tv Bloomberg West Bloomberg October 13, 2015 11:30pm-12:01am EDT
emily: intel beats ministry with invested earnings, it is the -- is it enough to keep investors happy? i'm emily chang, this is "bloomberg west." coming up, twitter announces plans to cut 300 jobs. twitter suspends the accounts of leading sports sites as the nfl complains about copyright violations. i will talk to the cofounder of postmates about the battle for
market share. intel's better-than-expected earnings, they reported $3.1 billion in net income for the third quarter. they showed strong demand for a data center chips. but not all good news, they are feeling the decline of the pcs. joining me now to take a deeper look at the earnings are editor at large cory johnson and alice. cory, you have been looking at the number of intel shares, what is a big take away? cory: it could've been worse. wall street was looking for the guidance to come down, it did not. this is very interesting, you can see everything we talk about on the show. all of the big changes in the world of technology, all taking place within these results. it is the shrinkage of traditional business and enterprise, pcs, desktops,
notebooks. and the growth in the data center and how that can yet -- connects with mobile. alex, what are you most optimistic about? alex: actually, we are not optimistic over intel. we did get off of our sell rating because we did suspect there was going to be better news. this is what this report was about, at least the hemorrhaging has stopped to a degree. data centers are still a good growth area, although they did miss the expectations. if you go into the results a little bit, the reason i think there is some concern worth noting is they cut, conventional wisdom when they're raising a it because they are optimistic about the future. the data center is missing or guidance for growth. the company still has not convinced us that it has a meaningful strategy to grow over time.
emily: you wonder what happens in companies start to choose external cloud providers. cory: i will get to a quote about data centers and a second. i think the data center business is their hope. they miss mobile in a lot of ways. the pc business -- they have been lucky to get pricing in that business. they are really putting a lot on this data center business getting better. let's listen to what stacy smith had to say. stacy smith: we saw solid quarter -- we beat our expectations. underneath that what we saw is continued strong growth in the data center, memory business, and the internet of things business that offset some of the weakness of the pc segment. pc segment came in a little better than we thought.
we are seeing units down this year, but the quarter was a little better than we thought. emily: intel ceo, stacy smith. they beat their own expectations. alex: they did not make what they set the expectations for, which is 15% growth. better than the 10% growth is slow to last quarter, sure, but not a very encouraging number. that really underpins the hope in the stock. what cory pointed out about data center kind of driving expectation. data center is the other side of the pc court. one of the reasons they are weak is because computing has just it to be cloud. people do not need pcs the same way. cory: they say they do not miss mobile, because every phone connects to a data center. alex: at the end of the day, computing is growing, intel is not. basically are offsetting pc losses with decent growth in data center.
when the data center misses, that sets off the alarm bells for investors. emily: what is the future look like for intel, in the future where dell and emc are together. cory: it is a big deal because it is a bet on the old world of -- every company would have to set up their own data center. they would have to have their own storage. they would have to have their own computing systems. the new model is very different. intel stands to benefit from both. the new model is all about the cloud. it is all about amazon. you can look at that merger as anti-amazon. intel is in a position to benefit from both. our guest yesterday said he was not optimistic about the prospect of dell anc taking
share. alex: nor would we be. the good news for intel is dell is a friend to intel. to the extent that they have some success and better scale through this, that should be a net positive. right now, the positive for intel is that as the cloud build s out to support all of these fortune 500s shifting to the cloud, investors have to asked themselves, what happenssk two years down the road with a don't need to spend more. cory: imagine this massive amounts of debt for dell, and in the face of these weak pc numbers coming out of intel, helped by price. who is, in their right mind thinking, i want to underwrite this new dell offering.
emily: cory, you said a lot of time with intel executives, how optimistic are you, about his leadership and what he has done so far. cory: that is a great question. i am impressed with the management team at intel. i think they recognize their future -- the writing is in their face. they have seen it for a while. the growth of their other businesses, their internet of things business, part of that is re-qualifying businesses. it is a meaningful business. i think they recognize they have to see the world many years out. alex: i think it is important to point out the problems they are seeing right now are inherited. they are putting new initiatives in place to try to offset that. whether they will be successful or not remains to be determined.
i think the honey more dust honeymoon defending. where the rubber hits the road is, can they get pcs to stop sliding. can they keep the arm based system to keep from encroaching. will the strategy work? it is a tricky thing when all of the exciting activity is happening outside of intel. emily: we are waiting for some new chips this fall. thank you so much. as the democratic candidates go head-to-head, rand paul is hoping a live stream will bring his presidential campaign back from the dead. the kentucky senator has been live streaming his entire day on facebook and news stream. recent polls show paul trailing badly. this is his first time he has tried to give his campaign buzz
with stumps he hopes will go viral. last month he shot a copy of the u.s. tax code with an assault rifle. in july he took to it with a wood chipper and chainsaw. coming up, twitter is cutting as much as 8 percent of their work force. the real shocker and how many employees found out they lost their jobs, next. twitter temporarily suspend the accounts of two top sports sites. ♪
emily: i want to tell you about a developing story, according to people familiar with the matter, the chipmaker has hired a bank and already received interest from two of its rivals, sandisk is in talks. any deal would add to what has been the biggest year ever for the semi conductor in na. to twitter and jack dorsey's first big move since being named permanent ceo. they plan to eliminate as many as 336 positions, or 8% of its global workforce. in a companywide e-mail to employees, he says the move is aimed at getting products out the door more quickly. this morning he also tweeted, made some tough but necessary decisions that enables twitter able to refocus and growth. employees took to twitter to
share the news, the bigger surprise is how they received it. quote, i have been impacted by twitter layouts, this is how i found out this morning. one engineer posted this. sarah frier, alex barinka, sarah, i want to start with you. the engineer wanted to follow up by saying he got a call personally, but found out through his e-mail first. he did not get to that message in time. what are you hearing from some of these people? sara: there are several people who said that is how they heard. to be fair, it is hard when you have employees working from home. you have to hope they pick up their phone. you have to tell them somehow so you do not find out from a password reset. emily: one of the problems we have been talking about is twitter and some of the
reporting that sarah has done is that a lot of people at twitter seem to have overlapping responsibilities. people came up through different regimes, some of them are working on the same things come slowing things down, what are you hearing about? sarah had a great story about the need for more urgency when it comes to redeveloping some of twitter's projects and getting out there quicker. we have seen moments come out recently. that is the thing where you can see relevant news, built for people who are not these power users. it has taken time. it has not been until dorsey came back that we saw some of these shifts. some of this overlap potential, bureaucracy deciding things by committee. these are things that get away from the start of roots. they can gum up the system and slow down the company. emily: the goal here is to ship
products more quickly, he talked about the vine and periscope. what will you be watching for? have we heard about any other overhauls? sara: moments give us a clue of what happens next. the ultimate goal is to get twitter to the mainstream. i think we will see periscope and vine integrated into mom -- moments. maybe we will see vines of nfl. things that bring in this mixed form of entertainment on twitter that lets people know what is going on. emily: i was enjoying moments over the weekend with the blue angels performing here in san francisco. they had video from inside the cockpit. pilots were tweeting. it was easier to see than usual. alex, you are the ipo reporter, your ear is to the ground, what are you hearing from your sources about now that jack dorsey is in the role, doing two
jobs, anything new? alex: i think it has been telling, square is trying to get themselves in order. they did file confidentially. when you look at what dorsey is doing right now, it is obvious twitter has been more of a problem child, given the conversation we're having. if i were an investor, you have to think, does he have his management team below him at square who can support the business throughout the roadshow process. those are the questions that will come out. emily, you will be the first to know. emily: thank you. jack dorsey, obviously trying to build and rebuild his team. sarah frier, and alex brink of bloomberg news, thank you. speaking of twitter, the nfl
temporarily sacked the twitter accounts of two leading sports site. they suspended sb nation and debts been after football conferences complained about copyright infringement. sports websites have been embedding highlights and other sports clips on their accounts for years. both professionally and amateur leagues have started pushing back for its part, the nfl says they did not request any specific accounts be offended. the league does have a content production deal with twitter. both of those accounts are now back. up next, post mates find two more big retailers. the ceo joins us to tell us he is not worried about competition. ♪
emily: i'm emily chang, and this is "bloomberg west." the publisher announced today that readers of germany's most popular online news site, build, must either turn on their ad blockers or pay a fee -- turn according to the company, ad blocking is currently a serious dilema for digital publishers. i asked the aol ceo about the
controversial issue. >> i think there is a big problem here. the fact that consumers are blocking ads is a signal to us that we have to include add content. that is one of the things we are doing is talking about how to we improve that experience. everyone will do that. emily: ad blocking cost publishers an estimate of $22 billion this year, according to page fair. one of the biggest disruptors paving the way and the sharing economy, post mates has been on a tear lately adding partnerships such as aaa, walgreens, and now etsy. competition is fierce. now amazon is joining. you made a number of announcements today. which of these will be the most transformative to the postmates business?
guest: we are excited about our api. we have an api that local merchants can integrate into their businesses. i think that brings us very close to our vision of helping local merchants compete with big-box retailers. emily: how does that work? guest: you can implement api into your website. that facilitates the entire transaction, and hopefully sends someone the goods you are selling within a few minutes. emily: i mentioned it earlier, but you have so many different companies competing in on-demand delivery, what gives you the edge? guest: there is competition. there are big and small players. i think we have a dedicated team.
i think we also have the popular vote. we have been doing this for four plus years. emily: amazon doesn't have the popular vote? guest: maybe in awareness, but we are trying to be there for the local merchants. we are trying to be different from amazon. emily: how? guest: we like global merchants to succeed. we do not want to build warehouses where it is easy to shift from, we want to take the city and use it as a warehouse. emily: i was recently speaking bill, he is very skeptical about the economics of businesses like yours. take a listen. bill: the more we get into this territory, the more optimistic we get about business models that are lower margin. it is like the last time that
all of this stuff happened was 1999. it's cosmo, it is the same -- this is -- the smartphone helps. emily: respond. guest: i think bill is right to a large extent. if companies are overvalued for the value they are bringing, we will have a problem. i think two things, postmates is valued at like uber. emily: why do the unit economics work? guest: we have had a profit margin that is positive for 3.5 years. maybe it is my german background, but the first order of business is to figure out if you have a path to profitability.
emily: you can be profitable in 2015? guest: by continuing the way we did in the past. we look at the unit economics, make sure you have a great mix of products and offerings from all sides. emily: can you give me numbers? guest: maybe a little higher, maybe lower, it depends. emily: i am a customer, i want you to succeed, i want my life to be easier, you make it easier. there have been a few times were something has been missing. it happened again last week. it was too much trouble to call and tell them -- it was the entrée. how you handle that? guest: the company is growing fast. taking care of the quality is my biggest worry. we have to make sure that we can
grow in a way that the quality remains at a very high standard. thankfully, most customers have great experiences. we know that we have customers that have subpar experiences. we also know what we need to do. part of the appeal is you can order from almost any place. that leads to a slightly higher error rate. more technology that translates orders better, that makes our fleet stronger, those are things that we are working on. emily: if it goes right, what does postmates become? guest: the greatest tool for local merchants. it becomes a beautiful app for you. it allows you to purchase things from your city that you can have in a few minutes. emily: the ceo of post mates. thank you for watching. ♪ >> the following is a paid
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