tv Bloomberg West Bloomberg October 26, 2015 11:30pm-12:01am EDT
emily: tech investors gear up for another crucial week of earnings with apple, twitter, and alibaba preparing to give results. ♪ emily: i am emily chang. this is "bloomberg west". coming up, oracle ceo larry ellison takes a swing at ibm and sap. he pushes deeper into the cloud. plus a hail mary or solid game plan? yahoo! live streams the first nfl game ever. we break down the numbers. microsoft throws down the gauntlet, opening its first blocksstore just a few
-- blocks away from apple's flagship store. first, to our lead. another wild week of earnings. kicking things off, third-quarter results from iac. the company best known for wayng tender and match.com ahead of estimates of $.78 per share. iac is extending an ad deal with google that would generate $4 billion in revenue. tomorrow is one of the biggest days of the quarter. first up is alibaba. investors watching for signs of growth as performance is so closely tied with the chinese economy. the stock has been pummeled since november ipo, but has seen some recovery over the last month, leading some wonder if the worst is over. later, twitter and apple. apple, how well the iphone 6 is
doing. apple shares taking a hit today after a supplier posted weak sales. joining me from new york and here in the studio, tim o'reilly of o'reilly media. you have followed all these companies for so many years. what are you going to be watching for tomorrow? we know this is an iphone company. what are we expecting? >> the biggest thing you have to look for in apple's results is what they say about the following quarter. the quarter that is passed, not as big of a deal, not as sexy, but how big do they expect demand for the iphone into the holiday quarter. as you pointed out there was a , bit of a bearish signal, 80% of its sales from apple, dialog semiconductor putting out a forecast below expectations.
it dragged down apple because it made people wonder how bad it will get for apple. emily: tim do you think that , apple is over dependent on the iphone? how bullish are you about the watch, tv, maybe a car? >> overall you have to put all , this in perspective. yes, apple is super dependent on the iphone, but they are an innovative. technology is penetrating more and more into our lives. i think there is a opportunity still for the smartphone to reach billions more people. even if there is a short-term pickup i wouldn't be betting too , hard against them. emily: you said silicon valley is underestimating the power of the internet of things. do you think apple is positioned well there? is apple playing a little bit of catch-up? >> i think everyone is playing catch-up. we don't know what the killer business model is. or if we do, we don't recognize it. i have been making the case that the most successful internet of
things application is uber. as an don't think of it internet of things application because it doesn't have a dedicated device. what uber teaches us is that when you completely rethink how to deliver a service because you have sensors connectivity, that , is when you win. if you look at the long game on the apple watch, a lot of it is moving into health monitoring and things like that. you start thinking about, wow, we are starting to get to the question of how are we going to rethink the health care market. that is a huge market. emily: apple has a huge position in china. alibaba reporting results tomorrow. tom, what are we watching with alibaba tomorrow? obviously we know the stock has plummeted since the ipo, but it has regained a lot of that back. is the worst over for alibaba? >> yes, analysts are
increasingly optimistic about what we will see from alibaba tomorrow. at least for analysts -- four analysts have been upping their numbers. the stock earlier in the year did get pummeled, but in the last month that stock has been up 33%, so there is more optimism for what they're going to do. jack ma has been changing the way they are doing things, mixing things up, adding to entertainment offerings. they are giving people more things to do at the alibaba site. he is also reaching out to merchants more and more. you're seeing some changes there he is making. a lot of people looking at that and saying that we are a lot more optimistic about where alibaba goes from here. emily: tim, how much will alibaba they tell us what is going on in china really? and ultimately what's going on with apple? >> in some ways, alibaba is a pretty good proxy for the areese market because they
so well represented across different parts of the economy. i think that we may get some insight from their numbers. i think the apple store is much more specific one. we don't really have insight into how much of the iphone 6s rollout numbers were coming from china, and we will now see that. that will tell us more about the u.s. than china. emily: what about alibaba's investment strategy? about are hearing potential investment in magically pharmaceuticals, movie , studios, and the youtube of china. do you think that they going to give any clarity on the strategy here? >> they have made it clear that you will see more investment overseen to the tune of billions of dollars. i think that is something you will get more insight into. remember, they have to hold the attention of the users of alibaba. it is the world's biggest internet market.
you want to get them to the site, keep them at the site, and that's why you're seeing bigger investments in the youtube of china. emily: tom giles, our executive editor of bloomberg news, thank you for joining us. i know you will be all over those earnings tomorrow. tim o'reilly, you are sticking with me throughout the show. i do want to talk about oracle. larry ellison speaking at oracle open world saying the company will continue to push into cloud computing. according to oracle's chairman leadership in the industry is up , for grabs, but there are certain companies he's not worried about. >> our two biggest competitors, the two companies we watch most closely over the last two decades have been ibm and sap, and we no longer pay any attention to either one of them. emily: larry ellison always has to throw a few punches at oracle open world.
he says his biggest competitors are microsoft and amazon. do you think oracle is too late to the cloud here? >> in some ways i do, and it's not because -- not just a matter of being late. it is a matter of how they got the right business model. they fundamentally have the same business model. they do not have the same business model as amazon or microsoft is crafting. emily: maybe it's better? >> i think ultimately the cloud teaches us that we can move more quickly at lower cost with a flexible pay-as-you-go business model. that is not oracle's strong suit. they are going into a market that could be a bloodbath for them. emily: it could be a bloodbath. i like that. strong words. tim o'reilly with me for the entire show. coming up, yahoo! says its first ever live stream of an nfl game was a great success. how many people actually tuned in? we dig into the numbers next. ♪
emily: new problems for blood testing firm theranos. walgreens has decided to hold off on opening more testing centers. it made the decision after reports worsening the technology. it is there biggest business partner. walgreen officials met with executives, including the founder, late last week. walgreen's now plans to wait until questions are resolved before continuing with its expansion plans. now to yahoo! and first live
streaming game of nfl game ever. over 15.2 million unique viewers tuned in to watch the game on sunday. in total yahoo! says over 15 , million unique viewers watched the game online. bloomberg crunched the numbers and found that only an average of 2.4 million viewers tuned in any given minute over the course of the three-hour game. by comparison, sunday night football averages 24.1 million viewers according to nielsen , data. joining me is the ceo of a video streaming company. also with me still is tim o'reilly, founder of o'reilly media. i was at the very first nfl game miami dolphinsn, versus the new york giants. is 2015, why is it taking so long for the nfl to find a partner to stream a game
live? >> businesses are conservative. they often don't act until too late, particularly when technology is changing the rules of the game. i think -- i don't have insight into the minds of the owners, but i would suspect that they just have not done the math correctly yet. the future happens slowly, and then all at once. emily: yahoo! is saying 15 million unique viewers. we are cut giving two point? 2.4. are calculating is that a success. the cnn debate had one million on average. >> it is a success. some others have been in that one million to 2 million range.
what has been currently happening is an upper trend of people watching online. television viewership tells a different story. emily: there were some questions about the quality of the stream. i saw a few tweets regarding that. nfl yahoo! streaming fail. still buffers and freezes, leave football to the networks was one , comment. >> it is different when comcast laser fiber to your house. the internet is not structured like that. you are dealing with lots of different partners. increasingly, technology is improving and the experience is now better with four k possible over the internet. emily: let's talk about the future of yahoo!. this is a big when broadly for them. i think we can say that. yahoo! has been so dominated by the alibaba spinoff. once that is gone, tim, as a person who has covered yahoo! since the early 1990's, before yahoo! existed, what does yahoo!
become? what is left after alibaba is gone? >> a lot for any company and their position depends on their boldness. are they willing to reinvent themselves? emily: you see that happening? >> i think there are opportunities. take the streaming example. i made the example earlier about uber reinventing the taxicab business. what would it take -- there are things you can do with the internet you could never do with broadcast media. >> you have to deal with rights, the league, and -- >> that may be a challenge. imagine for example people following along on twitter. what if you could follow along in real-time live with video commentary? you are saying from emmitt smith. >> look at what major league baseball is doing on the internet, they have a subscription product, not free.
emily: they are doing pretty well. >> they are doing fantastic. it is a different business model. you get insight to the stats and data and what is happening around the gameplay. the example we talked about in the green room is imagine you could watch the dallas cowboys with emmett smith. the technology is here. they could be an additional revenue stream. >> really anyone could be the one to pull it off that they -- off if they have the guts to do it. emily: all right, thank you. tim o'reilly, you are sticking with me. another story we are watching, the movie people are not watching, steve jobs generated just a third of what analysts predicted it would make this weekend when it opened to a wider audience. rather than dominating the box office the film came in at , number seven, the latest hurdle in what has been a troubled production, executives
khosla will remain an advisor to the board. the filing says it comes as no surprise that, "he has expressed his desire to step down from the board of directors immediately prior to our ipo." it is not entirely unusual for vcs to scale back their role as the company becomes public. on to microsoft, over the last 14 years, consumers have spent $4.6 billion on halo-themed products. leading the charge is xbox. the corporate vice president at microsoft. she is profiled in this week's bloomberg businessweek cover story. i asked her about sales compared compared to the previous model. >> it is a misnomer that sales are down with xbox with the 360, one. we have sold more, so it is a very healthy ecosystem. with halo is a groundbreaking five, halo game that is taking halo in an iconic and new
direction for the game. emily: how much do you worry about keeping halo fresh with all the competition out there? what is your number one priority about keeping this the game that everyone wants to play? >> i think that halo has a huge fan base. we have a story fan base. we have multiplayer fan base, single-story fan base, so it is our job to push the story forward for the story fans and continue to innovate on multiplayer. we have a lot of feedback. there is an iconic feeling for halo multiplayer. we took that feedback with halo five. there is something for everyone, competitive arena mode, harkening back to true competitive halo, and then with halo war zone we have something , for everyone. it is a huge 24 person player versus player, play versus everything, it is an epic sci-fi battle. with halo five we are trying to hit something for everyone.
i think it is halo, but it is definitely pushing it in a new direction. emily: how much do you play yourself? >> right now, a ton. it is all i am playing. it is, in my opinion, it is the best halo we have ever put out. we play. halo is one of my favorite games. i do play it a lot. i play other games with my kids but i love halo. of two boys who i am sure will want to play a lot of video games. what are your policies and approaches as a parent in terms of the amount game-playtime and making sure they are doing other things as well? >> i think every parent has their own value system. the most important thing is kids are going to play games. i think it is something that as a parent you should do with your kids so that you are there to answer questions and help them navigate what you think is appropriate and not appropriate for them. my kids and i play a lot of
gaming together. emily: the ceo of microsoft with -- was the first to go to e3 and see your presentation of his new halo game. how active and interested has he been in the game itself? >> i think we are in a new space with him and the company. he is pushing a culture to focus on the consumer. we are making sure we buildings that the light the consumers. he has a huge interest in gaming because we think differently about when someone doesn't need you, they have to want you. you really think about the consumer and what they want. emily: spending on home console hardware in march of this year had dropped by 29%. how do you see the console in the gaming landscape of the future? how does that affect the way you develop this game? >> i think that one of the things that we just published in
our earnings is that for us users and games, xbox live, 20% increase largely due to xbox one. we feel like there is a healthy gaming console ecosystem, but when you look at everything, there is a huge windows gaming space, mobile gaming space, so for us it is about serving the gamer. with halo five, we are really focused on making sure that living room experience is amazing with xbox one. emily: you have had some technical challenges with halo master chief last year. how do you intend to win back some fans who may have been a bit disappointed with that? >> we did a beta for halo five a year early. the intent was to get feedback on gameplay, but due to some of the issues with the master chief collection, we used that time to focus and make sure that we have the full infrastructure to ensure that we would stand out. it was a hard lesson, but i think that halo five benefited.
i look forward to everyone getting online tonight and tomorrow, and i think we have an incredibly strong infrastructure. emily: bonnie ross, corporate vice president at microsoft. we will be watching halo five as it goes out tomorrow. still with me is tim o'reilly of o'reilly media. i want to talk you about your big conference coming up the second week of november. you have great guests, but some other people on the list, but how do all of these people relate to each other? what do they have to do with one another? >> everyone is wrestling with the impact of technology on the structure of the economy and the nature of work, and this is a time for us to figure out how you take advantage of disruptive technology, how do traditional companies do this rather being steamrolled by the technology
and how do we as a society come , to grips with all the changes of the on demand economy, artificial intelligence, robotics, increasingly affecting jobs and company structure? this starts by understanding what these disruptors are doing, what policymakers are doing to respond and how we think about , the future. how we build the economy we want rather than have it come at us and we don't know what to do. emily: what is the one take away that you want attendees to leave with? >> i want people to understand that what is coming at us is a -- is bigger than the original internet, and they need to understand and get on board and need to figure out how to transform their business. emily: tim o'reilly, founder of o'reilly media. it sounds exciting. thank you for joining us on the show today. good luck with your conference. that does it for "bloomberg west" today. tomorrow on the show we will be all over alibaba, apple, and