily: what makes it better than any other enterprise messaging system out there react oh what makes it better than slack? michael: the evolution of the workplace has shown that mobile devices are being used more than ever. it was developed for the mobile device first. if you look at the way the world is moving, 89% of the u.s. is now using their mobile device and most of them are citing messaging as their primary workflow tool. since the majority of the fortune 500 has not provided any secure mobile first messaging to their end users, we have seen a really rapid acceleration and growth. emily: you have a range of clients, so i want to talk about the u.s. army. what is it about lua that fits their needs? michael: the biggest workflow has been communication in the field, especially as it has evolved to better technology in the field. that is a group we are not allowed to go too much into, but
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another great example is united airlines. they are a group we have been working with, helping with airport efficiency across the country has begun to improve the travel industry. emily: you have companies like spotify that uses both lua and slack. why is that? michael: that begins to show where we stand out in the work place. we have had a relationship with spotify for some time now. as slack was introduced into the engineering team, the rest of the organization began to take a look at it, and the comments around slack or for the sales side, and the business side, and operations and marketing side, it was too noisy and designed for the desktop worker first. we have been able to scale with them initially at a festival this summer and have continued to grow that relationship since then. emily: the holy grail of enterprise communication has been increasing productivity, getting rid of e-mail pileups. what do you think is missing in corporate communications right now? how do we become more efficient? michael: at the end of the day, it is about being smart about how you use the communication tools.
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we work within an enterprise management suite. when most of the fortune 500 is not providing messaging, that is where we come into play. i think it is about being smart about the way you communicate. a big feature is not just the messaging, but the international conference calling. the ability to press one click and get 10 or 20 people on the phone instantly allows you to have less meetings. the small inefficiencies are around too many e-mails going around. what we excel at use shaving seconds across your work flow, no matter if you are in an --port, hotel, or final financial institution, we all use our mobile devices more than anything, and i think it is all about being smart and respecting other people's time. emily: do you think e-mail is going to die or is it here to stay? michael: it's a way anyone in the world can communicate with anyone else. we focus on the internal workflow of your commute occasion.
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-- communication. a lot of clients say when we get an e-mail or slack notification, it's a bit noisy but every time we hear a lua ding, we know it and mostant, internal, likely critical communication, and that begins to relieve your inbox. i am not sure that e-mail is going anywhere, but if you can shave 40% or 50% of your workflow, that is where we come in. emily: we will be watching you guys. thank you so much for joining us. that does it for this edition of "bloomberg west." tomorrow, is this the droid you are looking for? we will be joined by the newest toy from the star wars franchise. ♪
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