tv Bloomberg West Bloomberg January 11, 2016 6:00pm-7:01pm EST
west." there was an attack today at a mall in baghdad, and the islamic state claimed responsibility, detonating a car bomb outside a mall and suicide vest inside the building. the attack happened in a predominantly shiite neighborhood. started the process of extraditing el chapo, but they say it could take up to a year for the drug lord arrives on u.s. soil. six monthske hismum, but it depends on attorneys. non penn is expressing regrets and tells the ap he has got nothing to hide. here in the u.s., the house is poised to offer legislation for north korea's latest nuclear test by expanding sanctions. they are looking to deny north korea money it says it needs for a program, and a maryland appeals court is delaying the
the of the police driver in death of freddie gray. prosecutors say freddie gray was fatally injured while being transported in that van. that is your bloomberg first word news. ♪ i am emily chang, and this is "bloomberg west your quote -- "bloomberg west." with over oneead billion rides in 2015. how uber is responding to the competition, and snapchat is said to be rivaling facebook in video views, even though
facebook has 15 times as many users. first, to the lead. the tech ipo darlings of 2015 lost a little more love, finishing down more than 10%, fitbit since its debut, is downined, and etsy since it went public in april, and gopro is down. why are people so anxious? cory johnson joins us, and david fitzpatrick, a founder and ceo, and also alex, a bloomberg reporter. what is the common thread here? the common thread is that when they went public last year or 1.5 years ago, they had this astronomical growth.
they said they had all of these were notties, and they as focused on the bottom line, on property, and now in this investment environment, this turn in investor sentiment we has seen in broader markets sent investors fleeing some of these companies that seem a little bit riskier, so that is kind of the overlying theme. consumers can be fickle, and if they are not really proving they have a solid business plan going forward, investors are being more cautious. are youory, what seeing? is one that did an offering and then a secondary offering that let them of the insiders it outside. -- get outside, but the point of an ipo is to have the stock performed afterwards. for the company, the point of the ipo is raising money, so raising money is part of the company plan, and you can see
that these companies are having varying degrees of success in money,ble to raise fitbit among them. the company really raised a lot of money to fund their operation and introduce new products and to bring their company ahead, and that was a priority ahead of insiders making money or allowing traders to trade. gopro can make the next hot device, or something beyond, and for fitbit, there is the new fitbit looks a little too much like the apple watch. not supposed to take on a goliath like apple, what are they supposed to do? >> everyone is going to have a watch, and i think everyone will have a camera to strap to their head. you have to figure at what they are doing on the software side well. doing
i think fitbit is doing better than people give them credit for, because everyone competes with each other on their fitbit with steps and that, and if they can build on that, it keeps these companies gigantic and gives them the right to have huge market cap, in my opinion. ry: the giant in this is fitbit. sorry, that is my agent calling. vertical. that is an interesting distinction clean we are focused on fitness. apple watch is trying to do something for everybody. we have got a smaller fitness. emily: at the same time, the tech companies are not seeing these guys. alex, what is going on there? : from my conversations around what investors are thinking when these companies are looking to ipo and how they are preceding what is out there,
enterprise tech companies that have recurring revenue that people can see the path forward, they can see cash flow, those are the ones that are being preferred. when you look at the tech companies in the s&p 500, the big ones are the intel and cisco, and it is the fitbit, gopro, these less proven business models that people have more concerned about. across the board outside of tech, and you have seen these kind of connections -- , and they are looking something to put their money in because there are some broader concerns. emily: 2015 was supposed to be the year of resurgence or tech ipo's. it's not that, then, david, what? david: some are never really going to be in serious trouble,
like facebook, one i am fairly so it is, ae about, game, where is the real dominant company going to come from from among these small startups that have been out for a short time and even among the so-called unicorns that are not public yet? skepticismlot of about how valuable these companies are, whether they are public yet or not, and time and time again, none of them are in real jeopardy and will remain good investments. emily: ok, we are going to be covering it. david, you are with us for the hour. our editor at large, cory johnson, thanks for stopping by, and our ipo reporter, alex, thank you. now, staying with the markets, the nasdaq extended climbs for an eighth straight session, and our bloomberg senior markets correspondent julie hyman has a look. to the wires down
for all three major averages, but the nasdaq did not quite make it there. all of the benchmarks saw s as they tried to recover. nasdaq 100, however, did make it, so there was a detergent pods between the larger cap and smaller cap stocks in technology. on the downside, it was biotech showing some weakness. one ceo issued disappointing guidance, and amgen was pulled it down with biotech, and vertex after the close on friday, its ceo also commenting in a conference that the drug pricing in the future will depend on the outcome of the coming election, and apple saying it had reached 10 million users for its music service, and it got a couple of
upgrades, amazon rebounding, and intel, as well, rounding out the top tech reporters. julie hyman, bloomberg, new york. you,: all right, thank julie. bets are on for fantasy sports, at least for now. a judge ruled drafting's will be able to keep going, along with a judge ruled that duel can keep fan going. at least for now. coming outup, swinging in retaliation. thus, surprises between netflix and amazon at the golden globes. it details, later.
emily: it took spotify six years to hit one level, putting to the financial times, reporting the apple membership site after they launched a service compatible with and speaking of stats, ramping up with some major new numbers. it registered more than 1.4 billion rides in 2015, 200 million just in december. remember, uber came out last month and said it also had booked over one million rides,
but that was counting from its inception in 2009, so what does it mean? reporter whor news covers all of these ridesharing and ours is with us, guest host, david, is still with us. is this really apples to apples question right there is carpooling and other services. is it fair? >> really, there is the peer-to-peer ridesharing, and uber is at 30% market share really, so definitely behind either way. in the united states, we think about uber all of the time. uber.uber, we should realize they have a lot of products, and this puts them together in one bucket. million pering $70 week, and that is almost $4
billion a year. it is also about how efficiently you invested. they came back to us and said they strongly disagree with it. they have experienced tremendous growth. it means that drivers can consistently get more rides and earn more income on our platform, reducing the need for subsidies. what do we actually know? : there is a lot of sniping on both sides. it is opaque, and i think both are trying to come up with estimates for the other side. i would say generally number two, which is what uber is, in is united states, lyft certainly spending a lot of money to grow market share against uber.
how much and how that plays out with didi is hard to say. we talked to some drivers who said they could make more was thath didi, but it uber was more widespread. how does this play out for uber versus didi? there was a question about whether or not uber was a monopoly. emily: it is funny because the l.a. times have the opposite story, saying that lyft is gaining on uber, particularly with the millennial crowd. david: i think it is really interesting to think what could i'sthe implications of did because theh lyft, scale of activities on your platform really make a huge
lyftrence, and if didi and can improve their software at a pace and scale comparable to uber, i think that could be a to deftly stay in the market. i have been an uber user. they gave me $50 in credit just to get me to stay on, so it is very aggressive. to look at cooper, and american companies, we think game over, but china is a huge market. it may be opaque, but didi is a huge company with tencent and alibaba behind it. emily: hey, $50 in free rides. i will take it. meanwhile, air, uber is cutting rides in 100 or more cities. is that alarming, or is this just a typical part of the story?
it is january. eric: they are cutting 80 cities and are planning to do 100. we're talking 10%, which is somewhat significant, and drivers are up in arms. across the board, bieber says he will make more money. you will get paid less on each drive, but you will get more rides. people are super skeptical and saying they're going to go to l yft. there is some churn. yes, customers are definitely used to uber saying your rates are going to go down. emily: ok, alex, thank you. david, you are with me for the hour. well, they are certainly not having any trouble raising money, but i want to turn to israel. israeli tech exits. our middle east reporter elliott gotkine reports.
: another bumpy year. exits including ipo's told more than $9 billion last year. more is really startups remaining private for longer in the hope of getting a bigger exit down the line, and also the window for opportunity for ipo's shrank, according to one of the reports. >> there is a lot of talent, and the technology comes out of israel continues to be very attractive for multinational buyers. so i would expect in 2016, we will continue to see significant volume of transactions. 2016. billion, and i5 would not expect 2016 to be less than that. there may be less unicorns, but in terms of their ability to generate significant demands and
entertainmentour reporter who covers media for us, and david is still with us. "star wars" got the box office, but it is still chasing the global record of "avatar." of sales int europe, australia, brazil. ,ountries across the world where "avatar" got 80 dumbly and dollars -- got $80 million, and the next is getting to a much bigger overseas total. emily: i am sure we are going to continue tallying up the numbers every weekend. i went to transition to the golden globes. first of all, aaron sorkin winning the screenwriting award ." "steve jobs it was a very controversial movie, and kate winslet winning in the actress category. i did talk to aaron sorkin.
listen to what he told me about this particular script. sayith steve jobs, i can that the rest of the world may not agree, but this is the first time i have felt at the end of a wrote exactly the movie i wanted to write. emily: it is interesting. apple has not been happy about this movie getting made. aboutbs family not happy this movie being made. he still won the award. what do you make of that? sorkin is aron great screenwriter, but i have an issue with someone who takes a person and write stories about them, because people watch a movie and think that is about that person, and the same thing happened with the movie about facebook.
i can't tell you how many people come up to me and tell me they do not like mark zuckerberg because of how he is nervous and etc. emily: in the industry? reporter: it is true, your storytelling is legitimate, but about realries people, and in this case, they are 25 years old, i think it is questionable making hollywood movies about real people that are partially fictional, and i think that is why so many people in silicon valley were upset about this steve jobs movie. there is very little support for it in silicon valley. reporter: there have been a lot of reference is made to "citizen kane," about william randolph hearst and david, that would does not bug me at all. that is a much more responsible vision. it is more marketable if you use the real names. emily: some other surprises.
amazon really surprised with this "mozart in the jungle" and beat out netflix. report on yes, last year for "transparent," and it has been a acclaimed show. "mozart in the jungle" is popular, but most of the responses i saw thought that was the biggest surprise, because it is a pretty good show that beat out some really good shows. network are the networks that got two prizes, two networks that did not do all somewell at the emmys, and networks like hbo got nothing. emily: how much does a golden globe matter? they gervais was saying really do not matter at all, but do they?
are fundedhey everyone's favorite rewards show to go to, and i was at the hbo movie, and i went up to the ceo, and i said, richard, you go to a million of these, but which ones of these do you enjoy? he said everyone gets to drink is looser,n, and it but in terms of the significance of the awards, they realize they are voted on by 82 journalists, whereas the oscars are aware you went because all of your peers think you have given the best performance. emily: all right, our entertainment reporter, and david here with me throughout the show. coming up, we are going to be talking about the yahoo! brain drain. that is next. ♪ we live in a pick and choose world.
in hong kong, we are joined by yvonne man with the stories making headlines in asia. : china has come out swinging in defense of the yen. one of the most senior officials in charge of economic the says forecast of a large fall in the currency are "ridiculous" and that anyone shorting the yuan will not succeed. a senior economist at the pboc says investors have misunderstood the reasons behind the recent weakening of the currency. china's slowdown has growing .mplications for india 1% syntax fell 4/10 of monday, having dropped more than three times as much earlier. china is india's largest trading partner and third largest export market. indian shipments declined 12 consecutive months through november.
idc says the mobile market in china contracted with the past three quarters, while shipment delays also hurt xiaomi's sales. china is their main market, accounting for more than 90% of total sales. cap cow has made a $1.5 billion bid for low-end entertainment. melon streams the widely popular korean music also known as k pop. emily: we've been watching these messaging apps closely. how big of a deal is this? how will this take over help them? yvonne: if you think of chatting in korea, you think of kakao. its the number one messaging app in the country. give it access to the biggest these extreme and service in
korea, and it is huge. they are trying to reduce the dependence on traditional forms of business and diversify its revenue. tapping into k's is one way to do that. they also want to expand offshore. this could be a potential big deal. how they are going to monetize this is a big question many analysts are asking. if you take a look at how each generation -- each user generates revenue, kakao generates four dollars per user. whatsapp generates six cents per user. there is an opportunity for monetization. emily: yvonne man, thank you. to the real estate listing site auction.com, rebranding itself as tenex, creating a new
platform where buyers can purchase a home completely online without ever talking to an agent. the former website has gone through a series of changes and expansions since receiving an investment from google capital in 2014. the company's various real estate platforms have resulted in 200,000 residential and commercial property sales, totaling $35 billion since 2007. joining me to discuss the rebranding is tim morris, ceo of the newly named ten-x, former cfo of yahoo!, and former interim ceo of yahoo! we are going to talk about that. let's talk about ten-x. why the rebranding? tim: it's another step in the evolution of the company, but we are changing, so the name is changing. as you mentioned, the first true online transaction ability for consumers to buy and sell a house with or without an agent. auction functionality,
non-auction functionality, value propositions for brokers, functionality for brokers and agents, better tools and data and intelligence for everyone. we look at it as a rallying cry. we want to make buying and selling real estate better for everyone. emily: you've been compared to trulia. tim: we are not a listing site. we are a place you go to transact. for instance, we are trend -- partners with zillow. when you come to us, you get the pre-portion of the transaction, the diligence, the transaction itself, and the closing, and a transaction manager. emily: you are launching in dallas, denver, phoenix, and miami. why not san francisco? tim: we wanted to pick the best markets that we thought were most translatable to the rest of the country. we stayed away from l.a., san francisco p the other ones are
more representative. emily: do you think yahoo! needs to rebrand? [laughter] tim: what a transition. tim:i'm not that current on the yahoo! story. it's similar to what i know is going on at the end of 2011, beginning of 2012. similar.ily i think that management team needs more time to turn it around. it's a really big job. they've got the media side of the business. they've got the technology side. it is a huge ship to turn. you need the time to make the plan stick. emily: if you armor samira, because you -- if you are marissa mayer, because you have been in this position, what would you be doing? tim: you are trying to minimize the external distractions and execute your plan. emily: what should the plan b? tim: i really couldn't tell you. is there something that you think could have changed the course of yahoo!'s history for the better? tim: the only thing i can think
of is, they are a mix of media and technology. that decision was made a long time ago. it's tough enough to be the best in media and technology. to try to be the best in both is exponentially difficult. emily: "the new york times" has reported one third of the workforce has left. yahoo! says they are still hiring, and the numbers are strong. is there a sense of denial here, or what is really going on? tim: turnover across silicon valley can be very high. emily: 30%? tim: that is exceptionally high, but if you were to call it 15%, that's not abnormal. it's double that. that's a lot. i'm sure there is an element that is forced. there's another element of people who don't like where the company is going, so you proactively bring in people who believe where you are going. again, past that, i can't comment. emily: as a former cfo and
former interim ceo, how do you view this playing out? what is the next chapter or the end of yahoo!'s story? tim: i think they have to figure out a way -- i heard recently it is one billion users. when i left, it was 725 million monthly. they have to figure out a way to use those to best effect, and whether it's with a partner who creates synergy around those or they have better breakthroughs on the media side of the business, i don't know. emily: would you sell? would you sell the core business? tim: if you found the right strategic partner. emily: yeah? all right. we will be watching. yahoo! interim ceo tim morse, also the cfo at one point, and ceo of the newly rebranded ten-x . ces steal this weeks auto show thunder? we will go to detroit next.
emily: snapchat is turning into a mobile video juggernaut. the social media's part of is set to be delivering more than 7 billion mobile videos a day. compare that number, 8 billion for facebook, which has 15 times as many users as snapchat. sarah frier covers these companies for us. you and i worked on this
together. what do you make of this? for a company that has 100 million users, 7 billion mobile video views a day? sarah: it's a huge number for that amount of users, but remember that the way snapchat works, the product is centered around video. people send each other snaps. they look at discover content and live stories that compile videos from many users at once. every snap that is watched is counted as a view. what snapchat is doing is making it possible for people to just communicate through video, which is different from what facebook is doing. emily: there are also some interesting details here. that 8 billion video views for facebook, not only does it count desktop and mobile, but facebook is known for autoplaying a lot of its videos. in snapchat's case, you have to
click on the video to make it play. sarah: this is the problem. nobody can agree on what a video view is. facebook has a different definition from's that shot who has a different -- from snapchat who has a different definition from you too. if you autoplay for two seconds come even if it is on silent, even if it's a line of pixels, snapchat starts to count a view as soon as it hurts playing, even if it is less than a second. it is confusing. emily: it's a different proposition to advertisers, as well. orthe video is autoplaying has the sound off, that's different. i believe that 8 billion number came out when facebook reported earnings. they are reporting earnings again in the next couple weeks. that number could be updated. youtube is a big player, but youtube doesn't reveal these numbers. facebook, that 8 billion
number is for all the video views on all of facebook, including desktop. when we look at this 7 billion u.s. i hear from our sources for snapchat, that is just mobile. that is huge. the market for digital video advertising is going to be more than 7 billion last year, and this year, even bigger. it keeps growing. this is where all the money is flowing right now. whether snapchat can turn silly selfies people send each other into real dollars, we kind of have yet to see that he that is one thing i'm talking about with people in new york, but definitely a huge milestone for the company. emily: we will be watching for that new number coming out, facebook's earnings report in a couple weeks. era fryer, thanks so much. -- sarah frier, thanks so much.
heading to detroit where the auto show is underway, some early highlights, the honda civic named north american car of the year, and the audio hydrogen concept car, and the new nissan titan warrior pickup truck, but what is stealing the spotlight is the technology being showcased inside the cars. here is bloomberg's matt miller. matt: at the north american auto show, technology has almost taken over. unlike ces,hough, is focused on driving. mercedes and audi have led the way in virtual autonomous driving, and bmw, as well as isla, which didn't show up, focused on electric power trains for the i3 and i8. volvo has come along with a completely new powertrain, four-cylinder engine that has a supercharger, turbocharger, and electric motors. very interesting features. most of it is focused on powertrain.
ford thinks it is leading the way in technology. listen to what bill ford, the chairman, told me. bill: we are having disruptions in the powertrain itself. we are having disruptions in the ownership model, with either or fractiousicles ownership, and we are having disruptions with share driving. matt: ford announced its ford pass, which is an app, which will give users, whether they are ford owners or not, the ability to access ridesharing programs that compete with uber and lyft. eventually come it will help users compete with apple pay, so they can pick up fast food using this for pass app, and there will be a concierge service that competes with gm's onstar, not only giving you directions but also helping you park. here in detroit, it's really all about tech, but it should have a little bit of power behind it, as well. matt miller, bloomberg news. emily: thanks so much, matt miller.
speaking more about self driving is a selftesla, driving car as little as two years away? elon musk thinks so. he predicts cars will be able to autonomously drive from l.a. to new york in two to three years. also announcing a software upgrade that will allow cars to park in perpendicular spaces without a driver at the wheel. david kirkpatrick is with us. what do you make of this flood of self driving car news over the last several weeks? david: elon musk, as great as he is, is way more optimistic about when we will have self driving cars than anyone else i've talked to, but i think the auto industry has gotten the memo that technology is transforming their industry. cars are becoming like basically an ultimate mobile device. software is becoming hugely important in how they operate. one of the things i picked up at
ces about self driving cars is that these carmakers, particularly ford, don't think we are going to buy them ourselves. these are going to be fleet vehicles that are going to be used in circumscribed areas like -- campuses or downtown areas. it is very expensive to it i don't think the ordinary american is going to be buying a tesla anytime soon. i do think that self driving cars are really a sleek problem, and they are going to be basically not the kind of technology transformation that we expect in the short-term. i think it's a longer term thing you would i think it's amazing how these companies are talking about mobility. i was struck when daniel amann on the show was talking about consuming mobility. that is the way all of these car companies are thinking about cars. they are just mobile devices.
they don't even think about them as cars. emily: the president of general motors, which partnered recently and i believe your thoughts echo what he said, that these cars will not be going direct to consumers first but starting off in fleets, whether ft fleet or something else. david kirkpatrick, you are sticking with us. i want to leave you with reflection on legendary rock star david bowie who passed away sunday after an 18-month battle with cancer. >> ♪ turn and face the strange changes ♪ >> ♪ ground control to major tom ♪ emily: bowie rose to fame with "space oddity" and often performed as alter egos iggy stardust, but it wasn't just his music that was cutting edge. million in sold $55 bonds tied to future royalties from some of his biggest hits, allowing him to raise money without selling rights to his
work. in a 2002 interview with "the revealedtimes," bowie a savvy sense of the future of streaming music, saying, i don't even know why i would he on a label in a few years, because i don't think it will work in the same way. music itself is going to become like running water or electricity. you better be prepared for doing a lot of touring, because that is the only situation that is going to be left. on the news of his passing, sales of his albums skyrocketed, taking him to number one and number two on itunes. "bloomberg west" continues next. ♪
the speech will be streamed on amazon, both live and on-demand. how is this president in gauging with the tech community compared to other leaders? what do you make of nadella getting one of those special 24 invitations? cory: with immigration in the news, republican presidential candidates talking about walls, talking about barring immigrants from other countries, nadella is an example of a great leader in this country who wasn't born and a great american who wasn't born in this country. i'm sure this is a big part of the appeal for president obama. emily: microsoft, also making efforts to get more and more people learning how to code. david, you and i have been --king about shawna dela nadella's incredible rise. david: corey is usually a sage on this matter, but keep in mind, eric schmidt was there not long ago. adapt to obama does
technology. there are a lot of things happening in this administration that unfortunately would have more progress if the congress cooperated. this white house has understood how transformative tech can be for the economy. they are getting on board with interesting ideas. emily: we also have intel earnings coming out. what are you watching? corey: data center. their market share in data center has been very good, but it could get better. i think we are going to look for the benefits of this acquisition. have beenojections kind of weak, and that is what we've been working off of. looking to see what the update is with the last time we got an estimate out of intel was analyst day back in november. this is an important earnings call. we will be talking to stacy smith after that.
this is the chief financial officer of intel. pc sales have been all over the map, mostly bad and worse in recent quarters. one wonders if that might stabilize. emily: there has been a lot of consolidation in the chip industry. you and i have been talking about that. does it change intel's place in the future of technology? is it going to be different from its place in the past? david: intel thinks so if you can judge by their boots at the es -- at ces. they were playing up to run software and sensors. y are trying to think of themselves as being a much broader impact company, and they are working hard on their image to make it a little less geeky and under the covers. i think they have to. there are all kinds of amazing news, amazon building chips that can go into data centers. it's a new world for these tech companies. emily: what is the biggest competition right now for intel
in chips? but itt amazon per se, is interesting amazon is moving into the business. cory: the problem is the places they aren't. they don't have success in mobile phones. they don't have success in tablets. they would argue otherwise, but the truth is the truth. they are looking to other businesses. when you have qualcomm having such success in mobile devices, intel is simply not there. the internet of things, that was one of the big themes of ces, the notion that so many devices, so many things are going to have sensors in them that gather information and feed information into the internet. that's going to be a big deal for these guys going forward. they have positioned themselves so that 10-15 years from now that with the internet of things come intel is going to benefit most. emily: what is intel years from now? david: i think corey is right about the internet of things
being impactful for this industry. 15 years is too long for me to understand how any of these companies will morph. intel has a great business in terms of its long-term conventional strategy of chips for pcs, and if they can get into mobile, great, but i couldn't tell you 15 years down the line. it's too far away. emily: david kirkpatrick, founder and ceo of techonomy, i appreciate your honesty. cory johnson -- i will be honest just this one time. emily: thanks for watching. that does it for this edition of "bloomberg west." do not miss our special coverage of president obama's final state of the union address tuesday, 9:00 p.m. eastern. ♪
♪ from our studios in new york city, this is "charlie rose." charlie: in nine months, the country will elect the 45th president of the united dates. national security is dominating the campaign in a way we have seldom seen. many challenges are bound to the president's successor. mike morel has served as cia's deputy and acting director. he has served several presidential and vice president candidates. he has written a fascinating new book called "the great war of our time."