tv Bloomberg West Bloomberg June 13, 2016 11:00pm-12:01am EDT
mark: we begin with a check of your first word news. 5 of the 53 people wounded in sunday's mass shooting in orlando are still in grave condition. the attack left 50 people dead, including the shooter, who was killed in a gun battle with police. investigators are still trying to determine a motive. president obama says the case is being treated as a terrorism investigation. aboutance says it can get 85% of flights on the air despite a strike. one fourth of the pilots have walked out because they now have to work longer hours without more pay. french garbage collectors,
railroad workers, and energy employees have also walked out because of other disputes, including new labor reforms. in set africa -- in south africa, oscar pistorius faces up to 15 years in prison for the 2013 shooting death of his girlfriend. the judge who originally convicted him of manslaughter has been ordered by south africa's supreme court to sentence him to murder instead. hearings of the case began today. the golden state warriors will attempt to win back-to-back championships tonight, but they will have to do it against the cleveland cavaliers without forward draymond green. after review of an incident with lebron james, he was suspended for tonight's contest. "bloomberg west" is next. ♪
emily: i am emily chang, and this is "bloomberg west." microsoft adds linkedin to its professional network. plus, our conversation with satya nadella and jeff weiner. apple's blueprint for the next generation. the tech giant putting its new commitment to software on display at the developers conference. we will update you on upgrades. strength in numbers. after spending a ton of money competing with each other and facing the same legal challenges, the two biggest daily fantasy sports companies could be teaming up. apple kicks off its worldwide developers conference with a slew of updates, including a smarter siri, apple pay, a redesign of its most troubled services, and upgrades to photos and messaging. the annual event is meant to woo
developers to create software for apple products, something that is ever more important as the company transitions away from a dependence on hardware. bloomberg's cory johnson joins us with more. let's start with siri. what do you think? cory: i think this may be the most important announcement they had today. siri is something they spent a lot of time with. every person who uses siri makes it a little better. i do not have a great personal experience, but a lot of people do. they are hoping that, now it has gotten to a certain level of maturity, developers will be able to put this into their app. they have created an app where you can say, give me my lyft. the car will go in and use that app. previously, you could only use siri with apple devices.
you could not say on spotify, play rihanna. now developers can use that software. i think that will be a significant change. emily: a lot of folks on twitter were excited about the changes to messaging. some of this could seem gimmicky, invisible ink, making it easier to emojify a message. i wonder how potentially groundbreaking these changes could be, when there are so much change going on in this space. cory: you know, i agree with you. i was not actually watching twitter or watching the keynote.
i was multitasking. as you know, the things going on in china with wichat are more involved. there is a bit of catch up going on. they showed off bigger emojis for old folks like me that cannot see. apple has made this a software thing so you can type regular sentences and figure out which ones you can replace with emojis. i think that will get traction. emily: i need more support when it comes to emojis. i appreciate that update personally. i could use help. what about apple pay? how much stronger does the update make apple pay? can they take on paypal at this point? cory: this is a serious competitive threat to paypal. gene munster is on the same
lines. apple has this great position. they have the users for these devices and are opening the api so companies can use apple pay. if you go on to an e-commerce site and you're using safari on a desktop or mobile device, safari users do more commerce than and when users. the ability to do that using apple pay will drive folks to do shopping on your phone and take market share, on some degree, away from the incumbent players. paypal has the most to lose. emily: cory johnson giving us a round up from downtown san francisco. thank you so much for giving us the scoop. i want to head to another huge story we are watching. hours after microsoft announced the $26.2 billion acquisition of linkedin, goldman sachs was advising another possible bidder. i want to bring in alex sherman,
who has been a scoop machine today. who else was looking to buy linkedin? >> we are still trying to figure that out. there can only be a handful of companies that have the resources and willingness to take on linkedin. just off the top of my head, pure speculation, you could see google being interested, facebook. after that, the list gets a little dicey. could there have been overseas interest? i suppose, but it is a big check to write for regulatory issues. we will try to do our best to break whatever company this was working with goldman.
we do not know if that company is still interested in buying linkedin or if they moved on or how close they got. all that information will be in the proxy filing when that comes out in a week or so. emily: i did ask jeff weiner today who else was potentially buying. he, not surprisingly avoided the question. what about other big tech m and a? we have not touched on this much because it is dwarfed by the linked in detail, but symantec was bought on sunday. >> it is just one after another after another. i cannot remember any stretch quite like the last two months. there is a sweet spot of companies being scooped up now, and i think that will continue. we will see a handful of others go that way, either being bought by strategic players or private equity. will we see any more megadeals? with linkedin off the table, will that spur interest with twitter? twitter was up 8% on the news linkin got acquired.
clearly, there are investors that feel twitter is a takeout candidate. microsoft ponying up a $20 billion check for linkedin, maybe that spurs a rival to pay $10 billion for twitter. emily: you wonder if it is realistic or wishful thinking. let's move onto scoop number two, fanduel and draft kings teaming up. >> there have been talks for several months between the two largest daily fantasy sports players that have been in the news quite a bit, first because valuations popped last year. both of these companies were valued over $1 billion. than they got into legal
trouble. governments started to look at these companies and started to think of them as illegally gambling. the idea of whether or not fantasy sports is gambling is still going through the process of being looked at by regulators, by lawmakers. but new york state, for instance, has banned both of these companies from operating. the ag has taken a hard look at both of these companies. perhaps by merging, the companies can limit ad spend. for anyone watching professional sports, there is no way you could have avoided the unbelievable amount of tv commercials from both these companies. it became a harmful arms race. assuming the legal problems can
be put aside, it makes a lot of sense for the companies to come together. they do the exact same thing. the question is, will regulators allow these two companies, the dominant players in daily fantasy sports, to come together? that will depend on how they look at the market. is the market daily fantasy sports, all fantasy sports, or all online gaming? those are outstanding questions. emily: regulation remains a huge question. alex sherman, i know you will keep us up-to-date. a developing story. baidu is cutting its revenue forecast for the second quarter, saying regulatory restrictions cut advertising from drug companies and health care groups. the company is citing a cut in sponsored link. shares are down 9% in extended trading off the announcement. coming up, microsoft and linkedin one more of your workday. we will hear from the ceo's on the megadeal. ♪
emily: turning back to the big event in san francisco, apple's worldwide developers conference. among the announcements, changes to siri, getting smarter and perhaps more independent. apple opened siri to outside developers for the first time as the company fights to catch up in popularity with google and .in popularity with google and amazon's ai platforms. is it too late? joining us now, one of the early backers of siri, and tim tuttle of mind meld with brett taylor. brett, opening siri to developers, is this game changing? >> they opened up messaging,
siri. for the first time, i think you will start seeing third-party apps in every part of your ipad experience. people who order ubers with siri probably order through messenger as well. being able to see your app permeate the entire experience of your phone rather than being relegated to the home screen is a meaningful change. it is something android has been doing and competing messaging apps have been doing well. i think your apple phone experience will substantially change. emily: can they maintain the quality? >> i think they will. apple are using this technology for extensions.
they launched two versions of ios slowly and deliberately. they have a deliberate approach. that has always been apple's strategy, quality over quantity. quality overspeed. google and others have taken a different approach. apple's approach has worked well to date. it will be interesting to see if there are killer apps. emily: gary, there has been a lot of buzz around what siri has not done yet. were you expecting more by now? should there be a siri killer app already? >> i am gratified to see what happened today. it is the digital assistant revolution. this is six years since siri launched, five years since apple
bought it. apple has moved from closed to open, from 12 apps that launched, five in able domains prior to today. i think this is less than meets the eye. they announced six new domains. they curate each of those six domains. this is a cautious step into the open world. maybe they are chastened by microsoft's experience with cortana. emily: amazon's alexa has been getting a lot of buzz. should apple be farther ahead when it comes to ai? >> there is a user set that wishes they are farther along. it is a big step to open up the siri api two developers.
it is a very deliberate step. they are not the first mover. amazon opened alexa's api last year. cortana last year as well. google is planning to open their api for google assistant. they are not the first mover and do not need to be the first mover. emily: gary, you are an investor in another personal assistant company that facebook and google have reportedly tried to buy. what is coming here? >> to your point, the ceo of vidlab has talked about the explosion of applications. apple has 13 million registered developers.
of those, you have to say there are six domains open today. phone, messages, photo, search, ride-hailing, workouts, and personal payments. those are nice but limited. 13 million developers have their domain open for use. the opportunity here and the excitement should be around the fact that these digital assistants are now open. it is a race to a single interface, if you will. the world is now opening. the question is, do they stay open on existing ecosystems, google and apple? five major companies, google, apple, facebook, amazon, and microsoft. you have the insurgents. tim over here, vivlabs, and the opportunity is to create an open environment with natural language enabled ai for the entire world to develop.
emily: what didn't you hear today that you would have liked to? >> there were rumors messaging would be opened to android and other platforms. that did not happen. there are a lot of announcements. there is a lot of -- we were chatting backstage -- a lot of major technology companies are competing on common fronts. ai, messaging, mapping. mobile operating. in the messaging, facebook and others have an advantage because their platforms are open to all mobile phone platforms. they are reaching a broader range of users than ios. emily: i asked a satya nadella earlier today about ai and what the deal with linkedin means for the future of cortana. i'm curious. you run a company that competes
with microsoft when it comes to productivity. what do you think of this deal? does it change the competitive landscape? >> it was a surprise to me, a drastically new market for microsoft. a steep price tag, but it is a talented team at linkedin. there is a lot of interesting product integration, whether it is things like outlook and things like cortana, dynamics and data in linkedin. if you execute well, this could make both companies more valuable than they were independently. as you know, integrating two extremely large public companies is a herculean task. emily: given that apple has not made a huge deal, does this change the competitive landscape for apple? >> linkedin is primarily business service.
apple defines itself as a consumer service. on the other hand, this is a network with a great number of users. people have personal lives and business lives that overlap. it is a strategic move by microsoft. apple is behind in social networks. emily: people have talked at length about the possibility of apple buying twitter. it has not happened. certainly interesting to watch. gary, brett, tim, thank you all for joining us. another story we are watching. bitcoin surging to a two year high out of expectations supply will shrink. mining will be reduced in july,
citron research short seller andrew left says the stock is too expensive right now. in a statement, he said, i respect zuckerberg and his team, but investors have to put the size of this in perspective. snapchat is becoming a beast. left was bearish on pharmaceuticals in december before it fell 40%. facebook shares fell the most in
x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. >> risk aversion is stirring a fourth day of losses in the asia-pacific market on concerns about the eu referendum and central-bank meetings in the u.s. and japan. the regional benchmark seeing its longest slump while the yen remains near a 3.5 year high. government debt has slipped to record lows. baidu cut second-quarter revenue forecasts on more than $380 million, blaming in part a drop in spending. that follows the death of a university student due to cancer
treatments he found an online search. microsoft will borrow much of the $26 billion it is spending to buy linkedin, eating called the largest acquisition ever. the all-cash transaction was one of the biggest tech deals on record. deal willhopes the help it in ahead in the social networking space. those are the headlines, powered by 2400 journalists in 150 bureaus around the world. let's get the latest from the markets -- a good day david. day is theher bad best way to describe it. noon -- let'sill get started with what's happening in the fixed-income state. the yield are either pushing
more to the negative were closer to zero, so the japanese 10 , the 16 basis points under aussie dollar touched 205. the shorter that she looked toward the shorter and of the yield curve and we are well into the negative curve. let me show you how it looks in japan. you almost don't see it anymore. -28 points. that is still treating through into the equities and we are just opening for the afternoon session. we were down 1.3%. we are below 16,000 for the first time since april on the nikkei 225. -- we to see where we are -- 7.5%.as much as 9% when market to watch closely is
australia, which is playing catch-up, the biggest drop since february. the only group of stocks that are getting a decent bid are the gold miners around 2% in what is a down day across the region. ♪ emily: microsoft is buying linked in. the acquisition is one of the largest ever seen in tech history. they are paying $196 a share, after a premium on friday. the news sent linkedin shares soaring. it is bigger than the previous acquisition. it is taking on $25 billion in debt to pay for it. i spoke with the ceos and began
by asking of bout -- about -- asking about synergies. >> it is about bringing the cloud of microsoft and the professional network. the dream is how to connect the world's for mutual users to get work done more seamlessly. that is the vision. bringing the network and the cloud is transformative. i have been thinking about this and, in february, we had serious conversations. we talked about the possibilities of the product and the coming together and we have a full conversation that will allow us to accelerate what we wanted to get done in this next phase of growth. emily: this was the time where you and i had a conversation
about how big you think the future potential of linked in is -- linkedin is. >> the future just got bigger and it is always about a long-term mission and vision. you think about one billion customers and the ability to integrate our network and social fabric, the office, the window, skype, and the possibilities are endless. emily: it is a microsoft cloud and linked in will operate independently. >> it is independent and integrated for customers. there is a dynamics that is part of that and you can start completing the scenarios.
emily: link and did not grow as fast as the market expected it to. microsoft and the market, what is the change in the strategy? >> part of it is the alignment of the purpose and the customers within the enterprises. it is about sticking with a path with the mission and the vision and amplifying it in the aqueous system. -- in the ecosystem. emily: howdy make sure this is not like nokia or skype -- how do you make sure this is not like nokia or skype? >> we have to be thinking about expanding the market opportunities and riding the technology waves of the future. this is the core of microsoft and we look at the dimensions and this checks all of the boxes.
when it comes to integration, we will try a different approach and it is something that we have talked a lot about all stop we want to be integrated when it comes to -- about. we want to be integrated, when it comes to professional networks. it is going to be very different. if you look at our past.
minecraft was a tremendous success for us and, down the road, there is a team that has been one of the most successful. we have a history of getting it right. emily: you are getting a huge enterprise sales force and a customer base. how much do you think microsoft can scale the linkedin membership? will this grow? will this skyrocket? >> well, was certainly have potential. we have 433 million members and we have the opportunity to bring the value to over one billion customers. that is the plan. emily: are there big acquisitions to come? >> i am excited about the linkedin acquisition and i am excited.
>> we will see how the industry response. >> will be interested in the industry and the customers. it is all about us realizing a mission with the customers. emily: that was the microsoft ceo and the linkedin ceo on the announcement of the acquisition of the social network to be completed later this year. i wanted to talk to my guest. and, the bloomberg columnist. you have some thoughts about this acquisition here. if microsoft was a smarter and better company, linkedin never would have existed. >> my point was that microsoft was essential for many at work and, if they had been smarter about seeing where workplace communication was going, they
would not have let this company do file storage better than microsoft. it would not have allowed a company like slack to emerge. it would not have allowed for the creation of a network like linkedin. emily: you were taking on linkedin and microsoft. what does this mean for you? >> any startup would prefer to have competition gobbled by a bigger company. emily: you think gobbling will happen. >> i think how the products will come together, there is uncertainty.
we got phone calls. emily: who got the better deal? the deal is worth 26 times linkedin's earnings. >> this is a painful reality for linkedin. stock prices and valuations of many software companies coming down sharply at the end of last year and the beginning of this year. there was a day where the linkedin stock fell in half, after disappointing revenue numbers. so, on the one hand, you mentioned a 50% premium from where the linkedin shares started. on the other hand, the stock prices were higher, as recently as mid-january. it depends on how you look at this deal. emily: is this a war on salesforce? >> it might be. linkedin or microsoft might have
had a hard time. if you look at the presentation, it was focused on sales and it was telling of where they are taking the business. emily: is twitter roped into selling? >> i tend to think that it doesn't have a thing to do with twitter. it is not an advertising company. they sell to recruiters and other professional people. i'm not sure that people who hope for the twitter acquisition, that. this means much for them -- that this means much for them. emily: microsoft is in the advertising business. how does this change the
competitive landscape? >> people are trying to figure this out and they are trying to piece together if this is about sales, cortana, integrating with office. microsoft has had success with some acquisitions. clearly, a lot of the acquisitions have not hit a mark. we thought this would be an acquisition that we will look back on and say it was not so good. emily: you ended a piece today by saying, "will microsoft do this without breaking the new toy?" >> that is the question. this deal could look smart, if microsoft does what they promise, integrate linkedin into other essential microsoft tools, like office and outlook, and make them work together better. that is a big "if."
all of the microsoft acquisitions have ended badly for microsoft and for the acquired company. that is a big question. will they buck the recent history of terrible dealmaking? emily: google did this with youtube. we will watch this closely. thank you both. the u.s. aviation regulators are cracking down. amazon has been fined $350,000 for sending hazardous cargo. this is not the first time they have been in the hot seat for this. the faa released a statement that said that amazon has been
>> it is not enough. it will lay some groundwork to upgrade to the next versions of the phone and the good news is that important things happened today. emily: what do you think was the most transformative? >> opening up messaging to third parties. apple has made it difficult to add applications to the operating system and they are getting more free with doing that. what that means is they will make the phone do subtle things a little better and make things a little better. emily: tell us about this. >> they were going to introduce data messaging services on the phone and a lot of trends emerge, namely that apple is a
profit driver of the last decade and i thought that was a takeaway. >> they talked about the users going from 13 million to 15 million. the music side is on the outside. emily: there was drama, tumult in the music department and they talked about a revamp. >> the people we spoke to, the extent to which you see jimmy and trent, the architects of apple music, involved in the
project will indicate. they were absent today. it shows that, perhaps, it is becoming an apple product and they are taking away the heritage. >> in a sense, they have a framework to keep it moving and i think it is fine\ if apple takes us over -- it is fine, if apple takes is over. >> this is the ability of apple to integrate acquisitions. the talent they bring on board as part of that. this is the biggest apple deal ever done. they said they did not do it well. when they talk about tim cook
doing more deals, it hints at the things they need to change. emily: what apple announced, is that a big threat? >> it is a huge deal, because it is safe and easy. they made it safer and easier to use. i think that this will be a major competitive structure and we will see that in the next few quarters. emily: what about microsoft buying linkedin? >> it increases pressure on tim cook to do a big deal. we are talking about 26 for linkedin. apple will do something big. emily: you think this will happen. >> eventually, they will have to. they said as much. we will take tim cook at his word. emily: what do you think makes sense? >> the company we are excited
about is a company with a $4 billion private valuation and may cost double to acquire. think about the iphone and how consumers will use technology different in 15 years. that is what they do. on the automotive side, there are things with the self-driving cars. emily: all right. always good to have you here. and, our apple reporter, thank you. do not miss the all-star lineup of titans joining us on the bloomberg technology conference here. we will hear from steve and mark tomorrow here. more bloomberg west, next. ♪
emily: welcome back. they are selling the standard product business to a group of investors and it is set to close in 2017 and is subject to review by agencies. another ipo is in the works. they were looking to raise billions and there is a price range of $12-$14. if the company completes the offering, it would only be the second company to go public in the u.s. this year. this follows acacia. now, it is time to find out who is having the best day ever.
if you did not catch the cameo on silicon valley, here is a listen. >> richard hendrix is the founder and ceo of pied piper. >> it is splendid to be here with you. it is a three or three with a breathtaking view. >> richard developed this technology in my incubator. i was listed under the white pages with a typo that could not be changed. google did just that. >> definitely checking that one off of my bucket list. that was so much fun. tune in, if you have not seen it. that will do it for this edition. we will be joined tomorrow from