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tv   Bloomberg West  Bloomberg  January 22, 2016 6:00pm-7:01pm EST

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motivation behind the recent objection of three americans in baghdad. theking in devil's, he says men were likely taken by criminal gangs. so far no ransom demands have been made. financial times is reporting russian president vladimir putin asked bashar al-assad to step down. head reportedly sent the of military intelligence to deliver the message. the sod is said to have angrily refused. gusman may endo up in a u.s. facility soon. was recaptured six months security -- aed a top security prison. the approaching winter storm takes aim at the northern corridor. all flights have been scrapped
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for now. airlines -- it could be one of the worst ever to hit the eastern seaboard. ♪ : coming up the polish is back on apple. investors snap up shares ahead of the country's next earning report. pay to play, google rights $1 billion -- google rights a $1 to apple.eck high-tech firms to practice what they preach when it comes to diversity. we will debate the issue. shares of apple over 5%.
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the stock outperform in s&p and the nasdaq year to date me at still another apple search is being predicted and investors seem to be listening. >> we have looked at the historical trading over the past 10 years, and we are not at historical lows, but we are near givesical lows, so that us confidence going into this despite the skepticism. emily: joining me is our bloomberg conjured eating editor. adam, i will start with you. given allnto context of the native -- all of the negative context be it he thinks apple shares will increase because of the next iphone. there is a lot of
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volatility around the stock lately. people are waiting to see what the company is going to do next. there is a lot of report coming out of the supply chain with weakness in the iphone. gene munsterlike is saying some of these concerns are overstated and this is a cyclical dip. this will pick back up in the fall when new products rollout. analysts, not so bullish. how about you? paul: i think i just lost you. fixed,while we get that talk to us about how that plays out for apple. adam: last year they made a big hay about the new products
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coming out. essentially having this new ensemble around the iphone. music product -- everything hinges on the iphone. this next model, new features will go a long way in determining how the investors feel in the company. >> this is something our legal reporter doug out of a court transcript from oracle to google. , explain unrelated this $1 billion beat.
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adam: when you search for something, say you are searching for a certain kind of shoes, it goes through google. what google pays apple is a big secret. they do pay to be the service there. now this information came out in court filings. google and apple try to have this information redacted from the court records. emily: it suddenly disappeared. we spoke with gene munster about this. there have been rumors about how much google actually pays for this service. like a big number. but in context they generated 3 billion in revenue from that. what that implies is a 33% attack, traffic acquisition
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costs. more than a typical traffic acquisition costs, but lest then what had been rumored. in some ways if you are going to ask me to guess before i saw the number, i would have guessed it was closer to one end -- 21 $.5 billion. point -- at what point does apple say we don't need your money? their sake i hope never. you look at mozilla, it became a lifeline keeping that company alive. not to gogs tend away. it is an important line. paul, gene munster is
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bullish on apple. a lot of other analysts, not so much. do you think apple's story plays out this year? >> did gene stop being foolish at any point? no fault of jean. i am still very concerned about apple in the current calendar fiscal year. i think you are going to see negative year-over-year .omparable declines i think iphone seven, it is difficult to see this is the blockbuster upgrade we saw on the six. course, so much of the growth has been coming from asian markets and we have seen what is happening in terms of the recession and broad economic
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decline. i don't see a recently optimistic. emily: what is going to be the next most significant product on apple? focusing on the near term, some of services like apple pay or music. those are really incremental. another analyst was saying for an iphone apple gets about $300 in profit. payet even $100 from apple require 60,000 transactions. these services require so much volume to add up to make up for any sort of decline in the iphone. emily: thank you so much. our bloomberg and she beating editor, you are with me for the show. isn't the only place google is putting its money.
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google is also paying back taxes .o the u.k. government google is adopting a new approach and that is a set of going back to 2900 britain is the second-biggest market after the united states the news comes as the financial information was also emerging is google's android operating intem generating $31 billion revenue. u.s. stocks closed higher after a wild week of swings that remy has the rapid new york. ramy: closing at a session high of 90.41. the s&p and the dow were so close to doing the same. 's so much of it had to do with
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technology and energy stocks. tech was the second-biggest. as the naz -- look at the nasdaq. closed stocks, amazon 3.7% higher. biggest jump since october. the retailer plans to add more than 7000 jobs in europe. invested 15 billion euros on infrastructure and operations. is betting against amazon and netflix. those positions were disclosed to clients. about 4%.hares rose
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that was the biggest jump since november. instagramts note say would drive sales and be an important catalyst. both firms have an outperform or positive rating. back to you. emily: speaking of amazon, the company is offering full refunds to anyone who has purchased a hoverboard. regulators are investigating 40 cases of hoverboard's exploding or catching fire get the consumer product safety commission is looking into the lithium ion batteries used to power the hoverboard. the government hopes other retailers will follow amazon's lead. up, how technology made income inequality worse. one of the news from economic forum in davos. a ride on a billionaire's bad way to isn't a
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get around. for one person it could be the best day ever. we will explain later.
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emily: first up, we bring you exert from our .nterview stephanie ruhle asked which issues are keeping him up at night. >> usually we would say regulation. but regulators in europe have it right. they have it right on net neutrality, on consolidation, on telecom single markets. i'm nervous by nature about certain things that i'm pretty relaxed. control china.
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i can't control the price of oil. i can't control consumer demand. we have to power through this uncertainty at uncertain times and do it we can do for our consumers. i have to be careful. around the net neutrality they can. is a very healthy balance. we can provide specialized services and they can do what they do you they struck a healthy balance their. emily: erik schatzker sat down -- we could see a reset for fundamentals for unicorns. >> there was a lot of enthusiasm and capital that came in to the
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market from investors that have historically invested -- i say they may look like tourists. very incredible public investors that have not done that kind of investing before. i think we are going to see a lot of that value retreat. and then they are going to regret those investments. they will likely regret those investments and you will see a reset back to fundamentals. valuations have to be based on a multiple of cash flow's, not on a multiple of revenue or theoretical cash flows. disciplinental around value investing, i think you will see it reenter the equation. finally, has technology made income inequality worse? that's what -- said when she sat down with tom keene. take a listen. been a great has boon to productivity. it reflects tremendous
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innovation, but it also has displaced lots of workers, it is laborsaving, it is skilled biased so it helps those at the top, it is a major contributor to income inequality. it is also the case that productivity gains from the technology have not been broadly shared, in part because technology has been wiping out middle income jobs. emily: how should business leaders addressed the fact that technology could reshape the way entire industry's function? david kirkpatrick brings us his update from davos. david: there is a huge question that comes up time and time again about what technology is going to do two jobs. attending on was the travel industry, one of the travel industry ceos said he thought the biggest single issue they are going to have to deal with is what is going to happen
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once all the jobs in their industry start to go away? about what are the political ramifications and what does it mean for their role in the community. one of the people he has invoked who wrote to talk about this issue and it was a big defining issue last year as well. concern of tech's roll on job creation and job destruction is not going to go away. >> david kirkpatrick in devils. -- in davos. the nation's fourth-largest wireless carrier moved up the date it will report earnings. that reinsured investors about it turn around. sprint fell to multi-year lows earlier this week. the companies expected to report its first full year of subscribe
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-- of subscriber gains in eight years. after a four-day slump that may japanese company worth less than the stake it holds in alibaba. part of the slide attributed -- the ceo has struggled to turn around sprint. for softbank's biggest acquisition ever. as we head to break, here is a look at what is trending. at this video uploaded by scott kelly, showing how he and fellow astronauts play ping-pong on the international space station. more bloomberg west next.
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emily: the company that has once resisted letting local taxes has had a change of heart. airbnb had a global policy. withdees were told, work us and we will collect millions of dollars in taxes for your city. this is part of the latest push for corporate let -- for corporate regulators. about this last month. >> a lot of cities are getting the basic point. this is a new thing that came out of the economic dislocation in 2008. emily: yahoo!, saying it will decide its next strategic step after the company reports earnings. according to reuters sources, the company also rebuffed several potential buyers for poor internet access. the business has been scrutinized over the past few
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months. star board values threatened ceo mercer mayer with the possibility of a proxy fight, unless the committee makes significant changes to its leadership and strategy. our bloomberg can jupiter paul kedrosky is here -- bloomberg contributing editor paul kedrosky is here. brian, the story is changing by the hour every day. things are changing. what do we know, what don't we know? ryne sandberg: the upcoming quarterly call is going to be in brian: the upcoming quarterly call is going to be interesting. -- she will say we are going to do this revamp to make the company strong again, that will be interesting. at efficiency, things like that. how it all shakes out? he don't know. that is why people aren't just did knowing what are you going to doing, marissa.
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emily: yahoo! is closer to considering selling off its core business to what happened here? it reminds me of this whole oregon militia thing. it feels like a hostage-taking. you have an executive team that has control with a bunch of assets. for reasons, including , thoseity and ego include the alibaba shares, it seems clear in terms of all of those pieces the company formerly known as yahoo!, they are all going to get the outside of this company, whether it is three months, six months, or 12. emily: mast this member met, that sounds bloody. what about alibaba?
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it a: some may call milestone. alibaba has this massive amount of valuation stuffed inside of yahoo!. of late, getting rid of this thing is becoming more inverted. just last month they said we are going to change course after a year. instead of doing a spinoff we are going to do a reverse spin. there are some changes that look like they are going to be happening. some people wanted it to happen more quickly than others. that is going to be a key driver, how fast is this all going to happen. paul: if there is not a clear path, you will see a proxy fight in the corner.
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>> yahoo! has dealt with a lot of investors before. i would not be surprised at all. it is no secret they know this is waiting in the wings, that investors are not happy. these decisions would be made. >> thank you so much, you are sticking with me. just tooon valley white to attract black coders? -- juste than an h car more than an hr concern.
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>> more highlights from davos, particularly how to find high-tech skilled workers.
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john chambers is rejoining the workforce. >> the first issue is where the money will come from to generate the opportunity. it will be medium-sized companies that will employ the changes. you have to develop a set of skills. how do you retrain in the internet of everything and we look at how you change the education system. can you imagine the french state partnering with a american high-tech company? it speaks to how dramatic the changes are. there are these big, beautiful ideas here in the
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mountains of switzerland. could all this get put on hold while some any companies can be put in survival mode while shares continue to lower? are smallpetitors startups. if you watch every ceo in the u.s., 90% know they have to become a digital company. only 10% have a plan to get there. if they do not change 40% will disappear. jamie dimon understands that. doug understand that at walmart. they will do this because it is survival. what happens if you do not change? >> do you mean this year will be the new position? >> there is like all changes in the economy. extremely well. we emerge from many challenges stronger.
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we have no competitors from 15 years ago who exist today. companies who are bigger and stronger, they are a shadow of where they were at that time. this is what every company has to do. you either disrupt or you will be disruptive and that is what leadership is about. cisco intends to partner in a way that no other company has ever done with all the major governments in the world and we are on our way to doing that. emily: with john chambers in davos. ♪ silicon valley has a diversity problem. a big one. many companies are attempting to
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correct it. following facebook's announcement of an internal program designed to manage unconscious bias. diversity figures are barely moving. doesn't silicon valley hire black coders? they found a of factors that could take decades to correct. sanchezme now, nicole and carla montour is a. let's put this into context. people at embedded howard university and there has been one higher from howard university. andbook and dropbox pinterest have gone there and hired no one. is silicon valley to white to attract like people?
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>> when you're talking about companies going out into an doing things for the pipeline as people call it, there is a presumption that the problem is with the students coming in and not with the companies themselves. if companies are not changing the very average of the way they are looking at recruiting, at inclusion within their teams then you are going to see the same things happening over and over again. the solutions have to be a lot more layered and nuanced than that. nicole: if you -- if a company wants to attract more diverse talent it is like a flywheel. the first few revolutions of trying to attract diverse talent are incredibly difficult. they take more energy. as you roof that you are serious about this and as your top talent from backgrounds that are underrepresented gets retained, they beget more diverse talent.
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those first few revolutions of the flywheel are where most companies are falling flat. racist?s silicon valley >> i think what is interesting about that question is that it assumes that a body of people is one thing, that they are all bad are all good. i think a lot of the work that has been done in the last year is nuanced -- the situation that we are in the middle of. emily: is that a yes? >> the systems at play are not built in a way that drums of inclusion. >> i would say it reflects the values of the united states overall and we say -- we see too much systemic racism embedded. emily: another problem and you alluded to this at the beginning. a group of people is blamed
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rather than the system itself or the people who are doing the hiring. the other thing that this article pointed out is the past code is white. why people, learn to code maybe blackeas people starting college and they are not as advanced when the graduate. we invest iny organizations because there is a bit of truth to that although to say that the problem is that what kids need to learn how to code earlier is taking on one piece of the puzzle. black girls code or hidden genius project. the will not help of pipeline is not fixed. if it leads to a sewer, who cares.
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emily: i was speaking with mike morris of sequoia about women in particular. he blamed the pipeline and said there is not enough women studying computer science. take a listen. >> we have many more working in our china is this then in the u.s. business. i think the issue begins in the high schools. where women particularly in america and in europe tend to elect not to study the sciences when they are 11 and 12. so suddenly the hiring pool is much smaller. emily: you think it is a pipeline problem question mark >> we look very hard. we hired a young woman from stanford who is every bit as if thereer peers and are more like her we will hire them. what we are not appear to do is to lower our standards.
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-- prepared to do is lower our standards. does that make your blood boil? >> a little bit. there is a big presumption that we know what the bar is. , we work with 40 companies across the portfolio companies, we worked with 70 companies over the time that we have been an organization. it is abundantly clear to us that we do not know what the bar is as a tech community. emily: it is clear there is a problem, there is disagreement about why the problem exists but notes that we know there is a solemn how do we fix it? quotas or see networking events or -- the list goes on. to try tosome anyways fix the problem. what is the number one thing that companies should do? >> it is not to just correct my
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title, our chief diversity officer is our ceo and he is asserting and he will continue to assert that. we do not have people with diversity in their title. become some else's job and i do not have to worry about it. point being that there is no single solution. that any director of diversity can bring upon a company and suddenly magically make it better. it is hundreds of things that add up to recruiting differently . hiring differently, retaining people, using different kinds of language, coming up with career paths for different types of people, changing your thing from the physical layout of a tech space to making sure you have decent parental leave policies. it is all these things that will fix the problem. when we relegate it to one department or we see hr will take care of that, it is never
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going to be sustainable or scalable inside a company. miami this is a problem glad you guys are tackling. we will continue to cover it. thank you both. president obama will ask congress for $95 million to hardened defenses against computer hacks. the governor -- government record was 20 million people was hacked in ane attack that some believe traces back to the chinese government. createnounced they will an agency to oversee contractors. 900 jobs could be on the line at vmware. it is eliminating positions under a restructuring plan. it is reeling from weaker bookings and concerns about the acquisition of its parent company, emc. emc is being acquired by dell
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and it is in the middle of a cost-cutting program. the job reductions may be announced on tuesday when they company report quarterly earnings or day before. so-called the seasonal price cuts are sticking around a lot longer than you might think. we will dig into the price war next. for ibm.eek tumbling to its lowest level in more than five years after a disappointing earnings report. ♪
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emily: did you know right sharing services are increasingly relying on older drivers to power their fleet? partners with aarp to
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recruit retirees. one big benefit, insurance stats show they have fewer crashes. bringing in the new year by lowering prices. the company announced it was cutting rates by 10% to 45% in one -- 100 cities across the country. this is the third year in a row fares.scounted are they seasonal and what is that doing to their bottom line? eric, layout your argument. you're saying that the price cuts will last longer and it will affect the bottom line. how so? >> yeah. the price cuts are seasonal in that january is a slow time. they want to increase demand which they think is good for the company and the drivers. if you look at the past price cuts, many of these cuts could
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ride forer fares per drivers. some of them will go back up not to the full rate and a couple went accept to where they were before they started. it is a way to shift down the fares and make it cheaper and drive demand. which obviously on a per ride bases cuts into the amount of money the drivers and over makes. was surging last night. if you were on wall street how would you be looking at uber? out?e finances work >> i am nervous about the financials. travis knows exactly the same thing that you and i are talking about. gamelieves that this is a that is a natural, it is not a
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natural monopoly. it isn't old ugly. there are not 100 different -likenies providing uber services. you can begin to bring prices back up and generally significant cash flow. i see these as part of the long-term strategies forcing people out of the market and making sure that the cash flows are there whenever there is a remnant couple of providers. llily: do you think lyft wi become a formidable rival? >> absolutely. they have the investments. and the cash on hand to withstand this price war. there is the two large players but there is this consolidation expects, living -- leaving us with competitors. is expanding their
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food delivery program. do you think this can become a significant revenue stream? >> at some point. $10 billionsed over and this is something base he is promising and fits into their logistics business. there is a lot of opportunity. some of the reaction from public markets about their competitors might be a little strong. it seems pretty far away. grubhub is down 10% on this news. do you see this becoming a big , can they takeer food delivery global? >> i think it is more of a trojan horse. this is an experiment in moving nonhuman things from point a to point b. we have been moving humans and there is this idea that it will
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turn into some form of career service. this is part of the further experimentation seeing what it is like to move urgent things from point a to point b. that has always been that conversation around this company is how quickly will they go there and that is part of the past. i would not focus on food delivery as being the endgame. tois a step along the way becoming a courier company. thank you. coming up, a wild weekend review by tech traders. we will to you who came out on top next. ♪
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emily: heartbreaking story gone viral. we are all too familiar with the
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that usually accompanies us and breakup that watching your heart rake in real time is no longer science fiction. internety sweeping the today after a tel aviv law theent's fitbit captured moment his boyfriend dumped him over the phone. his heart rate was an average seven to two beats a minute until he took the call. after his other have said it was over it shot up to 88 even hitting 118 at one point before going back to normal. another feature on your wearable technology. it was a wild week in the markets and tech stocks led the way. the s&p tech index and the s&p 100 sub moves. one stock, facebook which saw its weekly -- biggest weekly gains in two months. it is struggling -- dropping the subscription fee for whatsapp.
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what do you think are the most significant things that happened with facebook this week? >> the things that happened with facebook in terms of how it moves, the bottom line for the company, what happened was not that substantial. whatsapp cost them $19 billion to acquire that they had not done a whole lot with it in terms of generating revenue and now they are pulling virtually the only source of revenue which is that one dollar year subscription. whatsapp is operating independently from messenger and their other communications services which was terms of the deal to get this thing acquired. they still need to figure out how to make money from this thing. there was a sports feature that the added, you can track live sports which is cool as a sports consumer but this is something they should have had a long time ago. i do not think it will be a giant revenue source. it will be nice during the super
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bowl. apple, facebook, google can i do you see one of those is more stable than the rest, do you differentiate? >> hugely. this week was a good example. i will put netflix aside. i have some biases. , amazon, and google, those three in particular really look like not just -- google has been a survivor. in terms of having built a platform. including consolidating a bunch of these others who are not going anywhere. you will see a lot of consolidation. these three are three of the key consolidators that we will see in technology is twice 16 plays out. they recovered very quickly from the weakness in tech.
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that: bloomberg reported david einhorn is shorting netflix and amazon. >> trouble for netflix. emily: we saw a earnings this week, domestic soup -- subscribers not looking that great. see it when you talk to the company that they are emphasizing international now area they recently had the surprise announcement at the consumer electronics show that they were turning on something like 100 new countries. investors still want to see what is happening in their main market in the u.s. and things are slowing there. that is a problem because that is their core market. that is the highest end consumer. it is one of the most expensive places to subscribe and netflix biitself as the future tv
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and it is where hbo and showtime and these services are moving to this internet model of subscriptions. netflix is not going as fast as they want. emily: does david einhorn have it right? last was wrong on netflix year so let's give him another year to see if it works out. there are some huge gaining factors for netflix this year. there was a great data that came out of australia showing that they pulled in something like a year of traffic growth. this is fascinating. people stand back and say we cannot have that. that is a natural gait to growth. there not allowed to be entire pipe. emily: we will keep our eye on all. .hanks so much we leave you with someone who may be having the best day ever. washington post journalist jason
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-- jason rezaian is home. he had been recovering at a military hospital in germany. jeff bezos personally flew to rezaian andeet bring him home. he said he is looking forward to a warriors game or two and seeing star wars. welcome home. that does it for this edition of "bloomberg west." that is all today from san francisco. have a wonderful weekend. ♪
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>> from our studios in new york city, this is charlie rose. we began with politics. not to the latest on the twice 16 presidential race. sarah palin is back and campaigning for donald trump. one of the developments that has run-up to the ra caucuses. they are managing editors of bloomberg politics and the cohost of "with all due respect." at a cafe.


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