tv Bloomberg West Bloomberg November 23, 2015 11:00pm-12:01am EST
emily: it's new here in hong kong. we have an update of the top stories. retail stocks pulling asia down as pressure on industrial metals pushes copper and nickel to their lowest in years. a five day climb was snapped while chinese shares are on the retreat in hong kong. asian energy and material stocks are down 13% this year. sharpe has had the biggest three-day gain in years. the bank may forgive the debt strapped company's loans. sharpe has seen almost $10 billion in losses over the last four years. china has sent an antigraft inspector to the shanghai headquarters a day after the
hong kong office said the c.e.o. is missing. the company has not been able to contact the c.e.o. since last wednesday. shares have recovered slightly after the 12% plunge on monday. let's look at the markets for you. hong kong and china currently losed for lunch. we saw a broader sell off in the region today but over there singapore, tokyo, and to be looking fractionally lower we are seeing the stocks tum falling on tumbling commodity prices. back in half an hour. time now for "bloomberg west."
i'm emily chang. this is bloomberg west. coming up, taking a page out of playbook, in talks to buy a stake in one of asia's most venerable newspapers. plus high speed internet access means no day of rest for holiday shoppers. walmart moves the start of cyber monday to sunday. and the two companies that once made up hewlett-packard set to report their first stand alone results tomorrow. we'll preview the numbers for th hp enterprise and hp inc. first to our lead. alibaba's founder in talks to buy a stake in the publisher of the south china morning post a hong kong based english newspaper according to people familiar with the matter. if the deal goes through he would be following in the foot steps of other tech executives getting involved in media businesses. amazon's jeff bezos of course bought "the washington post" in 2013 and chris hughes the facebook cofounder who bought a majority stake in the new republic in 2012. i asked jack ma about this when
i traveled to beijing earlier his month. >> i'm interested in many things but i have to care for may shareholders and our strategy. >> would something like that make sense? >> well, yes. a hink media, we invest in lot of online medias. u see, we also invest in -- tional business like people say, well, internet, the offline retailer business, together we rk can do better. if it can be better -- for the media the same thing. we think this might be very interesting to help for us to understand them, for them to understand us. we just want to set examples
and also for us we need media to help our small, medium sized companies to promote and, by the way, our advertisement dollars, huge, we gather from small business could help the media and media definitely using our data can tell the economy in an accurate way. >> so are you going to buy the south china morning post? >> i did not say that. i'm watching a lot of companies now. >> all right. so that was a couple weeks ago. why does jack ma want to get into the newspaper business and how does this fit into alibaba's overall strategy? joining us now to discuss, our guests. by the way, guys, south china morning post is like the flagship english language newspaper in hong kong. a bit of a separatist from the mainland in terms of political
leaning. so, tom, first i'll start with you. what do we know about this? >> well, as we are -- our colleagues in asia have pointed out there are discussions. they are in an advanced stage. there are discussions of buying some kind of a stake. we don't know exactly what the financial terms are. but, you know, as ma explained in his interview, there's a lot of different ways that you can slice this. like jeff bezos and his investment in "the washington post" jack ma has been a real disrupter of the internet so this is an opportunity for him to bring some of that mojo he brought to e-commerce in china to a publication that has over the last several years not done as well financially suffering some of the same issues, some of the same disruptions. that has so messed with magazines and newspapers here in the u.s. emily: it is interesting given the political significance.
unlike the united states alibaba has a very tight relationship with the chinese government. it is a necessity of doing business whereas the media and south china morning post specifically have positioned themselves as an outsider with regard to the government. what do you make of that sort of complication? >> that is a good point. congrats to you by the way for having that twitter you got earlier on this exact topic. i don't think it's easy to answer that question. i don't think jack ma should be viewed as in the pocket of the chinese government. he would like to be seen as autonomous but as you point out in reality you can't be a successful business of that scale without a lot of nodding acceptance at a minimum and probably active participation of the government. but it is interesting. this is a luxury product from the standpoint of media. this is kind of like "the washington post" of the region. so if you want to -- from jack's point of view somebody who wants to get into like the highest status product, this is the place to go.
if i want a hong kong reader of the paper, i would have serious reservations about it being controlled by a chinese national though if you're going to have chinese national control it, probably jack ma would be about as independent a thinker as any business person in china could be. emily: what do you make of this given the e-commerce angle? you are very focused on e-commerce but he is saying having a newspaper could help our businesses. >> well, it seems like every tech mogul needs to own a newspaper. emily: right. >> apart from that i think this is obviously coming together, media meets commerce. they are all coming together just as online and off line are coming together. if you own a media outlet with a substantial reach in the audience, obviously you can use it for your purposes as well. every media mogul will say we won't do that. emily: exactly. doesn't that defeat the purpose of being a stand alone media entity in the first place >> put it this way. it will not hurt them to own that.
and i think there are some personal pieces in this as well. i'm pretty sure bezos didn't necessarily have only business reasons to buy "the washington post." there was probably also some personal interest. i wouldn't be surprise fd that was also the case here. emily: ali babay has done $13 billion in deals so far this year from media companies to pharmaceutical companies to a soccer league. i spoke with mike evans who is in charge of global expansion for alibaba and asked him about the m & a strategy in particular. how do we make sense of some of these choices. take a listen to what he had to say. >> in this sector, e-commerce, where we're approaching close to 400 million consumers, the consumer desires are changing dramatically. a big part of our strategy particularly domestically means we have to be positioned with the right investments and assets to satisfy that demand.
emily: tom, how might alibaba use this investment to satisfy domestic consumer demand? >> to the extent as ma said in his interview you might be able to find ways to benefit your small to medium sized businesses that do business on alibaba. i'm not sure exactly how he plans to do that. he real key hear as we've been alluding, scmp is so highly regarded, you and i have been looking at this region for years. very venerable newspaper. they're going to have to go to great lengths to ensure that they remain, keep this independent reputation they have had vis-a-vis mainland china, really it's a global newspaper in many ways. we look to it from far away for this kind of authoritative voice on a lot of business issues there. so they'll have to work really, really hard and you don't want a situation where it is
starting to feel as though ma is turning this into a vehicle that is supportive of any particular point of view or any particular business strategy. emily: now, at the same time alibaba and "the wall street journal" is reporting that alibaba is now shopping its stake in basically a version of group on/yelp, a company that sells movie tickets, they do restaurant bookings. at the same time one of alibaba's big competitors is trying to nail down a stake in this company. what do you make of that? >> basically, this is a decision to separate the assets from the ten cent world. they're building their own competitor. it's basically a food delivery platform which is part of the whole online-to-offline world. essentially alibaba is saying why should i own a 7% stake in something where one of my top two competitors is also holding a stake. why would i want to be in that rather than control my own destiny, build my own world,
and actually compete like crazy in the market against that player they're currently holding a stake in. they are saying let me get out of this thing, control my world, and then we're going to go head to head in this. they have an uphill battle there because of the market leader but alibaba pretty much knows how to do online to offline commerce. they've done it before. they also own ali pay the largest payment platform that is independent in china. in addition they have their shopping app in china. all of these things combined and then owning or building their own competitor, that is a good strategy and pretty interesting. they've already put a billion dollars into that joint venture. this will be their ticket to freedom to fully compete. emily: i like that. okay. you're sticking around with us as well as david kirkpatrick to talk a little bit about cyber monday or black november as we're now calling it.
tom giles, thanks so much for joining us today from new york. now a new report details today the impact of china's continuing economic shift. according to the london basic accounting form uhy international the number of start-ups in china nearly doubled from 2010 to 2014. the country has been pushing to develop a consumer services economy from one fueled by exports and manufacturing to help with that transformation. the chinese government has provided subsidies and financing to promote internet and technology innovation. since 2010 there have been over 1.6 million start-ups with 4,000 new businesses launching every day. coming up, one of the biggest retailers is moving its cyber monday deals to sunday. we'll tell you who after the break. and after a disappointing earnings report can the holiday shopping season save game stop or will the retailer go the way of blockbuster video and radio shack? that's next.
emily: a stock we are watching falling as much as 16% in today's trading. the largest video game retailer posting earnings and a forecast that missed estimates even with the holidays approaching. the company saying on an earnings call that sales of the highly anticipated ea game star wars battle front fell short of expectations. gamestop is also hurting from gamers' move to both mobile games and digital downloads. well, walmart is pushing cyber monday back to sunday. all 2,000 of walmart's deals will go live on the website at 8:00 p.m. eastern this sunday evening running into the next day and what the retailer is calling cyber week. this decision is part of a larger trend, black november so to speak, with retailers big and small rolling out the sales
before the friday after thanksgiving. here with me to discuss more and how the e-commerce landscape is changing, the c.e.o. of shopkick ks david kirkpatrick and you'll be with us throughout the show. i mean, is it black november? i mean now i've been buying things for the last three weeks. >> it is definitely black thursday and black wednesday and very soon it will be black october. the problem with all of this is that it is actually red november. because all these deals are so much discounting everything that from the bottom line of the retailer it doesn't look very good. emily: so literally every day 50% off at j. crew. 50% off at gap. how can any of these companies be making money? >> that is the big problem. many of these retailers are saying we have to get this discount business and stop discounting. then you walk nah their stores and it says 40% off and something is not right. and then black friday comes along and it's 60% off. in some cases half of it. and it was all this, some new
strategies need to emerge. we need something new. >> david, have you been shopping all month like i have or are you waiting for black friday and cyber monday? >> not shopping as much lately. obviously with the warm weather a lot of apparel retailers have definitely been feeling a serious hit from a lack of clothing sales that would normally accompany getting cold weather toward the winter. i think every monday is increasingly cyber monday for an increasing number of americans. you know, it's actually if you look at the statistics for what's called cyber monday, the numbers of the dollar amount of shopping has gone up dramatically year after year. but it's still amazing to me how little commerce is still happening online considering the kind of convenience and deals and the efficiency that has emerged in our economy around there. so i tng's logical for walmart to be pushing this really hard especially since amazon has come up their tail pipes so hard. emily: amazon actually started a countdown to black friday sales starting november first
but this point david brings up about the shift not happening fast enough is something you know a lot about. shopkick is focused onion line to offline. offline to online. >> that's right. 92% of all sales, retail sales in america are happening in the bricks and mortar stores. but interestingly enough -- emily: that is shocking. >> it is. you would think it's the opposite. it is 92% offlane. out of that half of it which is by the way 2.9 trillion dollars is the total, all of that, 1.4 trillion influenced by previous online activity, you go online, check out a product then you end up buying it in the bricks and mortar store. so with that, mobile comes into play. mobile is the one interactive platform you got with you when you're in the physical bricks and mortar place and you can influence that. so one of the things we did at shop kick was say what if we could actually replace 30% discount with a 30 cent reward and achieve the same behavioral change? most retailers thought we were
crazy. emily: right. spend more not less. >> exactly. we came back and tried it with macy's and best buy back then four years ago and it turned out it is actually true. with all of this technology that you can drive people to the store with just 30 cents we are driving close to a billion dollars in sales this year through this mechanism. emily: interesting. now overnight apple changed their phone billboards in san francisco to apple tv. we actually got some video of that. i'm assuming, david, that the apple tv is going to be one of the hot items this holiday season. what do you think? >> people seem to be excited about it. it's great to have you here talking about retail. shopkick is beautifully positioned for this transition where we are trying to get convenience that is both in the physical world and the virtual world. now, in a way you could say apple tv is an example of the same trend because it is trying to bring together the
traditional tv experience with the convenience and universal choice we've had from the internet. so this is kind of the big story about commerce generally which really is applying to a lot of the stories we're discussing here tonight. that is that the virtual and physical worlds have to come together because that's the way e all actually live. emily: apple to me is not compatible to 4k. what do you think? >> it's still a cool product. i think it is going to be a hot seller under the christmas tree this year. and a lot of people are going to go for it. because it is finally the new interface that everybody has been waiting for for many years. you remember steve jobs famously said it's a hobby. well, now it turns into a business and we'll probably find out after the holidays if that's the case. emily: i'm going to buy one. i know that. i'm ready for my upgrade. okay. hopefully my husband isn't watching this particular show. he just gets the bill.
okay. thanks so much for joining us. david, you are with me throughout the show. thank you so much. activist investor karl icahn has another target in his sight. filings show they've taken shares in xerox, shares surging after hours. icahn is set to ask for a meeting with ursula burns and xerox's board of directors. he is one of wall street's best known activists, investors, often taking stakes in companies he bleambs are under valued. just last week we reported icahn swapped a large position in yee bay for 46 million shares of paypal. coming up rnings fizer is going to announce the largest merger ever in the drug sector but is it bad medicine for innovation? later a multi math science project in the heart of one of the driest deserts on earth. we'll tell you about it and how it could give us the best clause yet about whether aliens ex-ifflet.
emily: a major deal today in the pharmaceutical industry. pfizer and allergen joining forces in a $160 billion merger creating the world's largest drug maker. most of the buzz focuses on the deal and the so-called inversion structure which allows pfizer to take advantage of lower tax rates in ireland but there are a lot of questions emerging about the implications for r&d and innovation in this area. joining me now caroline chen who covers this area for bloomberg news. what does this mean for r&d and innovation? >> yes. so brent saunders who is c.e.o. of allergen set to become the c.o.o. at the newly created major megapfizer has been known for a model where he doesn't believe pharma should do drug discovery. he thinks that biotechs, small
drug companies start-ups should be doing the innovation whereas pfizer should be focusing on marketing, getting the drugs out maybe through the pipeline, getting it approved by the fda and out on the market. he says big pharma should cut back on the early stage r&d. emily: is this a loss for health care? >> new drugs aren't going to be created? the major question really is, is there enough innovation going on outside of big pharma? some people would argue that makes sense. big pharma should do the marketing and the late stage stuff and small biotech should do the early stages where scientists aren't hindered by committees upon committees but there has to be people who will buy the drugs coming out of biotech. that's a question. is there enough capital moving around that these drugs, small drug companies can ipo, can get bought by the big pharma companies. they need to have buyers out there for them. right now there is. emily: okay. so b.c. money has been flooding
into the biotech industry and these small companies. >> yes. emily: what sort of trends are you seeing? >> it is really interesting with drug innovation. there are two sets of firms. firms who have traditionally done the life sciences like deerfield, they're really life sciences and then the techs out here in silicon valley who are interested in health but they are a little more conscious about getting nah the drug making world so they do digital health, digital apps, they'll do software companies around health but they're scared of moving into life sciences because then they have to deal with the fda. emily: so, i mean, new drugs are going to keep being created but would you say the pace is going to change in any way? quickly. >> not in the near future. so far we've benefited from a huge wave of innovation and a lot of money pouring in and we hope that will continue going on in the biotech world because that is where the new drugs are really coming from.
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it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. emily: it's 12:30 in hong kong. >> this is an update of the top stories. pfizer and allergen have confirmed a record merger to create the world's biggest drug maker. the deal is structured to allow allergen to buy its bigger partner. pfizer plc will have a headquarters in new york with a tax address in ireland to keep the liability low. the deal is only slightly smaller than the total worth of the irish economy. china has sent antigraft inspectors to the shanghai headquarters of guotai a day after the hong kong unit said its c.e.o. is missing. inspectors also visited security and 12 other state owned enterprises and six
universities. guotai has not been able to contact the c.e.o. since last wednesday. shares recovered slightly in hong kong after monday's 12% plunge. and resource stocks have driven declines in asia as copper and nickel traded at the lowest prices in six years. australian stocks snapped a five-day climb while chinese shares retreated in hong kong. energy and material stocks are down 13% in asia this year compared with the 2.7% fall for the wider benchmarks. >> the results of the high prices in the boom time has been the incredible cap x which is now just weighing on the market and not going away soon. >> b.w. has won approval to repair diesel engines and have questionable software reviewed in the u.s. the c.e.o. said the costs of the fixes are manageable and a sign of progress. partner audi said it's also made engines with so-called defeat devices and says three
liter diesel engines contain code that would conceal during egulatory approval hearings. sources tell us the commercial banking operation began last week and will be completed in 2017. back in june hsbc released a three-year plan to shrink its work force by 50,000 and cut annual costs by $5 billion. a company spokesman said hsbc is continually reviewing its staff requirements. let's check in on how the markets have been trading in the asia pacific today. here's david. >> it's been very different over the last hour. unfortunately, action has picked up and as you can see has picked up to the down side especially across the chinese markets. taiwan, hong kong, shanghai and australia are now firmly in the red so that is pulling down the overall tide. it is looking much better across southeast asia, very quiet. new york was flat. very quiet as far as macro news
flow is concerned and looking at a very short trading week. we'll see how things shape up after we open in hong kong and china at the top of this hour. >> i'm emily chang. this is "bloomberg west." now for a look at some tech companies we are watching during this holiday week i'm joined by our bloomberg intelligence analyst and our guest host for the hour david kirkpatrick, bloomberg contributor. david, we talked so much about square last week the company now out today with a new card reader. it allows merchants to accept chip cards and apple pay and android pay. now square originally announced the partnership at the worldwide developers conference. what do you make of this? their first reader that can accept wireless transactions. >> it's a big move and it's i think very well timed right
after their ipo to really show a much bigger picture view of what's happening with payments. they've always been very narrow in terms of what they did. i also think it is really quite interesting the way that stock jumped almost to the level of the previous investment, private investment rounds when there was so much hand wringing about the price they went out at. i think in a way they were looking for that pop and they got it. i've always said it was a great company and jack dorsey despite his multiple responsibilities is a great c.e.o. >> so i did speak with jack dorsey on the floor of the new york stock exchange last week. he talked about focusing on the new reader. take a listen to what he had to say. >> we'll focus a lot of our energy on our new reader. we want to see that on the other side of every transaction. and that enables anyone to accept a chip card or apple pay or android pay. >> you know, it's interesting. both went public last week and both saw a big pop. you know, match is priced at the low end of the range square
below the low end of the range. they both ended down slightly today. welcome to being a public company. what do you make of the performance we've seen so far? >> it's challenging being a public company in any environment but given the run we've had, all the macro economic troubles that are on the horizon potentially, it's a difficult environment and the new ipos are figuring that out. particularly that many of these companies had heralded veil jagrs on the private side. so now that they're going public, there's a lot more responsibility for them. emily: david, you know, what do you make of, it wasn't just a pop but a fairly significant pop. do you think these ipos were priced poorly? >> you know, a lot of psychology in ipo pricing and part of it is you want buyers to feel like they got a good deal. you also, you know, the underwriters want to have buyers for the next offering.
there's many considerations. i think in square's case it did seem like maybe they could have priced it quite a bit higher and still done fine. maybe you're right. maybe it was under priced. emily: how optimistic are you about the future of square to become more than, you know, it is very much now focused on being a credit card processing, payment processing company. they're in all of these other businesses that may become significant. singled out square capital as an area she is expecting to see a lot of growth. what do you see square becoming? >> i think square is a small business software company. it's not just a transaction and payments company. i think jack dorsey sees himself as empowering small business owners and entrepreneurs even to the level of people who are sole proprietiesors. i think they'll keep coming up with products that aim to empower those kind of people. i know in his mind he thinks of it as very analogous to the way twitter empowers all of us to be broadcasters on the internet
which was a revolution and he wants to be creating another revolution in business here for small business. emily: now, we're also following two other stocks, h.p., enterprise, and h.p., inc. i know you've been looking at the numbers. this will be their first earnings report since the big split. what are you going to be watching for? what are investors looking for? >> look, i think we'll see a tale of two cities and i think the expectations will reflect that. in h.p. enterprise, i want to see growth. and particularly from their troubled enterprise services division. the boxes are doing okay. but, i mean, there's room to grow there. but on the enterprise services it's a self-inflicted wound they have to correct in order to show sales growth. on h.p., inc., given the trials of the p.c. market, i just wanted to see stable growth but i want to see some operating income stability and potentially cash flow expansion as the quarters go along. so they're both very large
companies even after the split. i want to see some serious progress on operating income and cash flow from h.p. inc. i'd lake to see some signs of sales growth from h.p. emily: david, what about you? h.p. obviously a storied, silicon valley giant. do you think one or both of these companies can really reinvigorate themselves? >> i think any company that's primarily a p.c. company is a very legitimate question how will they reinvigorate themselves? they bought palm in 2010 and basically threw it away. that was a company many people thought could allow them to really innovate into devices in a way none of the big p.c. companies had up to that time. i'm curious. i'd love to ask about h.p. enterprises calls itself a cloud company. do you think that they can really compete with amazon and microsoft and google which are the real heavyweights in that
business? even i.b.m. to some degree? >> david, you hit the nail right on the head. this notion of the hybrid cloud or a private cloud, or some sort of combination, is yet to be invented. so if it is an innovation then it is something that the customers don't want or haven't figured out that they want yet. when we think of a cloud, we think of google, facebook, amazon, microsoft. you know, which has changed and is becoming relevant again. so this notion of intel last week and half of the enterprise i.t. which is morphing, half of them are going to public cloud. the other half is looking inside the company and becoming a different sort of platform. so even intel is seeing this. so this notion of a hybrid loud that is touted by h.p., i.b.m., sysco, e.m.c., old tech if you may, that may or may not
be legitimate and there is a structural problem for h.p. enterprise. so it's a fantastic question. i think the answer we'll find out soon enough. emily: all right. we'll be watching the numbers tomorrow and we'll bring all of that you to. that's why we love you, david, for hitting the nail on the head. david kirkpatrick throughout the show. thank you as always. >> thanks. emily: well, may the force be with google users. today marks four weeks until the premier of "the force awakens" and to mark the occasion google is letting you choose the dark side or the light. users can customize apps like google maps and youtube to show either an x wing cursor or tie fighter cursor with more features promised to come. there is also a tally counting how users are deciding. so far the dark side has the edge but not by much. up next yet another executive departure at yahoo.
includes several others. in total yahoo has lost 13 key executives this year alone according to bob peck analyst at suntrust. what's behind the mass exodus? how much do the departures point to yahoo's struggle under the leadership of marisa meyer? ck with us david kirkpatrick and cory johnson. it just seems like more bad news for marisa. >> yeah. i mean, there's a hard thing to sort of say when did the exodus begin at yahoo? you could say it began all the way back with tim koogle and management change means more management change. asn this situation a top editor guy leaves when a new editor comes up on top. now david kirkpatrick and i both know martha nelson from our days at time, inc. she is a terrific editor, probably best known for creating "in style" one of the great magazine successes of the last two
decades. great editor of "people" as well. when you start to chart out the numbers, you actually see a significant change in the calendar year over the steady drone beat of changes in prior years. we've seen 13 and now perhaps 14 pret sein orexecutive departure -- pretty senior executive departures. emily: two were big hires for her. you have bob peck out there saying it might be time to consider new leadership at the top. you and i were talking about this last week. you seemed to be on the side of we should give marisa meyer more time. >> i've always been on that side. i try to be very charitable because i like her. i think she did great work at google. i think though increasingly you have to look at ya hoon see a their "strategy" feels very reactive. you don't really feel a strategy that has stuck with and is delivering results. as was pointed out some of the
key executives she brought in to build a powerful media business, to improve the power of their media business, if they're leaving that is a bad sign. one thing i said the other day i would continue to say is they continue to have very good businesses like yahoo mail and some of these apps that we, all of us, many of us use. the weather app. i even like their news app. it delivers headlines. but in reality they're not big enough to sustain a company that, you know, if it were ever to spin-off alibaba has to be an exciting company that's going to be perceived as having the capabilityy to grow. emily: starboard is saying the rest of yahoo minus alibaba isn't worth more than $2 million. we were looking at some of the numbers and just three of the nine board members were on the board before she joined. i was talking to michael wolf who was brought in as a board member during the dan lowe situation. he is no longer on the board. and in talking to him about
this he said my goodness let's give the woman a break. give her some time. i mean, do you think she's had enough time? >> i think it is very clear the drum beat is saying what she is doing isn't working. warren buffet long said when the reputation is bad of the business and the manager is good the reputation of the business will survive. emily: no one said this would be easy. look at the grave yard of c.e.o.'s before her. >> and there is a terrific piece in "forbes" where he points out all of the issues at yahoo not least of which is morale within the company. it has been a place with rough morale as we mentioned back to the dot com bubble. i think martha nelson is a terrific editor but a lot of people don't like to work with her because she wants to make a lot of changes of her own and they might have nothing to do with marisa but making changes on one level creates a whole wave of changes on another level. i don't think a lot of changes in the people at yahoo should be a great surprise to yahoo
watchers. it has always been thus. emily: the woman is about to have twins, about to go on a short -- a maternity leave. you know, i want her to succeed, david. how do you see this playing out? you know, there is talk about yahoo going private. obviously no one can think of somebody better than ma rhysa to run the company who doesn't have a job but what happens to yahoo? . >> even tim armstrong didn't have an easy job turning around a.o.l. and he improved it. i don't know whether he really turned it around either. these old media, old internet media businesses based on an old model are not an easy task to revive. you know, i am sympathetic to the notion that marissa needs time. by the nature of her hiring and kind of personal visibility in the industry she is under a much more intense microscope than almost anybody else at a company of that size. especially maybe a company of that importance. the company's importance may not be as great as the scrutiny
she gets would indicate aside from the fact it owns this giant chunk of alibaba which is a sort of historical anomaly. in a way i think she does deserve more time. it is a very tough challenge. i think she has a lot of gifts as a leader but as i said before i've been disappointed to see this strategy seeming more and more reactive. emily: small point. a.o.l., facebook, google, and twitter all have higher profitability per employee than yahoo. >> she promised to bring that google like d.n.a. where you have the very best engineers creating products with super high margins. that hasn't happened yet at yahoo. she has been there quite a while and spent billions of dollars in acquisitions to make it happen fast. she didn't say this was going to go slow. she said she is going to make it happen fast and has spent billions of dollars of investor capital to do so and it hasn't been happening. emily: we'll keep watching. thanks so much. david kirkpatrick, great to have you here throughout the show. >> thanks for having me. emily: as always, david, thank
you. coming up a massive multi national science project is under way in the middle of one of the driest deserts on earth. the director of the giant magellan telescope project tells us about this major undertaking next. plus a dire warning from nasa's inspector general could have severe implications for future migs to mars. we'll explain next. ♪
emily: today in out of this world matt damon may have been able to survive mars in a hollywood movie but in reality scientists are nowhere near ready. this according to a recent audit by nasa. the report found that deep space travel poses serious dangers to astronauts' health. it was meant as a warning as
nasa moves ahead with plans to send the first manned mission to mars by the 2030's. the report states that future mars crews will likely have to accept more risk to their health and safety than past crews who went to the moon and the international space station. and sticking with space, construction has begun on the giant magellan telescope. this is a multi national science project led by the u.s. to build what will be the world's most powerful telescope and give us views into space at up to 10 times the resolution of the hubbell space telescope. why? joining me now from l.a. the director of the giant magellan telescope organization, so this is 10 times more powerful than the hubble telescope. what kinds of things will you be able to see? things we've never seen before? >> in some cases things we've never seen before but in many cases we want to take objects and phenomena that we see today and see them with 10 times the
clarity we can now. in particular we want to use the gmt to look for planets around other stars. we know now the milky way is teeming with planets but we can only see a few simply because they're too close to their parent stars to be seen on the projection of the sky. by having 10 times the resolution of the hubble space telescope we can directly see plan etcetera as they orbit their parent stars to look at their composition, structure, and understand as our sole -- is our solar system typical or unusual? in addition we use it to look back at the very early moments in the universe, the first years after the big bang to see with extraordinary clarity as galaxies formed, central black holes formed, and they evolve to become the galaxies we see in the universe around us today. emily: so is the telescope going to help us discover potentially whether there is alien life out there? >> it looks like we've lost dr. mccarthy there. we're having trouble with the
hearing. pat, can you hear me? all right. looks like we're having some trouble with dr. mccarthy's audio there. such a great story. we'll try to bring him back for you at some point. dr. patrick mccarthy working on the world's most powerful telescope. they say it is going to be finished in the early 2020's. 10 times the resolution of the hubble telescope, which is by the way, 34 feet wide. that's the largest telescope in the world currently. this one will be 85 feet wide and actually i'm hearing dr. mccarthy is back with us. pat, are you there? do you read me? >> yes. i copy you. emily: you're there. my next question was, will this telescope help us discover if alien life is really out there? >> well, i think it will help us discover if planets that are, have conditions conducive to the formation of life exist. that is are planets that are in a location where water is
liquid, are they common, do they have atmospheres with chemistry similar to our own? i don't expect we'll see alien life. we won't see little green men. we'll have an understanding of how common are planets in the habitable zone where they have conditions conducive to life. as i said water in the liquid phase, temperatures right for life, and conditions exist somewhat akin to the earth today. emily: quickly, you're targeting early 2020's. how soon will this be built and operational? >> that is correct. our goal is to have the first eye on the sky in 2022. that will probably be with a subset of the seven giant mirrors and then we'll add the remaining mirrors between 2022 and 2024 and by 2024 or 2025 we should be on the sky with the full capabilityy, full ainge laher resolution, and doing science full-time. emily: all right. dr. patrick mccarthy working on the biggest telescope in the world. thank you so much for joining us. >> thank you. emily: that does it for this edition of "bloomberg west." tomorrow on the show all the details from h.p.'s first two