tv Bloomberg West Bloomberg April 19, 2016 11:00pm-12:01am EDT
♪ mark: let's begin with a check of your first word news. the taliban of claimed responsibility for a deadly attack on an elite government security agency in afghanistan. nearly 30 people were killed, 300 wounded in a car bombing and a four-hour gunbattle that followed. the united nations is urging the u.s. and russia to get the peace process back on track in syria. the plea follows an admission that a seven-week truce has effectively broken down. today is primary day in new york. hillary clinton voted early in westchester county. bernie sanders needs to win 68% of the remaining delegates to
clinch the nomination. if donald trump wins more than 50% of the vote statewide, it will put him in strong position to win all of new york 95 gop delegates. president obama is in route to saudi arabia but leaves behind a controversy that threatens relations between the kingdom and the united states. the issue is bipartisan legislation that would allow families of 9/11 victims to sue the saudis for any role the elements of the regime may have had in the attacks. the white house is opposed, saying it could expose americans overseas to legal risks. global news 24 hours a day powered by 2400 and more than 150 news bureaus around the world. bloomberg west is next. ♪
emily: i'm emily chang, and this is "bloomberg west." intel reveals a major restructuring, cutting as many as 12,000 jobs as the pc market heads for a fifth year of declines. we will take you to the details. yahoo! topping estimates as the preliminary bids come in for a company selloff. we will tell you what marissa mayer has to say about putting yahoo! on the block. from the courts to capitol hill, we speak to the congressman leading the charge striking the balance between privacy and national security. intel announces a major restructuring. the biggest chipmaker will cut 12,000 jobs or 11% of its workforce. shares were halted ahead of the report and now down to percent -- 2% in extended trading. intel announcing stacy smith will move to a new role as head of manufacturing and sales. the company reported sales of
just under $14 billion. year.from last the reorder comes with the pc market on track to decline for the fifth year in a row. how will intel reposition itself? joining me is cory johnson and start with cory. these are significant job cuts. what are your takeaways? cory: intel has handled acquisitions as well as looking at a changing market. the pc market selloff will not let up and they have to make changes there. the company is loath to lay off people. if you been working at intel for 10 years, you're one of the new kids. people spend their entire lives at silicon valley.
emily: we have been listening to the ceo on the earnings call. take a listen to what he had to say about this. >> it is absolutely a situation where we are structuring to allow ourselves to invest at a faster rate. in those growth areas. if you take a look at it, 2016 to 2015 in the areas of memory, technology, bio t, data sensor, we were investing more in 2016 then in 2015. emily: these job cuts were long overdue. so whyou agree, and if did they take so long?
anand: one of the things with intel is that it remains a top line perspective. they been able to outperform pc chip sales that have done better than pc shipments. that relative story can't keep up. what has been working is the data center market. they have done really well. ofis a bigger portion operating, a smaller portion of sales. this is a hard pivot. it is a long time coming. emily: promoted a president, stacy smith is moving into a new role. cory: and stacy smith staying cfo and renee james president -- that did not work. james did not last terribly long. so that was a big change right there. ist has been interesting watching him bring outside
talent, something intel did not do historically. it rubbed people the wrong way. clearly, a decision is being made that they need to run things very differently. really stepping up to a lot more responsibility. they are seeing the construction of the most important jobs that they will be in charge of. it's a big step up for him. and that role under stacy smith might be more important. stepping into this very big role as a company. emily: there has been discussion that intel chips may end up in the iphone-7. which would be the first time we see intel chips in an iphone. is there truth to that?
anand: look, it is still speculation and this would be a huge coup if that were to happen. look, they've got to fix the gaming mobile business, there are parts that brian talked about. elements of the pc segment that are still growing set-top boxes. areas that are still known, it is worthy of investment. but you have to find those areas. it's not as large as the pc segment. right-sizee to that. they are well behind qualcomm. they have hired a senior executive. still a lot of work to be done. emily: what is the future of intel? is it the internet of things? what is the future of this company? cory: i think the internet of things is an area of focus.
they would like to have the right chips for the iphone but beyond that, when intel makes plans, they plan so far out. they are thinking of things that will be largely functional 5, 8, 10 years from now. when they talk about the internet of things, it is really twofold. they still want to be in the data centers that are processing all of those mountains of data. and they are already doing that stuff. that is something trying to -- brian sees as the future of this company. from making calculator chips to personal computers, i think they see it as a whole future of computing. and a future for intel. emily: cory johnson will be sticking with me to talk about yahoo! next. coming up, as i said, yahoo! out with earnings just as the bids come in.
♪ emily: a story we are watching, selling more than $1 billion worth of facebook shares according to filings with the sec. he sold his mobile messaging app to facebook for $22 billion and has an estimated net worth of more than $9 billion. facebook shares have risen 12%. yahoo! shares dipping slightly
in extended trading after the company released earnings that slightly topped wall street's week expectations. revenue excluding partner websites declined 18% to $860 million. the earnings call quickly turned to the company's possible sale with bids from verizon, tpg, and yp. marissa meyer said the sale is the top priority. marissa: we have made the sale our top priority. comprised of independent directors and strategic transactions are leaving -- leading a well-run process to achieve the best possible outcome. the management team and i have supported the board's process from the start and we are moving expeditiously. emily: joining me from toronto, eric jackson. from new york, cory johnson, and securities managing director who
covers yahoo!. we heard more from her about the sales process dan i think we expected to. what is your take? >> we were very surprised. they were very engaged in the process. they were very prompt in providing data. these are things we heard on the fringe that yahoo! was not doing. to directly defend the process was positive. we mentioned that what we want to do is really maximize shareholder value. that's what got investors more interested. emily: she did say we will not hear much more about it from this point on. take a listen to what she had to say. marissa: over the past two months, we have spent time with interested participants including some of the most well-known and respected names in the industry. we have been responsive and engaging answering hundreds of
questions and requests for information. we have a well-defined and aggressive calendar. in order to preserve the value and integrity of the process, we do not intend to provide future updates or comments on specific details. emily: you are one of many investors advocating for change. are you satisfied with what she had to say? >> if you think about it from her perspective, if things don't work out later and she is facing a shareholder lawsuit, she has to have a trail that shows that she publicly stated that they were doing everything they could do. what she said it does not square with comments i have heard and
people i have spoken with that have knowledge about the bidders that have engaged in the process. emily: we have heard from starboard that they are setting the stage for a proxy fight. they are considering not replacing the entire board but some of the board. how much could that cost them? cory: i think it's about the size but more importantly, yahoo! has some very advanced plan. even though they are very far down the road, they may not execute it. if the bidding is going poorly, maybe they won't sell those assets. i think starwood would not want them to do that either. investors would be livid. i expect them to pursue this with gusto. emily: they are loading some
nonstrategic assets. we spoke to another that said nobody cares about the fundamentals of the business right now. would you go that? >> it has been structurally in decline for a long time. there is value of yahoo! being part of a bigger organization. you can see a lot of cost and revenue synergies. this is a small fish that really has been overrun by google and facebook. i think yahoo! should -- i think it can have a lot more value, a lot more synergy from a revenue perspective. i think it would be a win-win for everyone.
emily: verizon, yp, formerly yellowpages.com and tpg. what is the best case scenario at this point? >> i think verizon's head and shoulders above those on that list. i don't really see yp as a serious contender for the same reason daily mail or time inc would have been a serious contender, they just don't have the resources to make a full bid for this company. prime equity is interesting and from an amusement point of view, i would be interested in seeing them succeed. they could get a chance at buying this business back from marissa. verizon has the most resources to throw at yahoo! if they want it. getting the most value, they are the most cost synergies there. emily: we will continue to watch
♪ emily: two tech stocks on the move. ibm slumping the most after forecasting second-quarter profit. seen as a sign, the efforts to lead in the cloud and artificial intelligence are not stopping a four-year sales slump. declining also, ebay citing signs of weakness and increased competition from amazon. how much will technology and automation disrupt industry as we know it? with driverless cars and
chatterbox with things humans normally do. theirew industries take or are we looking at a future of higher unemployment. it is known as universal basic income. they would receive a monthly cash grant. they are funding research on the subject. another has be a long-term proponent of the issue. pilot projects are in the works in the netherlands, and the swiss will join them next year. it is on a basic income bill next year. what will the future of work look like. also formerly senior advisor of \the state department. you have thought about this, so what is the verdict? how much will technology and automation change the employment
outlook and in what industries? alec: it will change the employment outlook pretty significantly and pretty much in all industries. they end up utopian, everything will be ok or dystopian with eyes closed. the reality is much more of the middle. labor in the united states, the labor markets will remain strong. it will require some difficult pivots. there are segments of the american working class for whom i think it will be especially tough. people who have done work that is largely manual and routine, it will be increasingly eliminated. transportation. if you think about things like autonomous vehicles, you're talking about literally the number one source of employment for men in the united states. when you think about men without college degrees, it is far and
away number one. emily: some say driverless cars are happening soon. alec: this is a process. let's take driverless cars out of it for a second and think about in general the combination of artificial intelligence and robotics. we are at the beginning of the next wave of automation. it largely replaced labor working in sports factories. just doing labor there was manual. it is also cognitive and nonroutine. people who go to work wearing white shirts, red ties, pinstripe suits.
it is already happening. we will lose a few million jobs over the next couple years. are we actually at the headquarter cities? do we exported to the rest of the rest of the world? is the source of growth and tension elsewhere -- will it hit us altogether? emily: what about a universal basic where everybody gets a fixed sum of money a month? >> it is good that people are talking about this. i give albert and sam credit for thinking about it. the last major expansion of an entitlement program we had was obamacare. and people went bananas. a universal basic income is obamacare times 50. it is good that coastal elites are starting to study this. they were also supportive of obama care. if you look at the angry reaction to obama care, multiply that by 50 and you have what the response to a universal basic income would be.
emily: is it completely unrealistic? alec: for the next 10 years, it is. as we simultaneously have an economy that produces more billionaires, more super wealthy people along with higher structural unemployment, perhaps the resistance to such a thing goes down. but it will take a while. emily: you work for hillary clinton and you continue to support her but income inequality has become a huge issue. what does hillary think about this issue? alec: it is why she is running for president. emily: would she support universal basic income? alec: i think she supports safety net expansion which this is a type of. keeping the programs we have in place from being gutted by the political far right. i think there is offense to be done but first, she has to play defense.
emily: what about the left? the new york primary is happening now. are you surprised by the continued momentum of bernie sanders? alec: i am. if you had told me a year and a half or two years ago that three of the four remaining candidates would be two fascists and a socialist, i would think that was crazy. but to understand where their support comes from and understand why people are supporting fascists or why people are supporting a socialist. emily: very interested to see how the election continues to play out. thank you for joining us, as always. author of "industries of the future." a new york times best seller. we are focused on fireworks on capitol hill as the fight between apple and the government continues.
we did not announce we were going to supply pascoe generation i code. three allegations, those allegations have no merit. emily: earlier, i talked to tim murphy and asked him whether he was sent right with what he heard. solid am not certain a conclusions. law enforcement made it clear they need a mechanism to track the bad guys whether they are terrorists who have acted on or are planning future attacks, child predators, kidnappers, murderers, who may have used computers or cell phones to send messages back and forth to collect child pornography, etc.. they have made it clear they need help and the tech community did not offer a solution except to say, look at the wonderful things we can do. i get that. it would be wonderful to be able
thate technology, we want encrypted. we need that encrypted. but when it comes time to dealing with dangers of life in our world today, they did not thatany things to offer in is still an area we need to work on. emily: do you think they need to make more compromises? >> i think they need to offer more solutions. what there is a situation with a child predator? what do we do? he proceeded to tom albeit wonderful things they are doing. that is good, but i have no idea what white you are talking about in terms of solving this problem. i would be glad to get them in a room with the you i if we could. they have to work something out. emily: when it comes to a middle ground, apple says that there is no middle ground and the
government obviously wants to find one. everybody says, form a commission. will a commission find a solution to a problem this complicated? him, the told committee we have is the investigating committee and and we want someone to come up with an idea and appellees to take some responsibility, as do other companies. -- apple needs to take some responsibility as do other companies. up atok did not even show the hearing. they need to step up and say that they recognize this is an ethical issue. we understand, for the sake of the customers, they want to maintain the encryption. there are times when the safety of society and family members need to be something we pay attention to. they cannot walk away from that and say it is not a problem. it is. it is the same as having a faulty lock on a building. you got to find somebody who can find a better lock to make
people safe in the community. they cannot just walk away and say it is someone else's problem. we want them to understand that this is a question that we all have to deal with. mi: the technology companies are saying that any backdoor is a backdoor to bad guys. what does the middle ground look like to you? what does a solution look like? tim what is amazing to me is : that you have people who get paid salaries and do work for a living and it is incredible, the amazing technology they have, that increase every month and they figure out a solution and say, it is not on my resume. these are brilliant minds. come together and figure out a way to have this. most people have a key. there could be solutions to this. i do not think the answer is to say, we are ignorant of how to do this. these are smart people. let's get them to work on this. emily: what is your view on this
bill that would force companies to help in these situations? tim: what is going to happen is, in a situation where we ask them to use their genius and talent to help us find a solution, they do not have to worry about crime and ethics and issues of saving lives and terrorism. that is not what they get paid to do. but, if they do not come up with a solution, a solution will be imposed upon them. tech companies need to say, we have an ethical obligation and we are on this planet together, doing things together. that is what we want them to understand, the greater good they need to focus on. if they are not going to help, i think bills like feinstein's will have legs going forward. i think this is what we have to think of it.
emily: tim murphy on the apple encryption hearing earlier. the company has hired a vice president to work on the electric car initiative. they did not specify where they got the information. he becomes the most senior "car guy." apple has never confirmed that they are developing a car. they are putting robotics to work on the project. we are watching lexmark. they are being acquired. this is an all-cash deal that comes in at $3.6 billion. the merger was approved by
own natural defenses. >> we have had effective ways to treat cancer over the last 100 years -- surgery, radiation therapy, chemotherapy. despite the best applications, people in america that die of cancer number 580,000 every year. we need additional ways to treat cancer and we have been developing immunotherapy as a way to join radiation and chemotherapy. sam: this is dr. rosenberg. he has had a prestigious career. there is a new way to make surgery obsolete.
>> immunotherapy does not use a scalpel or external forces on the body. it attempts to modify the immune system to fight cancer. the body's natural defenses protects against foreign invaders. the body recognizes cancer as foreign, but not a strong enough reaction to eliminate those cancers. to goal of immunotherapy is stimulate the body to cause those cancers to disappear. when i started working, there was no effective therapy and the first therapy developed was in 1976. we treated 66 over the course of many years to find the best way to stimulate the immune system. 66 consecutive patients died. linda is now alive, 30 years later. she had widespread melanoma.
she was the first of many to show a response to immunotherapy. sam: it was only effective for a small number of patients, but it proved the idea could work. he and his team have spent the last 30 years trying to improve the treatment. recently, they had a breakthrough with genetic engineering. they can take immune cells and reprogram them to fight cancer. >> we can isolate the warriors of the body and introduce genes to give them a property that recognizes and destroys cancer. we can expand those for patients.
>> dr. rosenberg has had success with this treatment and it has caused regression in 70% of lymphoma patients in trials. it is an exciting moment that dr. rosenberg has pioneered and it has taken over 40 years for him to get to this point. he is the first to say that any talk of a cure is a way off. >> the problem is that it does not always work. with solid tumors, it works less well than blood cell tumors. we are looking at the common
solid cancers such as those in the colon, ovaries, and prostates. until we can apply the treatment to all, there is plenty of work to be done. ♪ emily: sam joins us now from new york. how far along our way to this being used outside of small trials and on a bigger scale? sam: i asked rosenberg and it is still experimental. moving closer to an eventual release. we're looking at a matter of years. something more than that year. probably the next 4-8 years, we will see this therapy used more widely. emily: immunotherapy targeted towards cancer united competing institutions. how many different scientists are looking at this kind of therapy and treatment in particular?
sam: it is the most promising approach we have found to battle cancer. there are endeavors underway at johns hopkins and mass general. it has been picked up by the community as a way forward. nobody has found anything better and the results have been promising. emily: what about the other kinds of cancers? breast cancer, lung cancer? limitationsre the dr. rosenberg was talking about.
it has proven effective with soft cancers of the blood and lymph nodes. the solid cancers, the breast cancer, prostate, they have yet to be fully addressed by immunotherapy and that is the next frontier for this technology. emily: all right. great piece. thank you so much for joining us. last month was the hottest march in 137 years of record company -- of record-keeping. this is the 11th the straight month that we have seen a new record set. while it might seem early to be talkinig about a new annual record four months into the year and gavin schmidt is out with a prediction. he estimates that it is a greater than 99% chance of a new record in 2016. 15 of the 16 hottest years ever measured have happened in this century.
♪ >> david boyd is defending the ceo and says that she has the scientific skills to read the -- to lead the blood-testing startup despite the investigations. at one point, theranos was using just a few drops of blood. there are reports that technology may not work and they have failed to provide the data to prove this, so far. google could be underscore new from antitrust authorities for the smartphone business. regulators are expected to bring charges on wednesday that could force google to change the way they preload the search engine
on phones. analysts say it will be harder for them to make money off of advertisements. they say the concern is that, by users to decide what they will load, google may limit a way -- can you put this investigation into context for us in the context of other cases? the eu competition commissioner has been aggressive on these issues. >> yes. really. this contrasts with previous charges against google by her, which were more narrow and related to the search function operation and the allegation that it favors comparative shopping results. what they are looking at is the
way that google does business on smartphones and tablets that use the android app, alleging that google unlawfully bundles desirable apps and blocks out competitors and stifles innovations for apps and operating systems. emily: i spoke with the head of android about this case and he says that he thinks that the regulators are confused. take a listen. >> we think that there is a lot of confusion with how this works and it is a new type of ecosystem that did not exist before, an open source ecosystem where manufacturers customize their own product.
emily: why isn't the eu buying this argument? jennifer: they are probably paying attention, because they stay abreast of the changes and with the times. at the end of the day, they are looking at laws that abuse the dominant position and they see android with a high percentage of market shares and most phones using the system. you know, they see possible abuse of that position and the stifling of competition and the stifling of other technological innovations and that is what they are focused on. emily: what are the possible penalties here and what could google be looking at? jennifer: we always see the top ceiling, which could be a fine. it rarely happens. it is the outer limit and the eu
for abuse of dominance cases has never gone that far. i believe that the intel fine was for the abuse of a dominant position and it ended up being about 4% of revenue. they may fine google less than 10% or ask them to unbundle. emily: we will watch for charges as early as tomorrow. thank you so much for the update. >> thank you. emily: time to find out who is having the best day ever. today, we are feeling the bern. according to silicon valley, bernie is feeling the bern from silicon valley. according to data from the federal election company which