tv Bloomberg Business Week Bloomberg April 30, 2016 7:00am-8:01am EDT
carol: welcome to bloomberg businessweek. yahoo! is up to sale but what's with the negative valuation? david: they are building a the atlanta braves for anyone but the atlanta braves, that is up ahead on oh vote bloomberg is this week. we are joined by alan pollack. there was an article last week about amazon that is attracting attention. >> we did a story that showed
cities had amazon note available but it was available in predominantly black areas and was not the intention of amazon to discriminate but the results were there were these lines. in boston, it was extremely obvious because the delivery service excluded roxbury and was surrounded by areas that were able to get the prime one day service. there was a hoopla and the mayor asked questions and senator markey of massachusetts demanded answers. as of today, amazon have that track and said roxbury will be getting this one-day service now. david: in the global economic section, a he's about wild cap minors going after amber in ukraine. >> ukraine is a bit of a mess
area they have rebels backed by russia fighting in the east. there is a lot of tension still going on and the attention is bad. in certain areas, people are illegally trying to mine amber which is made of resin from ancient trees and it's the lovely orange jim that is very m thative -- orange ge is very expensive. around,horities are they are trying to make a living doing this area david: it's a messy process. >> it really is, you have to dig into these ancient pools of water and sometimes these gems are getting damaged and cannot be polished properly. the gems are not as valuable.
it's an attempt to replace lost income. david: what is the ukrainian government doing about it? it is >> costing them a lot of money. so many of their resources are being directed at other things area they are trying to do something about it but they haven't made much headway. david: the cover story is about yahoo! with bids being tendered and people are looking at the tenure of marissa mayer's. what is the story about? >> the story looks at all the pressure on yahoo! and whether the ceo could have fixed it. company asn old tech silicon valley goes. problems and a lot of its value lies in its which willi baba probably spun off in one way or another and there are tax problems associated with doing a
full-fledged spinoff. could she have fixed this company? she is focused on reading new products but it has not really made a dent on it problems. david: carol massar talked about that story. nine thousand employees and services, it the way that you and me and our parents get on the internet. that is one part of the company and then there is another part of the company that has a stock portfolio and that stock folio by its they'll is worth more than the entire market value of ya ho because it's a camp located tech situation but it has to do with the fact that investors have lost confidence in marissa mayer. take us back because at one point it was a successful company. >> 15 years ago it was. it was unstoppable.
it went into decline starting in the early oughts. recently, around the time marissa mayer took over with the rise of mobile. they make money through banner ads and it does not work well on cell phones. she inherited a position that was almost impossible. iol: when she was brought in, people thought it was a great move. some directors and investors were kind of charmed by her star power. i think they lost sight of how challenging it dan b. onyou want to lay some blame the management of yahoo!, you might say that marissa mayer and some of her management team got taken in by the same weekend do anything feeling. this was a troubled company from the jump. who knew that changing
coffee at their headquarters would make a difference but a changed morale a little bit. >> it's funny to look back at the press when she first took over. she made lunch free and everyone said that's amazing. just a few months ago, investors were talking about her profligacy and she spent all this money on these perks and nothing had come of it so it shows you the way that the narrative has shifted in six months. she also went on a buying spree, bunch of acquisitions and paid about $1 billion for one company but they say it makes sense. >> it depends are you ask. one acquisition did not pay off which was tumblr. that did not work out so well. , that'sler acquisitions more open for debate. it but there is truth to
she has said that yahoo! needs to hire smart people. that is how it's done in silicon valley. and its the strategy sort of work. to keep theshe get job ultimately when the assets are sold off? >> it seems unlikely. likely going to happen is that ya ho will be dead is that yahoo! will be sold to verizon or another company. even in marissa mayer were allowed to keep the job, would you want to? she is a product person. over the next couple of years, there will be a lot of cuts and integration and corporate synergy. shes hard to imagine that is the best person to do that or she would want to do that. it's much more likely she will wind up at a venture capital firm or a start up.
she is very talented. i think this was a case of may be a bad fit. carol: you may have noticed the cover page. how shee asked tracy ma came up with the concept. >> we were visualizing yahoo!'s last ditch effort to save itself envisioning selling the company. about theeresting cover is that everything you associate with yahoo!, all the nostalgic feelings, all of that is a negative asset. we tried to maybe put that separation in a form that people would recognize. david: did you come up with this immediately? >> we arrived at a pretty quickly i want her earliest meetings. sketch outwanted to the whole rummage sale/firesale
carol: welcome back. david: this week's feature section, an investigation as to what brought down lab m d. carol hacking was involved and we spoke to the editor about the man who led the fight. >> it was a small business doing medical testing for urologists specifically and a loss at all when his business was hacked and the hackers try to sell him protection from people like them. carol: nice of them.
>> he declined to buy their protection and the hackers turned him into the ftc which try to make an example of him. david: he fought back against that and that's with rare about his story. the ftc in terms of what it requires, it's onerous. many others were just settle flat out. >> every other company caught in similar things did so. there are 60 cases in which the privacygs these data cases in. it's an extension of a businesses obligation under hipaa. instance, the business did the math and decided it made more sense to settle. a second got life-changing call that made him realizes he had been had. >> he got a call from somebody who worked for the hackers. carol: richard wallace. he said i was engaged in
taking the data from your company and reaching in through a peer-to-peer network. he said that was me. he said i did that and other instances as art of the campaign. -- as part of the campaign. that finally changed the game. without that testimony -- he and over a couple of years, he testified to the same things before congress and made the same testimony in the ftc court. carol: that was a long track. >> he lost his entire business in the process. a look at how unions are challenging the t-mobile in-house workers. >> the communications workers of america, when they supported the
move by deutsche telekom, the german telecom giant, to take over the predecessor company, they had hopes that it was more union friendly and it would mean this would be an easier company to organize. instead, we have a decade-long struggle between the union and the company in which the union and, in some cases, the national labor relations for prosecutors have accused the company of not wallowing u.s. labor law. telekom, we have seen some heat from politicians in the u.s. and germany from some investors over these alleged violations of labor laws. a decadeantime, cwa, into their campaign, has not been able to get collective-bargaining contracts for any more than a handful of the 45,000 employees there. david: we are talking about dozens? >> that's right, there are hundreds of employees or 1000
who have shown that they want to notart of cwa but it has been able to get contracts for more than a few dozen workers at t-mobile. david: do the members site specific grievances with t-mobile and deutsche telekom? >> among the things that workers have raised as concerns are pressure in terms of workload and pace. there are allegations that people make about things like being told to wear a dunce cap if you don't get your work done top or managers shaking people's chairs and telling them to work faster. t-mobile has rebuffed these efforts for the workers to unionize but trying to find a new way for them to voice grievances and workers are skeptical. twistwere revealed a new in this fight which is that cwa is alleging that t-mobile has
taken a page from american companies in the 1920's and 30's by illegally setting up a so-called company union. it's a labor organization that looks and sounds like a union and that it's made up of employees and it deals with management or workplace issues but in fact is controlled by the company. this is an organization called t-voice that they rolled out around the country last year and ascribed to employees is made up of representatives as their voice. t-mobile has also sent communications to workers crediting t-voice with changes it's made in the work place perks like wi fi or cell phone charging stations. from the perspective of the union, this is illegal and misleading. rather than having an organization that deals with worker representatives elected by workers, you have an
david: welcome back. in this week's politics and policy section -- carol almost 2000 anti-gay bills are being filed in the south. >> you have what's been going on a north terrell on it, the back-and-forth as they try to get the legislature there to rescind the law and you have tennessee and south carolina which have backed down and don't
seem to be pushing as far forward. you have mississippi considering a set of rules. you have missouri considering a set of rules. day to dayl kind of it simmers back-and-forth determining which law is the one they are focused on at any given time. north carolina will be prominent and then it will switch over to missouri or mississippi or tennessee. it depends on what someone is doing on a given day. we are looking at over 30 states and 200 or so bills. it could pop up anywhere or any time and we are nowhere new the end of this. well -- bestof the well-known corporations, what are they doing? >> some of the biggest names in business are writing letters, going in and having active meetings where they send in their staff especially in cities were they have a big presence. for example salesforce is potentially active in indiana
for they have a lot of people and georgia. then you see paypal which was considering bringing people into north carolina. disney is active in georgia raced on things going on with entertainment. you can see the companies get involved where they have people. that is clearly starting to become maybe not enough. carol: they are actually opening up their wallace? >> and they have been providing funding but now it's starting to show up as important to how they will do this move forward and it needs to be coordinated. you need to have someone who says we need another 60 signatures on this letter. so we can get support in the state in many cases, the top 10 companies mean the next 200 companies will sign on. this is a new space for american business. what's next? is there another state that the next battleground? to see whataiting
happens in mississippi and missouri and you look around the country, some states have 20 potential bills. what they did not know in north carolina is when something will pop. was goinglly knew it to happen in north carolina until it happened. charlotte said we will let people who are transgender choose the bath mother choice and overnight, the legislature said you are not. where in the situation where people are scrambling. georgia knew it was coming and they practiced at last year in indiana. one guy described it as a game i asked-a-mole: david: the editor about travel being highlighted in the issue. airlines like american and qantas have introduced daily nonstop from san francisco and los angeles. .t's understandable it's still pretty mild during the day.
it's a long flight. >> we have a couple of suggestions. you can stay in los angeles. you can do one that screens movies on the roof. qantas and american have some pretty awesome first-class lounges. if you are not flying first class, you can pay to use them and they are worth it. david: you present an alternative of a little town north of cancun. >> it's actually 26 miles of mangrove. it is also car-free. you can basically find accommodations that -- accommodations that range from $200 a night and you can snorkel with well sharks. sharks are just sit on the beach. : up next, more from the
david: still ahead, why minor-league ballparks are really a good idea for small towns. carol: and how amazon developed its hit, the echo. david: and how to vacation like a king on a diamond. carol: it's all ahead on "bloomberg businessweek." ♪ david: i'm here with ellen pollock, the editor of "bloomberg businessweek." so many must-read stories in this issue. let's start about the opening remarks about alexander hamilton , he's going to keep alley dinner hamilton on the $10 bill. this is an historical figure who is been really lionized in popular culture over the last year or so. our economic correspondent peter coy takes alexander hamilton off of the broadway stage and actually talks about his economic policies. it is contribution to economic thought in the u.s., and how
it's had an impact even today. one of the things he did was sort of question laissez-faire attitudes of adam smith and really stressed that the government needed to be able to tax. and that the government needed to spend money. he said power without revenue was a bubble. i'm not sure what that means, but i think it's really important. he also stressed that the u.s. needed a manufacturing base, so we could compete with other markets. david: in the markets and finance section, you will get snowbirds, folks who live in canada been on vacation property here in the u.s. a huge percentage of vacation homeowners from overseas and the u.s. are in fact, canadian. that is starting to change. ellen: you not understand the candidate is cold and florida's warm. it's been a natural place for canadians to invest and have second homes. now, the real estate market in florida is getting kind of soft.
sellhe canadians desire to and take their gains is part of it. one of the things that's motivating the canadians is the strength of the u.s. currency. their gains are looking quite as good, they are paying maintenance fees and other kinds of fees, property taxes in florida. sell, andrying to take their gains and invest them elsewhere. david: this politics play into this? ellen: they are. we have to talk to a canadian family that owns to vacation homes. they're going to sell one of them, and one of the things that worries them is how this election is going to end up. it's not like they are for one candidate or another, it's just the craziness of the selection is just worrying them. david: if each of these in issue about minor-league baseball team in mississippi just outside of jackson, that bets big on what minor-league baseball is going
to be able to do for that town. ellen: it's all about the atlanta braves, and the atlanta braves own all of their minor league teams. they build minor league stadiums in small or smallish towns, they have required big bond offerings to pay for the stadiums. small towns are eager to do business with them, and hope to read financial benefits. and then they find that the revenues from the stadiums, etc., are really paying what they need to pay back the debt. and they have to dip into the general funds. david: a cautionary tale. i talked kate smith. it's this scruffy bedroom communities suburb of jackson, mississippi. they have virtually no economic development. there aren't any country -- any companies, there are no factories. this mayor who is desperate for development. he is looking for something in the stranger walks into his door, and that stranger is tim
bennett. use this want to be minor-league deal maker. teams toto bring different towns. he had a team fall apart in jackson, so we need to newtown in a new team. he goes to jimmy foster and says what do you think about baseball. david: that necessitates a stadium. kate: of course. that's how the whole thing starts. the stadiums are expensive, it's kind of a matter of what you are willing to give as a town. the braves want to get as much as possible, they want to get the luxury locker rooms, they want to get the dugout tunnel that goes from here to there. as a town, you have to tell them to stop, and if you don't, they're going to get everything. david: how into this team is the town? you hope it will be a following that will lead to the kind of economic developed. it that happen -- did that happen? kate: for the first couple of
years, it did. the novelty is interesting. i was there for opening day back in april. there weren't a lot of people there. it was not a packed house. the braves lost, unfortunately. they had a fire display the end of the game, i would be over exaggerating if i said there were 300 people left. carol: what's interesting about mediatory is the liberty john malone connection, which has been brilliant and how he retrieved his media company. he's done that with baseball as well. kate: it's interesting. trust at municipal bond all the time. i look at them all the time. carol: i'm so sorry. carol: i know, right? when i first saw this deal, you had to reread every sentence for five times. i went over to our media guys and was like you follow liberty media, let me tell you the story. and they were like that is so malone.
carol: bottom line, you have these small towns and cities being stuck with a huge price tag were building a stadium. a thingkind of become we see over and over again. kate: it's a different sporting -- a disappointing story. you always have someone who as well, not quite. we interviewed mike plante, the business development manager of the braves. he just goes right out and says all the sports economists are wrong. it's like comedy studies do need to read before maybe you are wrong. -- how many studies do need to read. strugglesturing the of mississippi is a story in itself. >> the obvious thing you want to and the kindadium of sense of small-town baseball community.
we asked a photographer, matt ike, who has done a lot of work with longer-term documentary projects, cut of dealing with poverty, ohio and parts of the southeast in virginia. i thought he would be able, from his long-term projects, to sort of look at a place like pearl, mississippi and see the layers in the kind of texture of the community. we sent him down with kate to photograph opening day. her, itrom talking to sounds like this in the community that was pretty economically devastated. there must be some amazing contrasts when you get on the ground in perl. >> sure. there's something about the texture of new stuff, a minor-league stadium, they only ever look so good. there's a contrast, there is new business. there's also a hard quality to the pictures and the place. i think that's an interesting you know, what the
phone, the echo has been a huge hit. it's a nine inch tall cylindrical speaker that listens for verbal cues, sue can call out to it across the room using its wake word, which is alexa, unless you want to tinker with the options. you canask it anything, shop with amazon, you can ask for the weather or asking questions like you would syria. it's just been a hugely popular hit for amazon, particularly for the hardware division lab 126. carol: take us back, how did the echo get built? brad: it's a great story that we lay on this week's magazine. probably all things, long, circuitous, slightly tortured story. we only see the actual finished product that most of these companies. amazon had been working on the echo for a long time. dash atd at the amazon one point. it was supposed to be a more
sophisticated, intricate device. augmented reality, it was called, where there's an element of projected images on walls or tabletops. component ofhis speech recognition, were you can ask it things. ultimately, as amazon's lab 126 hardware division really recovered from the flop of the fire phone, the overall dimensions of this project were narrowed, they really kind of focused in on being a very utilitarian speaker that could listen and answer people's queries. and that is what has risen for its customers. it would beught apple or google that came out with a device like this. it blows my mind a little that it was amazon. brad: i think they would like that comments. they don't want to be counted out of this game to find the next generation of software and services that will control our lives. that's why this bet in hardware is all about. david: when you look at amazon and lab 126, and the echo, is it
making money? that's a difficult question to answer. like all amazon devices, i think analysts and investors would probably assume that the devices themselves lose money. amazon tries to sell it right at cost. occasionally discounts the devices. is obviously a huge upfront investment and bring them to the market. this was a multiyear project. but the devices integrate so well with amazon's other services. everyone was buying an act oh in , it's lockedn echo customers into the amazon ecosystem. on the face, it may not be a profitable line item in amazon's financial results. but if it makes customers more royal -- more loyal, it's probably a good bet. carol: big automakers are looking to remain competitive, they're are looking for a few friends in silicon valley. david: we spoke to reporters
david welch. david: there are a lot of technologies that are converging. right during services like uber and lift -- lyft are growing. these things are all done by apps, that's a reservation system is done. you want to have the self driving car that comes in picks you up after you reserve some pp.e with it on a nap -- an ao people are going to be left in this old world business model, and that's the conversion that make silicon valley very opportunistic. that makes detroit and stood guard and tokyo companies a bit nervous. david: you look at why detroit needs silicon valley, you also need the inside of the coin. why does google or apple need a partnership like this one? david w.: google and apple are not in the business of making
cars. the other part of that is what they really want to get into the cars?ss of making that's capital intensive, expensive, not high-margin. those companies are in massively high-margin low capital businesses. with a would rather do, particularly google -- they would like to partner up with one of the big car companies and have them be lebron, the muscle that makes the car. google will do all the brains that makes the car self driving and does the connectivity and links it up to different web services. the possibilities are kind of endless. if you have an autonomous car, would you take people's eyeballs off the road, the limits of what you can do with someone like google and the connectivity is only limited by their imagination. gool: a tip sheet on how to phone free. david: i spoke with editor brent vegan. brett: do take your smart with you or leave them behind? david: what do you do about photos?
brett: go to my friends. recommended about a different things you might want to pick up that would make using a real camera a lot more fun. every thing from printers to little mini projectors. a $100 bullet camera, which is fun and comes with a lot of colors. there's a drone that we recommended. ret: we do recommend the fanny pack. >> you can put your passport in their, a point-and-click camera. it's revitalizing the idea of using your camera instead of your phone. >> there will be those who say i have to take my phone with me. you have a few apps. june -- tune will eliminate blemishes. built-in nap with 75
businessweek." i'm david gura. carol: and i'm carol massar. in this week's market and finance section, a look at credit card turners. david: these are people who squeeze credit card companies for free stuff. ofturning is the process opening up several new greg hardy for the sign on bonus, and then moving on to another set of credit cards. people and of what 20, 30, 40 credit cards. appears to appeal to a certain set of personalities. >> all the terms on the cards are very different. you need to be very organized and have a high credit score to begin with. if you do this wrong, your credit can be complete with destroyed. carol: you can't spend a look what you have access to, or you get into trouble. >> in you to meet the minimum spending requirements to get the sign-up bonus, but don't go any further. carol: we are talking about mileage and stuff like that. >> hotel, travel
perks, airlines. there are a ton of new credit cards that come out that are trying to get loyal customers. even small airlines have their own cards. david: our banks encouraging this? -- what did ie think about these people who have these great cards? >> the banks see this is a necessary evil. have people be loyal to their cards. they have higher interest rates than other cards. they are eventually going to make their money back. but they are doing some things to limit the number of turners who are out there. the people who are gaming the system. they are making the rules and you can only apply for five credit cards in two years. carol: you wrote this story, it is a fun read. what is your advice to someone who may want to do this? >> be very careful. be start small. there are plenty of ways you can game the system in a small way.
take out one or two credit cards that have attractive bonuses. see if you can handle that before you get into getting into the deep end. but it is legal. >> completely legal. the credit card company's didn't want this to happen, they could do some thing about it. david: learn how to vacation on the company dime. here's editor brent vegan. >> you may be able to get your boss to pay for a vacation if you choose wisely. there are amazing conferences, a lot in european cities in june, in berlin, in london. there's also a couple in montréal, and in france. we are suggested that only the conference to go to, but maybe in between sessions, some things to do while you are there so it will actually feel like a vacation. david: there's a conference i can go to in france. >> june 18 through 26, you still have time to book. starts at about $1700 a person. you may ask your boss is if they may want to send you there. while you are there, you can go
to the beach. david: you have to. >> you are in france in the middle of the summer, what else are you going to do? david: a lot of these european cities tried to cultivate getting people to come there for work. gura, whot i, david lives in new york, would love to get out and see these other cities. cities, are a lot of it's a way for you to meet people who are pre-or post pivot investment capitalists, angel investors. they happened to be in great world-class cities. carol: "bloomberg businessweek," is on business stands now. and online. we'll see you next week. ♪
♪ >> coming up on "bloomberg best," the stories that shaped the week in business. saudi arabia moves beyond oil. the bank of japan has new policy statements, and earnings come fast and various from a slew of major companies. >> they give us another problem. >> this is a serious realignment going on. >> this machine is working, stay out of the way because we will not stop. toy: from nobel laureates leaders in sports, there is no stop to the interviews. >> the eurozone has been a failure. >>