tv Bloomberg Business Week Bloomberg May 1, 2016 4:00pm-5:01pm EDT
carol: welcome to "bloomberg businessweek." >> we are the magazine's headquarters in new york. yahoo! is up to sale but what's with the negative valuation? david: they are building a stadium for the atlanta braves for anyone but the atlanta brace? carol: the annual summer travel guide. that is up ahead on "bloomberg businessweek." david: we are joined by ellen, "bloomberg businessweek"'s editor. there was an article last week about amazon that is attracting attention. a senator from massachusetts is taking look at it.
>> we did a story that showed that six major cities had amazon prime's one-day delivery service was available, but it was not 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 -- backtracked and said roxbury will be getting this one-day service now. david: in the global economic section, an amazing piece about wild cap minors going after amber in -- wildcat miners going
after amber in ukraine. >> ukraine is a bit of a mess . they have rebels backed by russia fighting in the east. there is a lot of tension still going on in the economy is really 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 gem that is very expensive. they are going in there with their equipment, and whenever the police is around or authorities are around, they scatter and they are trying to make a living doing that because it is so hard to make a living in ukraine right now. david: it is a really messy process. >> it is an messy process. you have to dig into these ancient pools of water and sometimes these gems are getting damaged and cannot be polished properly. in a way, they are making things hard for themselves because the gems are not as valuable, but it
is a desperate attempt to replace lost income. david: what is the ukrainian government doing about it? i imagine it is costing them some money. >> it is costing them a lot of money. so many of their resources are being directed at other things . 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? ellen: the story looks at all the pressure on yahoo! and whether the ceo could have fixed it. yahoo! is an old tech company as silicon valley goes. it has a ton of problems and a lot of its value lies in its stake in alibaba which will probably spun off in one way or another, and there are tax problems associated with doing a full-fledged spinoff.
the question is, could she have fixed this company? she has been focused on creating new products, but it has not really made a dent on its problems. yahoo!, atom line is, company with 9000 employees, all of these services, it weighs you and me end our parents get on the internet. company,ne part of the and then there is another part of the company that is a stock portfolio. that stock portfolio, all by itself is actually worth more than the entire market value of yahoo! because there is complicated tax situations and the fact that investors have lost confidence in the ceo, marissa mayer. carol: take us back because at one point it was a successful company. max: fifteen years ago it was the bees knees, unstoppable.
it kind of went into decline that starting in the early years during the rise of google. a little bit more recently, around the time of marissa mayer took over with the rise of mobile. you who makes money through banner ads and they do not work well on cell phones, and as a result, she inherited a position that was in a lot of ways almost impossible. carol: when she was brought in, everyone thought, what a great move. >> a lot of people including directors, investors were kind of charmed her star power, and i think they lost sight of how challenging this would be. if you want to lay some blame on the management of yahoo! you andt say that marissa mayer some for management team got taken in by the same, we can do anything kind of feeling, where this was really a troubled company from the jump. carol: who knew that changing coffee at their headquarters
would make a difference but a it 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. wind the clock back just a few months ago, investors were talking about her profligacy and acting as if she has spent all of this money on these perks and nothing had come of it, so really showing you the way the narrative has shifted just in six months. carol: she also went on a buying spree, bunch of acquisitions and paid about $1 billion for one company. did they make sense? >> it depends are you ask. -- on who you ask. one acquisition did not pay off which was tumblr. that did not work out so well. they have written down a good chunk. the smaller acquisitions, some people caught a buying spree, but i think that is open for debate. what she has said, and i think
there is some choose to it. god who needed to hire people. they needed to hire smart people, and that is how it is done in silicon valley. strategyhat was the and is sort of worked. carol: what is more a set of meyer running into, that she could to keep the job? where is this all headed? >> according to the people we have spoken with, it seems unlikely. what is most likely going to happen is you who will be sold to verizon or a company like it. you have to sort of wonder, even if marissa mayer were allowed to keep the job, which you want to? she is a product person. it seems like what is going to happen over the couple years, there would be a lot of cuts, integration, corporate synergy and it is hard to imagine that she is the best person to do that or she would even want to do that. it is much more likely she will wind up at a venture capital .irm or a startup
she is very talented. i think this was a case of may be a benefit. you may have noticed the eye-catching yahoo! cover page. >> we were visualizing yahoo!'s last ditch effort to save itself envisioning selling the company. what is interesting about the state of affairs, is everything you associate with yahoo!, the entire company, the nostalgic feelings you have toward it, all of that is a negative asset. we tried to put that sort of desperation in a form that people would recognize. david: did you come to this immediately? >> we arrived at it pretty quickly at one of the early meetings. we knew we wanted to scratch out the whole rummage sale, firesale, cheap aesthetic of
little bit. what we ended up with was something classic, business week, good, mean fun. carol: up next, the high cost of battling the fcc. how one man lost everything. unionizettling to t-mobile. carol: the man that could've been the biggest influence on how capitalism involved -- evolved. yes, it's alexander hamilton. david: all that is ahead. on "bloomberg businessweek." ♪
♪ carol: welcome back. david: this week's feature section, an investigation as to what brought down lab m.d.. carol: and yes, hacking was involved and we spoke to the editor about the man who led the fight. >> he had a small business doing ng and he lost it 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 and what you have to go through, it is so onerous he alleges that many others would just settle flat out. >> every other company caught in things did settle. there are 60 cases in which the ftc brings these data privacy cases in. it's an extension of a obligation under hipaa. in every other instance, the business did the math and decided it made more sense to settle. carol: he got a second life-changing call that made him realize he had been had. >> he got a call from somebody who worked for the hackers. carol: richard wallace. >> right. this person said, i was engaged
in taking that data from your company, reaching into your network, that was me. i did that in other instances as part of a campaign. that is what he said. that finally changed the story, change the game. without the testimony -- he called him over a series of years and he testified to the same things before congress and a subcommittee, a house subcommittee, and finally made the same testimony in the ftc court. carol: that was a long track. >> he lost his entire business in the process. carol: in this week's industry section, a look at how unions are challenging t-mobile's in-house workers. >> cwa, 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 some hopes that this more union friendly company coming in would mean this would be an easier company to organize, but instead we have seen a decade-long struggle between the union and the company in which the union, and in some cases the national labor relations board prosecutors have accused the company of not following u.s. labor laws. we have seen for deutsche telekom some heat from politicians in the u.s. and germany and some investors over these alleged violations of labor laws. decademeantime, cwa, a into their campaign has not been able to get collective-bargaining contracts for any more than a handful of the 45,000 employees there. are really talking about a handful, just dozens even? >> that is right. ens ofare doz
employees that say they want to be a part of cwa but they have not been able to get contracts for more than a few dozen workers at t-mobile. do they have grievances with t-mobile and deutsche telekom, or is this more blanket, we want these employees to be unionized? >> the concerns they have raised workload,sure, people being told to wear a dense cap if you do not get your work done in time, or people shaking chairs to get the work done faster. this: what is novel about is what t-mobile has done here, rebuffing the efforts for these workers to unionize but also trying to find a new way to voice some of these grievances and workers are kind of skeptical about that. week'seveal in this bloomberg businessweek, a new fight that seat of ui is
alleging t-mobile has taken a page from american companies in the 1920's and 1930's i illegally setting up a so-called company union. it is a labor organization that looks and sounds in some ways like a union and that it is made up of employees and deals with management on workplace issues, but in fact is controlled by the company. this is an organization called t-voic that they rolled oute last year and described in e-mails to employees that it is made up of representatives and it is their voice. t-mobile has sent communications t-voicers crediting with changes it is made in workplace perks like wi-fi or cell phone charging stations, and so from the perspective of the union, this is illegal and misleading. rather than having an organization you deal with with worker representatives elected by workers, you're having an
♪ david: welcome back to bloomberg businessweek. this week's politics section. carol: the corporate coalition fighting 2000 anti-gay bills are being considered across u.s. south. you have what is going on in north carolina, the back-and-forth as they try to get the legislature there to resend the law. you also have tennessee and south carolina which seem to have acted out and they do not seem to be pushing this far
forward. you have mississippi, considering a set of rules. you have missouri considering a set of rules, and they are all kind of just moving day today day, simmering back-and-forth determining which of the laws are going to be 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 all depends on what someone is doing at a given day. we are looking at 30 plus states and 200 or so bills, so he could pop up anywhere at any time and we are nowhere it knew the end of it. carol: you know who is not sitting quietly are a lot of the well-known, best well-known corporations around the country, u.s. corporations? what are they doing? names inf the biggest businesses are writing letters, coming in with active meetings with their staff to talk, especially in cities where they have a big presence. if you have a salesforce particularly active in indiana,
where they have a lot of people in georgia, a lot of people in your shift to use the paypal bringwas considering to people into north carolina where they are active, disney active the georgia based on some things with entertainment. you can see the companies getting involved where they have people, and that is clearly starting to become maybe not enough. carol: not enough, so that means what they are doing is actually opening up the wallets, right? >> now this funding is starting important on be how they are going to move for. it needs to be coordinated. we need people to say we need another 50 signatures on this letter. in many cases, the right 10 companies at the top of the letter mean the next 200 companies will sign on because this is a new space for american businesses. carol: what is next in this fight? is there another state that is the next battleground? >> we are still waiting to see
what happens in mississippi and missouri, and you look around the country and they are some states with 20 potential bills, but what they do not know is when something will suddenly pop. north carolina, no one knew it was going to happen until it basically happened. charlotte said we are going to let people who are transgender jews the bathroom of their choice, and a most overnight the legislators say, no you are not. more time andhad the duo is coming, and the practice at last year in indiana do get a sense of how things should be done. --is a game of waccamaw whack a mole. david: i asked the editor about travel being highlighted in the issue. >> airlines like american and qantas have introduced daily nonstop from san francisco and los angeles. it's understandable. it is an incredible food scene. even in sydney's winter it is
place told or in the go. david: 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. a lot of fun. but also qantas and american have some pretty awesome first-class lounges. if you are actually not flying first class you can still pay to use them and they are actually worth it. david: you present an alternative, it will town north of cancun. >> yes. it is 26 miles of mangrove. it is also car-free. which is really nice. isla holbox. you can find accommodations that range from $100 a night up to $400 a night and you can snorkel without sharks. beach can just sit on the and you do not have to fly for 15 hours. carol: up next, more from the
david: still ahead, why minor-league ballparks are rarely a good idea for small towns. carol: and how amazon developed its hit, the echo. david: and how to vacation like a king on the company dime. 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. secretary treasurer jack liu is going to keep alexander hamilton on the $10 bill. this is an historical figure who is been really lionized in popular culture over the last year or so. ellen: our economic correspondent peter coy takes alexander hamilton off of the broadway stage and actually talks about his economic policies. his contribution to economic
thought in the u.s. and now it has 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 is a bubble. i'm not sure what that means, but i think it is really important. he also stressed the u.s. needed a manufacturing base so it could compete with other markets. david: in the markets and finance section, you will get -- look at 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. why is that? you have to understand that canada is cold in florida is 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.
in the canadians' desire to sell 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 not looking quite as good and they are paying maintenance fees and other kinds of fees, property taxes in florida. and taketrying to sell their gains and invest them elsewhere. david: does politics play into this? >> they are. we have to talk to a canadian family that owns to vacation two 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: the feature piece in this issue about a minor-league baseball team in mississippi just outside of jackson, that bets big on what other baseball teams are going to be able to do
on the town. ellen: it's all about the atlanta braves, and the atlanta braves own all of their minor league teams. one of the things they have done is built minor-league stadiums in small or smallish towns and they have required big bond offerings to pay for the stadium , and the small towns are eager to do business with them and help to wreak financial businesses -- benefits and then they find the revenues from the stadiums, etc. are not really paying what they need to pay back the debt and they have to dip into their general funds. david: a great piece. a cautionary tale. i talked to kate smith. kate: it's this scruffy bedroom community suburb of jackson, mississippi. they have virtually no economic development. there aren't any any companies, there are no factories. you have this mayor, jimmy foster who is desperate for development, looking for something and then a stranger walks into his store, 10 bennett
-- tim bennett. he wants to bring teams to different towns. he just had a team fall apart in jackson, but he needs a new town and a new teams that he goes to jimmy foster and says, when you think about baseball? david: new town, new team. >> exactly. they are very expensive and it is kind of a matter of what you are willing to give as a town. of course with the braves like any team, they want to get as much as possible, the luxury locker rooms, the dugout tunnels to go from here to there, so as a town you have to tell them to stop and if you do not, they are going to get everything. david: how into the team is the town? you go there, build the stadium and you hope there is following, that it would lead to economic development. didn't happen? -- did it happen? >> for the first couple of years
ago. the novelty was interesting. i was there for opening day back in april and there were not a lot of people there. it was not a packed house. the braves lost, unfortunately. they had a firework display at the end of the game, and i would be over exaggerating if i said there were 300 people left. about what is interesting this story is the liberty media, john malone connection who has been so brilliant with how he re-creates the media company and he has done that with baseball as well. >> that is one of the more interesting aspects of the old graves saga. -- braves saga. i look at them all the time. carol: i am so sorry. [laughter] all the timethem in my first saw this deal you had to reread each sentence for her five times. i went over to her media guys and i said, you following liberty media -- follow liberty media, and it is so malone.
small townsave a and cities stuck with a big price tag for building stadiums, and that has become, we have seen this in towns around the country. >> it is a disappointing story because no matter how many times you read in economic study you always have someone who says, well, not quite. we interviewed a man named mike plante who is the development manager of the braves and he goes right out there and says, no, all the sports economists are wrong. how many studies do need to read before maybe you are wrong? carol: in the meantime, they cannot fix the roads or anything because they have no money. is a storythe images in it of itself. david: we spoke to a foot a journalist about those pictures. >> the obvious thing you want to see is the stadium and the kind 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, kind of dealing with poverty, parts of the southeast in virginia. i thought he would be able to, from his long-term projects to look at a place like pearl, mississippi and see the layers, the kind of texture of the community. we sent him down with kate to photograph opening day. david: from talking to her, it seems there is a real conflict because the community was economically devastated. there must be some amazing contrast when you get on the ground in perl. >> sure. there is something about the texture of new stuff, minor-league stadium only ever look so good. there is contrast, new business that there is also a hard quality to the pictures and places and that is an interesting element of what the actual impact on this town is.
the fire phone, but the echoes has been a huge hit. it is a nine and toss a logical that listens for verbal cues, so you can call out across the room using its wake word and you can ask it anything, shop on amazon, you can ask for the weather, as good questions like you would series --siri. it is been a huge popular hit for amon. carol: take us back, how did the act of get built? that weis a great story lay out in this week buzzing magazine. it is like all things. a long, tortured story. we only see the actual finished product for most of these companies. amazon had been working on the echoes for a long time and at oneit the amazon dash
point. it was supposed to be a far more sophisticated, intricate, technologically sound device, an ment where it would project images on walls but also have the speech recognition. as the division recovered from the flop of the fire phone, the dimensions of the product were narrowed and they were focusing in on this being a very utilitarian speaker that could listen that answer people's queries and that is what is resonated with customers. carol: it blows my mind that this was amazon that put out this product, not google. >> i think they would like that comment. they do not want to be counted out on this game but find the next generation of software services that will control our data and that is what this and hardware is all about. david: when you look at amazon echoes, is and the
it showing signs of making money? >> that is a difficult question to answer, because like all amazon devices, we analysts and investors would probably assume the devices themselves lose money. right ofies to sell it costs, occasionally discounts at and upfront and investments. the devices integrate so well with amazon's other services, so anyone that buys and i go increases their amazon buying, then this is been a great that for amazon and it has locked in the sun -- amazon customers. if this increases the frequency of use, it is nice. carol: big automakers are looking to remain competitive and they are looking for a few friends in silicon valley. david: what are the technologies
that are converging? >> you have a tonic coming to cars, ridesharing that is going on, ridesharing services like yft, and these things are done by apps. that is the model everyone wants to get to, or you have a self driving car that comes in picks you up and you preserve some time with an app. andveryone stops owning driving their own cars and they go to these other services, they are going to be left in this old world is this model and that is the convergence that makes silicon valley very opportunistic and makes stuttgart and tokyo companies nervous. whyd: if you look at detroit needs silicon valley, you also look at the other side of the coin. what is google or apple need an partnership like this? >> google went out of the
business of making cars, a simple point. that is capital intensive, expensive, not high-margin. those companies are in massively businesses. they would like to partner up with one of the big car companies and have them be the brawn in the muscle that makes the car in google will do all of the brains that makes the car self driving and does the connectivity and web services, so the possibilities are kind of endless. people'stake eyeballs off the road, when you can do is only limited by their imagination. carol: in the travel guide, a tip sheet on how to go phone free. david: you showcase a debate that a lot of travelers have, do i take my smart phone with me or do i want to leave it behind? >> the real question is, what are you going to do with photos? you would do that, but a lot of
people wind up using their phones to take pictures with the wings of airplanes, which i do not know about you, but i'm tired of seeing, so what we recommend is a different things you may want to pick up that would make using a real camera a lot more fun, everything from ainters to many projectors, $100 polaroid camera that is fine and comes in a lot of colors. there is a drone we recommend, actually. the 80's are back. we recommend a fanny pack that you can put your passport and, a small point-and-click camera. using yourvitalizes camera and senator fun. david: there are those that say, i need to take my phone with me. there are a few apps. >> absolutely. whitensm --facetune your teeth. .ome have built-in filters
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. we spoke to reporters, ben stevens. >> "turning" is the process of opening up several new credit cards for the sign-on bonus, and then moving on to another set of credit cards. and getting those sign-up bonuses. people end up with 20, 30, 40 credit cards. david: this appears to appeal to a certain set of personalities. >> all the terms on the cards are very different. you need to be very organized, have a high credit score to begin with, and then if you do this wrong, your credit could be completely destroyed. carol: you cannot spend all of the credit you have access to or you would get into trouble. >> that would be really bad. you need to meet the spending requirements to get the sign-up bonuses, but not 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 -- are banks encouraging this? this asnk the banks see a necessary evil. they really want the affluent .ustomers who travel a lot they want him to be loyal. they will eventually make the money back, but they're doing some things to limit the number of turners who are out there, people who are gaming the system, making it rose that you can only apply for five credit cards in two years. carol: you wrote the story, it is a fun read and what is your advice to someone who may want to do this? >> be very careful before you get into this. maybe 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 and see if you can handle that before you get into the deep end. carol: but it is legal. >> completely legal. if the credit card companies that don't want this to happen, they can 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 some amazing conferences, a lot in european cities in june in berlin and london. there are also a couple in montreal and france. what we have done is not only suggested the conference to go to to, but maybe in between sessions, some things to do so it will actually feel like a vacation. david: there's a conference i can go to in cannes, 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: more seriously though a , lot of these european cities tried to cultivate getting people to come there for work. places that i, david gura, who lives in new york, would love to get out and see these other cities. >> there are a lot of tech conventions, not shockingly, start up fast in montreal, and they are ways for you to meet people who are pre-or post pivot venture capitalists, angel investors, so there's a lot of use of going and they just happen to be in great cities as well. carol: "bloomberg businessweek," is on newstands now. we'll see you next week. ♪
♪ ramy: coming up on "bloomberg best," the stories that shaped the week in business. saudi arabia moves beyond oil. the fed and the bank of japan issued new policy statements and earnings come fast and furious from a slew of major companies. >> they give us another problem. >> this is a serious realignment , what is going on in the smartphone market annapolis suffering. >> this machine is working, stay out of the way because we will not stop. ramy: from nobel laureates to leaders in sports, there is no plenty of food for thought in this week's interviews. >> t