tv Bloomberg West Bloomberg April 29, 2016 11:00pm-12:01am EDT
let's begin of your first news. an attack on a hospital in afghanistan that left 42 people dead occurred because of the rules of engagement and the laws of armed conflict were not followed according to the head of the u.s. central command. the investigation did not conclude that this amounted to a war crime. war crimes is reserved for intentionally acts, targeting civilians or intentionally targeted protected objects or locations. comes days after doctorshospital run by
without borders was leveled by attack. the airstrike blamed on government forces left 50 people dead. a less than welcome greeting for donald trump in burlingame, california. protesters fought with police and knocked down barriers. thee arrived to address state gop convention. he said his entrance was like crossing the border. in kenya, search and rescue teams are made at the site of a six-story building collapse. four people are hospitalized and others are trapped beneath the rubble because of the high housing, some developers bypassed building regulations to cut costs and maximize profits. i'm mark crumpton at bloomberg world headquarters in new york. " bloomberg west" is next.
emily: i am emily chang, and this is "bloomberg west." it has been a dramatic week for tech stocks. apple sending the s&p 500 to its lowest drop since february with amazon checking in for its best profit yet. plus, the app pulled off a big-time coup today, scoring a one every kind of deal. will snapchat revolutionized the way we watch the olympics? the onslaught of earnings continues. we'll hear from the ceos of linkedin and pandora. their vision for a pass for a path forward. we have now gotten financial updates on some of the biggest tech companies. for some, investors may remember this week as a time momentum really shifted one way or another. for facebook, earnings gave mark zuckerberg the chance to ask for more freedom. on the other hand, twitter ceo jack dorsey is under more pressure than ever. perhaps a better example of
divergence in tech stories is apple and amazon. apple's first sales decline in 13 years marked an end to an unprecedented growth streak that lasted 51 straight quarters. $51 billion market cap in one hour the next day. the knockout punch, billionaire carl icahn saying there is no more money for apple stocks. amazon posting its most profitable quarter in 20 years, giving ceo jeff bezos the title of world's fourth richest once again. for more, bloomberg staff reporter jeffrey c only, kathy would in new york, and jeff in san diego. what is the most significant about what we saw this week? >> the biggest story ended up being apple. it is down seven straight days.
it lost 11% over the past five days. what happened was, after the market closed tuesday, the stock was down about 6.3% on wednesday. it wasn't until thursday that we really saw apple hit the red and start dragging down the rest of the market. carl icahn, had about 2:00 p.m. eastern on tuesday, said he sold most of his apple shares, which is an about-face for investor who, even as recently as last year, was saying the market cap could go up. it is really the inflection point that we saw with the s&p that drag us down about 1.5% for the week. emily: i believe icahn, at the time, spend some time with tim cook. >> you believe that it could be a major inflection point?
>> yes, i think so. carl icahn is in trouble anyway, so let's take carl off the table. specifically the decline in terms of revenues and the iphone itself, that is the end of an era. it is happening across smart devices and mobile phones in general. the years of hypergrowth are over. an awful lot of what has happened in technology right down to the app the economy over the last 10 years. amazon, in late 2014, really turned a corner on amazon web services, something they have been investing in for the better part of a decade. that is now an engine of growth and profit. 60% year-over-year growth on what will probably be a $10 billion business, according to
jeff bezos. it is kind of going to turn into the kind of death star for other companies that apple was four or five years ago, sucking revenues and profits. at 5:00 p.m., oracle and a host of others. we are seeing this kind of change of leadership. emily: kathy, you hold amazon and also apple. what is your take on this idea? kathy: we have been prepared for some weakness here as we transition from one to the next. we have a debate within our firm, but we believe that apple, our next generation web team thinks that apple could become more of a recurring revenue model if it moves to this $32 per month you pay and you get an upgrade every year. if they can do that and bring on services, which actually
accelerated this last quarter, if they can get services going and get this idea going that apple can be a recurring revenue model and not a boom-bust kind of model, then we think the multiple, which is very low, could expand. they have their app store, streaming music. we think there is a little more hope there than other people believe. emily: let's talk about jack dorsey having a great week with square and a not so great week with twitter. the cofounder of twitter was on earlier this week and had this to say about how long a turnaround will take. >> do you think things have gone into a some kind of time chamber with a master ceo advisor and come out 40 years? he is like super good at this now. emily: do you think it will take a decade? biz: it could take longer than six months.
give it a couple of years. i am holding on to my equity, that's for sure. emily: just ahead of that, biz said jack thinks in decades, wall street thinks in quarters. paul: it is a lovely thought but sort of a soft statement. if you really want to spend time, do it public. that is really what has to happen here. we are many years of change before we see a new twitter emerge. i think it is a very naïve way of thinking about how investors look at your company. it is something i have a lot of trouble with. emily: i want to talk about facebook, which crushed it. mark zuckerberg asked for a new class of stocks. i asked what that actually means.
>> i think a new class is a tricky issue. when things are going well, it is a good thing. when things aren't going so well, it can be a bad thing. at this particular juncture, i think he has earned the right to continue to steer the ship because he is steering in a great way. emily: what is your reaction to that? cathie: he has done such an amazing job. he has kept his eye on the ball. engagement, artificial intelligence. they will use that to continue maximizing engagement, continue people spending time with facebook, moving from 50 minutes to, he hopes, hours. i think he has done a great job and he will make some tough moves like buying whatsapp, from time to time, but they end up being the right moves. emily: they say he will be making more bold moves in the future.
emily: in today's revolving door, cypress semiconductors ceo tj rodgers is exiting the company he founded. the changing of the guard comes with an admission from the 68-year-old industry legend that he didn't want to continue being tied down with operating a 7000 employee company. rogers says the first quarter
report, his 120th, would be his last. this summer, when the time comes to watch the olympics, you may tune in via snapchat. the social messaging app has reached a deal with comcast-nbc to share highlights on a designated channel curated by buzzfeed. this will be the first time that transmission of the lipids will happen on a mobile platform. they have reached a demographic in the united states and they say snapchat is important to assemble the large audience that will show up to watch the olympics. snapchat said users watch 10 billion videos on the app every day. here to discuss is our bloomberg intelligence analyst and our media reporter, jerry smith, in new york. how unusual is it that comcast
would give away olympic highlights for free to a company like snapchat? gerry: this is actually the first time that nbc has, as you said, given away programming for the olympics. they spend a lot of money getting the rights for this and they are very protective of it. i think nbc and a lot of other media companies are realizing that younger audiences are not really watching television the way they used to. they are doing a partnership with snapchat to sort of entice them. they are on snapchat, watching some of these user created videos, and nbc is betting that this will entice them to also tune in to watch the olympics live. emily: do you feel that they would also share advertising revenue? gerry: that's right. there is advertising opportunities here as well. that is a big thing that snapchat is really trying to convince media companies is that
we have this huge audience of young people and we can also sell ads that way. emily: earlier this week, you expressed skepticism about snapchat's ability to scale enough to justify a $60 billion valuation. does this change your mind? jitendra: viacom, sharing of ad revenues with them, and now nbc. it is great that the content cycle is growing. obviously, the younger audiences there. the problem with scaling is that you need to have this platform to be a lot more programmatic. if you look at marketer surveys, they suggest that there is more work to be done on measurement that they can derive out of these platforms. there is some risk in terms of like meeting those expectations longer-term. they should be fine with these
deals on going. they need to really execute on making a platform more programmatic. emily: a partnership with snapchat will be happening via buzzfeed, which nbc is an investor in. what do you make of this sort of new media company that comcast is becoming relative to a company like disney? gerry: if you think of comcast, it really started as a cable company. they sold you cable tv service. that is a business that is really maturing. there is a certain amount of cord cutting going on where people cancel their tv service. they are kind of looking for growth from other divisions. they are really looking to compete with disney in animated films and theme parks. the buzzfeed deal -- buzzfeed is going to be working with nbc
during the olympics. that is a $200 million deal that they made with buzzfeed last year. this is one of the first times where nbc is planning to use that invest the with buzzfeed to try and reach younger audiences, people on snapchat, young people online who aren't watching television as much. emily: it is fascinating to watch. thank you both. coming up, linkedin reporting a healthy quarter, but what more can they do took salary growth? we hear from the ceo, next. ♪
volatility, we will leave that to the market. they determine the day-to-day price, and we determine the long-term value through execution. we are going to continue to focus on executing the business. it was a positive quarter for us. we were able to focus on fewer things done better. we saw the consumer engagement accelerate by virtue of a new application we launched, which also accelerated our desktop growth. we continue to focus on our core business product, such as recruiter and sponsored content. emily: why using linkedin shares have been so volatile after earnings? it seems like investors have such a strong reaction. jeff: you would have to ask the investors. i understand volatility, and at
times we're going to do our best try to provide as much visibility as we can into the business. as our business continues to grow, we are introducing something additional lines, and i think it takes time to have people learn those businesses and calibrate expectations. emily: you said that the addressable market for linkedin is $12 billion. you are penetrated about 20% there. if the market is large and penetration is low, why can't you grow that business faster, like a facebook? jeff: the objective is to grow the business faster over time. we are investing in our recruiter application.
we just rolled out the next generation version of that application. it is a complete overhaul, the largest overhaul of its kind in the seven years we have been operating that product. we just rolled out to new skews, and we see a growth catalyst in our career pages. we have also been investing in our job seeker application and the active job seeker use case on linkedin. that has become one of the fastest-growing parts of the site. all of this should help future growth. emily: that is two thirds of your business. would you say that the business is now mature or saturated because growth is decelerating? jeff: hardly saturated. there is multi-billion dollars that we believe we could further penetrate by virtue of these new products that we are rolling out and improvements to existing products. positive growth ahead. emily: let's talk about mobile
engagement that is driving the ad business. how much do you see growth accelerating in a digital ad market where facebook and google are king? jeff: we are focused on the b to b components of that. we think we bring unique data and context. sponsored content has been our fastest growing scale at this time. growth drivers continue to be acceleration of engagement, engaged sessions, which generates the inventory for our sponsored content business, we're seeing increase in the
number of customers who are sticking around and purchasing more. improvements to targeting. we're going to continue to develop and improve our apis. we are starting to pile off network sales of sponsored content as well. all of those things could contribute to future growth in that part of the business. emily: let's talk about china. you have 20 million members now, more than the 18 million a couple of months ago. you have developed a china team. when we spoke, you said that you have hardly cracked the core -- cracked the code, i should say. what would it take to crack the code? jeff: we're going to continue to learn the best way to meet the needs of members and customers in the market as long as we are there. we started by localizing the
global platform. we have been seeing very strong growth in terms of new members. we also launched the first localized application in china and recently, we saw sign-ups growing in parallel with the core platform, which was very encouraging. we are just going to continue to learn. we have a very talented team in place, and as we continue to grow the membership, we are now increasingly turning our attention to engagement. once that reaches critical mass, we will focus more on modernization. emily: at what point will we see the scale contribute more meaningfully to the business? jeff: it is contributing today. it is still early days. i think everyone would like self navigator and our sales solution business to replicate the success and growth trajectory of recruiter. our talent solution business is now well north of $2 billion.
it is a hard act to follow, but we had a great team in place and i feel we're off to a strong start. emily: given that linkedin is becoming more of a mature company, do you need to hire some more enterprise, sales focus people who can take the business to the next level? jeff: i definitely think we have the right team in place. it is really a portfolio of products at this point. we have high growth products, durable growth products, and we're going to continue to invest in those opportunities. the areas of more durable growth, we are focused more on marginal expansion. i think we have exact team in place to make both of those things possible. emily: how would you describe the macro environment? we have seen other tech companies take a hit due to currency issues, for example.
jeff: we haven't seen any material impact to the business. as a matter of fact, after the first quarter, or going into the first quarter i should say, we talked a little bit about some challenges in the asia-pacific. in india, we actually saw strength across all of our business lines. we didn't really see any impact macroeconomic forces. emily: my conversation with linkedin ceo jeff weiner. pandora is about to get louder after losing much revenue over the past year. ♪
mark: indiana governor mike pence is endorsing ted cruz for president. ted cruz need a victory and next week's primary after getting swept by donald trump and five northeastern states on tuesday. my decision who i am supportive. i not against anybody but i will be voting for ted cruz in the primary. the endorsement marks a setback for mr. trump. loretta lynch says the justice department has not set a deadline for the investigation into former secretary of state hillary clinton's use of private
e-mail to send personal and work correspondence to achieve made her comments to al hunt during an interview on "charlie rose." them to do ato thorough review. we have to be full, author of, fair and independent. and we do not make predictions because that is, that cuts off the independence. of that. we don't predict the timing of any of our matters. mark: you can see the entire interview tonight on "charlie p.m. at 7:00 amdnd 10:00 toce president is en route washington following talks with the italian prime minister. italy, the united states, and other countries are struggling to deal with the instability in libya that has fueled the rise of islamic state in the country. mr. biden also met with pope francis as they prepared to give separate remarks on a conference
on regenerative medicine. a search operation is over following a western -- a helicopter crash. all 13 are in board are presumed dead. the helicopter was carrying people from an offshore oil field. the their wish and aviation authorities says it is banning all similar helicopters from flying. king harald and queen sonja are chip tong their sweden because the crash. puerto rico's health secretary says it the island has recorded the first zika related death. the 70-year-old man died in february. u.s. territory has received 600 zika cases. todayent obama announced when he called common sense steps to curb gun violence. include identify requirements at so-called smart guns would have to meet for law enforcement agencies to buy and use them. and enhanceded new
safety technology to prevent accidental shootings or track down a missing gun. officials expect to complete the process by october. global news 24 is a day powered by our 2400 journalists in bureaus all over the world. i am mark crumpton in new york. emily: this is "bloomberg west." shares surged in pandora's trading after an update. listening hours rose classroom percent from a year ago. the stock surge comes at a crucial time for the company, having outlined inexpensive five-year strategy to send off spotify and apple music in february and bring back tim westergren as ceo. i asked him why he was back. tim: i love the company. i have been active. i feel sort of connected,
genetically, to the company. i feel like it is the right time for me to take the role. the strategy is intact. the same plan we declared in january is the same plan now. working to build from this huge foundation that we have created, this massive ad supported radio product, and expanded into new features. emily: we reported that pandora had explored a sale earlier this year? tim: it is. ahead. we spent 10 years building the underpinnings of a really big business. that is where we are headed. emily: in the corner, active listeners ticked up, but still not a huge increase. what will it take to drive that growth even faster? tim: we have 100 million people come to pandora every three
months, and about 80 million every month. the first half is, how you make those quarterly listeners monthly listeners, and then make daily listeners. a big catalyst for us is ce and auto, making it a habit in more places. we will start rolling out some or expansive features, more on demand, that will allow us to provide for all the things they want a music in one spot. i think unique listeners, because they hear a song on pandora and they want to rewind it, we want to keep them on pandora. we are going to add live events, which will sort of activity completeness of the experience. emily: a great stat -- millennials spend more time on pandora than youtube. still, the stock has dropped one and 40% over last year. what is it that investors aren't getting? tim: there is a lot of misperception, and that is my
job to make sure the story is clear. the engine that drives our song collection, it is a fantastically hard problem. even as we have had a lot of competition, hour per listener per hour has continued to increase. i think that is a reflection of this massive investment we have made in personalization. the second thing is monetization. we monetize our product. those are two strategic pillars for us. i don't think they are well understood, actually. i think we're going to connect the dots in the coming months. emily: what are your plans for an on-demand product, where listeners would choose what comes on next? tim: the way you think about it
is, the sort of 30 million songs in a search box approach is not how we are going to come to this. we have people to come to pandora and we know a ton about them. we have all the sort of precise information about your preferences, so we can bring you into this interactive environment in a contextually relevant way. take you into music you already know, create playlists. solving that problem of walking into the record store where you can have everything, what do you do? like a version 2 of on demand. emily: are the labels asking for the same rate that they give spotify, 70%? jeff: i would expect it will be in the same ballpark. we have a slightly different approach.
we are hoping the labels will look sort of to be flexible on how the products can come to market. i think one of the great opportunities pandora has is to address this huge, tens of millions of listeners who are not the $10 subscribers and haven't really thought about it, to introduce them to premium services, to upsell this middle of listeners. if we have some flexibility there, i think we can really expand the industry. emily: you said pandora is about to get louder with its advertising. tim: it is time for us to sort of state our claim. we account for more users than youtube. we need to be louder at this time, at this majority in our size. it means to be a stronger marketing presence, we are investing more in marketing this year. as we rollout products, you will see us be more vocal about that and declare what we're doing.
emily: beyoncé just drop in entire album on tidal, with exclusive streaming rights. could that change the future for tidal? we are seeing more and more artist rebelling against streaming services. tim: you will see a handful of artists like beyoncé, who have the stature to do those kinds of things. i don't think it will be a trend. i don't think that will stretch beyond sort of the top artist. emily: my interview with newly reinstated pandora ceo tim westergren. fitbit, the fitness tracker, just won a ruling that knocked out the last disputes that the u.s. trade agency. the ruling today lessens the chance of an import ban. fitbit currently makes its fitness trackers overseas and
emily: cars and trucks make up about 22% of u.s. climate pollution and 17% globally. so, fighting climate change comprehensively will mean gradually reducing that to zero with new vehicles with clean technology and power. electric vehicles could one day be the answer to truly cleaner cars, but for now, the way electric vehicles get their
power may be dirtier than you think. >> here is a fact -- we need cleaner cars of we want to slow down climate change. cars and trucks produce almost one quarter of u.s. gas emissions in the u.s.. the road to clean cars might be longer and dirtier than you think. here's the situation. back in the 90's, europe pushed more diesel cars with tax incentives. the problem is, while diesel engines produce less than gas engines, they produced a number of harmful pollutants such as nitrogen oxide. the u.s. gave $1 billion to the u.s. auto industry to develop a car that could drive 80 miles to the gallon. that never materialized. 20 years later, the average fuel economy of cars sold in the u.s. is just over 20 miles a gallon. companies have been betting on electric cars.
>> why are we making electric cars? it is because it is very important to accelerate the transition to sustainable transport. >> tesla boss elon musk says electric cars are cleaner than the gas driving counterparts, and are the fastest way to reduce emissions in the transportation sector. some questions whether they are all that clean, pointing out that they often charge their batteries from electricity in coal burning plants. that is changing as electric grids get greener and increased power demand from electric cars could drive investment in clean energy. but, transforming the world's power grid could take decades. critics say emissions like europe's diesel push and the u.s. supercar show the danger of
governments trying to pick winning technologies. but, advocates of fuel-efficient cars point to california, where rebates to consumers and regulations on manufacturers encourage cleaner technologies. in china, sales of electric vehicles are growing rapidly. not so in india. huge demand for new cars in these countries could quickly cancel the progress of the quest for cleaner cars. emily: so, which car companies are leading the race to bring electric vehicles to market? ford announced its plan to release an electric vehicle that would go to hundred miles without a charge and can be with tesla's model 3. tim, which will be first to market, ford's 200 mile electric car or the model 3? tim: i think tesla is winning the race by creating excitement. you have the model s, which is fun, but also very expensive. that is what the promise of the model 3 is therefore, kind of a mass-market vehicle that goes 200 miles between charges and sells in the $35,000 range. the comments by ford's ceo says that they want to play in that field with tesla, gm, nissan. emily: we did speak with the ford ceo this week. >> when you look at battery electric, plug-in hybrid, and full hybrid vehicles, we are the
number two seller in the u.s. across the board of electric vehicles, and the number one seller of plug-in hybrids. we are also investing another $4.5 billion in electric vehicles between now and the end of the decade, so that when we get to the end of the decade, 40% of our nameplates around the world, not just in the u.s., will be electrified. emily: aside from ford and tesla, which electric carmaker surely be watching over the long-term? tim: general motors, this year will have the new bolt, which is their new vehicle.
gm has been making a lot of noise for a number of years about how it can create this technology and make it appealing to everyone. bolt, which was essentially an electric vehicle, it had extra energies that you didn't have the range anxiety, it was not a sales hit. they're hoping that the bolt will take them to that place where they are part of the conversation like tesla. emily: i want to turn to driverless cars. china's baidu announced a big push, saying it hopes to be mass-producing its own driverless car by 2020. how does the race for driverless cars in china compared to what is going on in the united states? my favorite quote was the ceo who said, we will worry about
the business model later. tim: that seems to be a similarity somewhat in the united states as well. we are seeing new entrants, such as google and possibly apple in this space, trying to figure out where they can play. then, you have legacy companies such as general motors trying to figure out where they can be. in china, these new internet companies trying to figure out where they can be, and then you have these new startup auto companies in china. one company this month announcing that they went 1200 miles across the country testing an autonomous car. you want to think how you will be in that avant-garde of the technology. emily: obviously, google seems to be, when it comes to self driving cars, going it alone. with baidu, and apple, are they doing it on their own or with partnerships? tim: that is the big question
both in detroit, toyota city, frankfurt, all of the auto capitals of the world. what are these technology companies going to be able to do? do they want to be suppliers or manufacturers? when you talk to google, they don't want to be a manufacturer. your sources telling bloomberg that maybe google and fiat chrysler are talking about some kind of partnership. you look at fiat chrysler's ability to make cars. excess capacity is really expected to grow in the next few years. they could turn out to be a situation where they make the vehicles and you can see a google or a tech company essentially providing the brains or the ai for the product. emily: interesting. tim higgins for us in washington. tim higgins of bloomberg news. coming up, we will head to sweden and meet to scientists who might be onto a robotic
emily: a story we are watching. yahoo! has shortlisted close to 10 bidders in the auction of its assets, according to reuters. most of those options require cash. bidders on the shortlist include verizon. yahoo! has declined to comment so far, they are expected to narrow the field of bidders as soon as next week. a regulatory filing has disclosed that marissa mayer will walk away with a $57 million severance package if the process results in a sale that ousts her from her job. her salary was down 15% from the year before with pressure to sell the company. google has just united hardware groups into a new division. rick osterloh will oversee
products including nexus phones, the formal -- the former google glass, now called project aura. the company has never fully committed to making its own devices. with smartphones taking on more complex tasks like virtual reality, google is anticipating the need for a better relationship between its software and hardware. another revolving door, the world's largest advertising company says it is looking for candidates to replace founder and ceo sir martin sorrow. he has not yet announced plans to retire or step down. in a letter to shareholders, wpp says it has a strong list of internal and external candidates should the time come. sorrell remains the highest-paid ceo in the u.k. checkout lines set to move a bit faster. mastercard and visa are seeking to speed up chip-based credit and debit card.
the cards chipping away at the patience of shoppers and retailers alike. it will require more than one million u.s. merchant locations to upgrade their chip enabled terminals. now, it is time to find out who is having the best day ever. today's winner, you can say goodbye to some wait time. uber is setting up a new system in new york, new jersey, dallas, and phoenix, which will charge customers an additional fee for making a driver wait more than two minutes. cancellation periods will be shortened from five minutes to two minutes. if you happen to be fashionably late, you may want three think that. that doesn't for this edition of -- that does it for this edition of "bloomberg west."
be sure to tune in next week. we will be speaking to the founder and ceo of the khan academy about his vision to bring education into the digital age. we will bring you the best interviews of the power players in tech media. our interview with twitter cofounder biz stone, why he is bullish on twitter over the long-term. ♪