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tv   Bloomberg West  Bloomberg  October 14, 2015 8:30pm-9:01pm EDT

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what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. emily: square has filed publicly for an ipo just as jack dorsey juggles a revamp of twitter and brings on a new chairman. ♪ emily: i am emily chang and this is "bloomberg west." coming up, netflix mrs. analytics. isses analysts, blaming the new chip credit cards. is netflix close to crashing? and another merger might be in the works. more sales are said to be in
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talks. first, to our lead, the square ipo. the payments company filing for an initial public offering, looking to raise 200 and $75 million. se $275 million. that number is a placeholder and will probably change. jack dorsey is pulling double duty as ceo of square and twitter. he is trying to restructure the social media company. joining me now is alex barinka, , thell as brad stone bloomberg head of global technology. let's dive into the numbers. square is making money but it's not profitable. brad: growth is slow, which i was surprised to see. the starbucks partnership, wow. emily: can we talk about that? because that actually cost them money. brad: there is a long history of starbucks being a poor partner to technology. of course, groupon gave black
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marks to starbucks as well. not surprising, jack dorsey has talked about that being a bad deal. now we have evidence. emily: that is going away. if we cannot rely on starbucks, where is the growth going to come from? an interesting part of the filing was looking at the breakdown of how big the customers are. if you dig into the slides, customers bigger than $500,000 in revenue are growing. alex it looks like they are : trying to move into a bigger ballpark, let's say, of customers. instead of just the small merchants that you typically think of as typical users of square. so you would expect that would be one of the areas they are moving into. and the notoriety of being a public company might help with that. as some of their competitors are out big in the space as well.
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first data being one of them. emily: i do want to talk to you, brad, about the risk factor and the fact that jack dorsey is the ceo of twitter. this may at times adversely affect his ability to devote time, attention, and effort to square. what do you make of it? brad: of course. that is a risk. emily: he doesn't talk about it in his letter, interestingly enough. he actually doesn't mention twitter at all. alex, what do you think about the fact that he is running both companies, and what are you hearing from investors? alex: they going to want to see him on the roadshow. you know, he has been the face of the company. and as they go through the process and as they are pitching, that is one of the things they will pay attention to. we just put out the news across the wire, first data actually in below range.
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you can see that investors are may be taking positive in this payment space. as he is dealing with the problem child that is twitter and managing job cuts at that social media company, i think people are really going to want to see that he has a strong management team and that he has the right ingredients in place to take care of this company as well. emily: early this morning we got some news out of twitter. jack dorsey brought on the longtime head of business at google. as executive chairman. he is taking on a more operational role. he is actually going to show up to work sometimes. and i want to bring in josh ellman, a partner at greylock who worked at twitter for a time. josh, what is your take on omid joining twitter question mark what does he bring to the company and to jack dorsey in particular? josh: he was involved in so many of google's core decisions to grow the entire company.
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i think omid is going to be a steady hand, how you manage the public market, the shareholders, investors, and how you keep driving innovation. he really helped jack start up the innovation engine. as they get it going forward at twitter. emily: what do you make of the fact that he has only tweeted like a dozen times ever? i mean does that matter or is he , an example of the kind of person twitter is trying to reach, people who have tried it but have not really stuck around. josh: people have said you don't need to tweet to use twitter. i firmly believe that twitter can be an amazing source of news if you set it up right. to me, even if he hasn't really been a twitter user so far, he is such an incredible thinker.
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like, if you are going to debate how they became a much better product in business, i think that is silly. emily: obviously, we know that twitter has some challenges ahead. we have seen that square has filed publicly for an ipo. the fact that jack dorsey has two big jobs and that's listed in the risk factors section. what is your take on the fact that jack is going to be doing both of these jobs at once? josh: there are two schools of thought. you know you never ask someone , with more than one child how to you care for both of your children? like you clearly care deeply for each of your children. i think jack is in that position. the key to the measure of success is whether he has excellent teams around him at both companies. obviously, adding omid's influence can only help twitter. emily: what is your take on the new products that have been unveiled so far? what do you think of twitter moments? can it be the future of twitter, and what other products would
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you like to see? josh: moments opens the eye to what twitter can be. it isn't just streams of water 40 characters. i think that part is incredible. i still think what twitter needs to do is figure out how to help everybody express their interests more simply. what technology do you like? what sports teams do you like? what news are you following? and then deliver those in a more timely way in and in gauging the kind of format that can be curated and made more excellent. emily: brad, you have been covering google for a long time. omid on in ag m management role, how much more manageable does bringing omid on make this task for jack dorsey? brad: what does jack need in his corner? the history of twitter is ceo's coming and going, alliances
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being formed, people losing their jobs. it happened to jack already. the role of the board is to hire and fire the ceo. and to make sure the corporate governance is on track. emily: and they have. brad: that's right. i think we are going to see more and more members in jack's corner to make them feel secure and give him the runway two, not only as josh says to fix the core product, but maybe in the facebook mold to give them a syndicate to build internally some other properties to reach that billion users that really haven't found the court twitter app to be appealing. emily: we are going to continue digging through the square filing which we just got about an hour ago. obviously, we will keep talking about twitter. brad stone, our bloomberg global tech editor, alex barinka, who covers ipos for us, and josh greylock on the phone. thank you for joining us. now in other news, shares of first data are set at $16 apiece, below the $18 that was
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expected. be causing company is set to the largest ipo the year. coming up, netflix shares take a dive. the company blaming credit cards, but is it losing momentum? ♪
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emily: netflix shares take a hit in after-hours trading. they have recovered a bit now.
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investors are reevaluating the stock after reed hastings video streaming service missed on several key fronts. 880,000 newed domestic subscribers. analysts have been looking for $1.25 million in profit. joining me now here in the studio for reaction is managing director neil doshi. also joining me to talk about original content in the space is the ceo of vimeo, kerry trainor. neil, i want to start with you. netflix is blaming credit cards. what is going on? is that all? neil: people have not renewed their credit cards and automatically subscriptions are dropping off. that might be part of the reason. you did not have a great title slate. especially in the third quarter.
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i think people are also reevaluating whether they want to sign up for netflix again. it may be season by season or show by show. some people might sign up during "orange is the new black" or "house of cards" and drop off later. emily: i am watching "narcos" and i think it is great. do you think the content is just not as good? neil: "narcos" is doing well, as is "daredevil." emily: "bloodline." neil: netflix said they might be getting into news next year. we will see how their original movies do as well. emily: kerry, you guys are just starting to get into original content. you had a very successful original series, "high maintenance." a got picked up by hbo. can you lay out how you see
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yourselves positioned in a world where there is also netflix, amazon studios, and the hbo's of the world? kerry certainly, the most : exciting thing vimeo provides is a platform to upload your own work. it's an open platform for any creator to use and any viewer to access on any device. similar to what you see in the premium world, it's almost like the open global version of broadcast television. vimeo is the global equivalent where any creator can use it to sell at free content. and "high maintenance" was our first original series where we are investing in individual creators who we think are coming from a very different world than what netflix is providing. which is great content, still very traditional.
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"high maintenance" is creators who found their way to an audience through vimeo and we are supporting them. emily: original content is expensive, and netflix is spending billions of dollars to make the shows. just how much is netflix spending and how concerned are you that they will be able to make up for it? neil: they are spending $5 billion-$6 billion and they are raising debt to fund the spend. and i think they were raised that on a regular basis to fund their original content. it is very expensive. competition is heating up. so far, i think they have managed their portfolio fairly well. we will see how they do over the next 12 months. emily: kerry, how costly as it for you guys to compete in original content? i mean, i'm sure you're not spending $6 billion. but how much are you spending to make this idea a reality? kerry: the key, again, for us is that we are focused on a very different tranche of the market.
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so the orders of magnitude are quite different for the content magnitude. however, we do believe there is a global community of high quality creators who can access their audiences directly, and we already have thousands of settlers on the on-demand system selling tens of thousands of pieces of content, and we will have over a million purchases of those content. so while we expect in the year ahead to be investing in the eight figure range as opposed to multiple billions, for us to highlight, support, and show to the world and viewers out there that this tranche of content exist, we are very excited about what we have coming up. emily: i do want to ask about some of your efforts. you said it will take a year for your next original series to be available. why will it take that long, and will the first slate of originals you have planned be enough to bring in new customers? kerry: yes, they will be premiering next year, but they
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will not be taking a year. we have three series, a short film, and a comedy special. the first will come out in december, the comedy special. then the next will be coming out in the first quarter of next year. so they are actually going to be coming out in the next 5-6 months, and we expect to be rolling them out in more frequent succession after that. emily: quickly, neil, what is your outlook for netflix given the new information we have gotten today? neil: this is a company that has been executing on a number of fronts. they will take a couple of hits sometimes when they enter new markets. as we look at 2016, it will be a little more challenging. they are going to look at markets they haven't been in. some of them are in asia. very different mindset, very different business model potentials. i think there could be more
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volatility as we move into next year. emily: thank you both. now, another stock we are watching today is maxim integrated products. shares of the semiconductor company jumping 10% on news that it is impossible talks for a possible merger with analog devices. this was prompted by rising costs and a shrinking customer base. they were working on a strategic review when analog approach did about a strategic merger. there is more change brewing in the semiconductor industry. fairchild international has hired goldman sachs to help it find a buyer. the company is in discussion itros.otential su ors. fairchild surged almost 16% at the close. up next, genetic testing startup 23 and me gets funding.
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$115 million. we sit down with president andy page in an exclusive interview. ♪
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emily: bloomberg is getting serious about the delivery business. uber rush is moving to san francisco and chicago. it was previously a pilot program in new york. for retailers to deliver products to consumers. the company said today that rush is no longer an experiment. while the delivery space is crowded, critics have long said uber has the potential to wipe out the competition.
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here is lowercase capital and uber investor explaining it to me in june. >> i did not invest in ship, because i think it is something uber can and will do. i think travis' ambition is boundless and his ability to execute is unlimited. hady: just yesterday, we chris sacca on the show. and he said investors should not count them out just yet. bastian: we have had a profit margin almost since we launched, for three and a half to four years now. in germany in the business school, the first order of business is to figure out if you have a profitable business or can have one. emily: you will be profitable in 2016? bastian: yes. emily: check out the full
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interview at bloomberg.com. now to 23 and me, the genetic testing company, just raised million in funding led by fidelity. the plan is to use that to expand its new drug discovery arm, which the company set up in march. now under the leadership of a former genentech veteran. according to a person close to the company, this round of a valuation of $1.1 billion. joining me now from mountain view for an exclusive interview, andy page, president of 23 and me. andy thank you for joining us. , a lot has changed since you and the fda had a bit of a standoff over what 23 and me should and should not be doing. so tell me what does 23 and me , do today and what will it do in the future?
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how does this change your vision for the company? andy: post fda warning letter, we no longer sold our health reports in the united states. we will be relaunching imminently our status reports. but really a whole new customer experience. the entire site has been redeveloped and redesigned. so it's a very exciting development for the company. emily: if i customer, what can i get if i come to you? if it's not a dna test or an ancestry test, what will i get? andy: if you were to come today, you would receive ancestry. if you were to come after we launch, you would get ancestry, but also traits about yourself and fun information as well as health reports under what is called the carrier status. there is a tremendous amount of information and the whole site is designed around sharing with
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your friends and relatives. the adopted community has really embraced the community. it's an entirely new experience for consumers. emily: tell me about the work you are doing with in-house drug invention. what diseases or what areas are you focused on? andy: richard and robert came from genentech to lead our effort. and so they are using the world's largest database, with over a million people in it, 900 ,000 have consented to research. they are using all the information we get from consumers who engage in research and answer questions. but also the phenotypic data. the combination is a unique resource to drive drug discovery. we have a broad mandate, and we are extremely pleased with how it has gone so far, faster than we would have anticipated.
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as a result, one of the uses of proceeds from the round you mentioned earlier, is to build a lab that supports our efforts. emily: are you planning to seek out a big pharma partner or to do human testing yourself? andy: we already have external partners we announced earlier with pfizer and genentech. it will be a combination of in-house efforts and partnership with third parties. we have not announced how early and often we will be partnering, but we anticipate partnerships along the way. so in some cases, we may take the drugs fairly far along. in other cases, it may make more sense from a research perspective to partner. emily: interesting. andy page, president of 23 and me. thank you so much for joining us today and sharing your vision. that does it for this busy edition of "bloomberg west." thank you for watching. we have former facebook ceo on
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♪ >> from our studios in new york city, this is "charlie rose." he has been president of mongolia since he previously 2009. served as prime minister in 1998 and again from 2004 and 2006. he's considered one of the principal architects of democracy in his country. he was one of the leaders of the 1990 revolution that ended 70 years of communist ruling and co-drafted the countries 1992 constitution. this year marks the 25th anniversary of mongolia's transition to democracy. therefore i am pleased to have the president at this table for the first time.

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