tv Bloomberg Technology Bloomberg November 3, 2016 6:00pm-7:01pm EDT
-- president obama campaign for hillary clinton today. pres. obama: all the progress we have made goes out the window if we don't win this election. we have to work our hardest this week. we have to work like our future depends on it because it actually depends on it. also, donald trump hit back on the campaign trail in florida. mr. trump: this guy ought to be back in the office working. he won't be there long, thank goodness. mark: in south carolina, friends and family of walter scott, and unarmed black man shot by police officers last year, testified today in opening statements. cell phone video footage showed michael slater shooting scott in the back after he ran from his car after being pulled over. he faces 30 years to life if
convicted. syrian troops will allow rebels to leave aleppo after a temporary cease infighting. that is according to the russian military. in new york, i'm mark crumpton. "bloomberg technology" is next. ♪ brad: i am brad stone in for emily chang. this is bloomberg technology. 20% after aves over disappointing third-quarter snapshot. plus, escalating cyber threats with the u.s. election just days away. homerun run with
the most-watched world series game in 25 years, but the nfl suddenly appears to have a ratings problem. gopro shares plummeting as much as 25% in extended trading. it has become the latest hardware maker to fade in the holiday season. the forecast in the third quarter missed analyst estimates. gopro also admits the estimates -- also missed the estimates for third-quarter sales, down 40% year-over-year. is $104 million. the ceo told investors on the earnings call that production issues were to blame for the week results. >> as a consequence of our compromise production ramp, we were unable to restock channels that had been cleared legacy product in the third quarter. furthermore, we anticipate difficulty catching up to match forecaster demand during the
fourth quarter. york, bloomberg technology reporter. stockerg staff -- gopro's tumbling. after thinking that it would scale to the skies. what is ailing gopro? >> they are blaming production issues but this is really a bad execution story. they didn't have the problems last year. there was quite a lot of time. ofy finally fixed the ease use issues that people had. you take that and mary that with the production issues. brad: getting into the drone business was supposed to provide a next act for gopro. when you look at this balance sheet and the way that wall street has reacted, are there any bright spots?
>> he was very coy about it. he did say in the fourth quarter it would be a small amount of revenue compared to the camera. the biggest thing they have going for them is their brand at this point. they have excellent features, better sensors, technology. the price point is similar. from a pure tax standpoint, dgi wins out. there are other startups getting into this as well. the brand is the only bright spot because more people in the u.s. know about gopro. shenzhen-based drone maker has been in the business for years. by dgi potsprised competitive response to the drone can? what is interesting is
like the supply chain issues across the drone industry appears to be similar. is theiro is saying expectations of more than 20%. looking at the execution that they have shown so far, we are concerned about, like, are they able to pull off the opportunity that they have in drones. brad: when you say supply chain issues, what does that mean? andndra: you can order it they will take your money but you can't get it. brad: will it get here for christmas? jitendra: they are saying december 4 dji. we were really hoping they could leverage the massive brand they have in terms of selling to the 10 million plus customers. when we did surveys, the interest was high well.
these guys were not able to resolve these production issues. that is raising a lot of execution risks. selena, you wrote a story that highlighted problems and other hardware maker, hit -- hardware maker, fitbit. are they related? is there a problem among all these companies as we head into the holiday season? selina: they are both young companies who have recently ipo'd. they really haven't been up to their expectations. i think taking a step back and looking at these companies, though their products have little overlap, they are both in markets that aren't quite proven yet. i think that is the question that the investors are asking is if you can turn a fad into a long-term sustainable company. gopro is now trying to do drones. the question, does everybody
need a tiny little camera in addition to their smartphone? you heard analysts on the call asking what the grand vision for the company is. you talked about making it a media company. he said, we see ourselves at the epicenter of social and capturing images and sharing that. but there are so many companies at the epicenter of that. , they are nowp calling themselves the camera company, and they will probably make it easy to upload. brad: what is the next move for gopro? they did -- they hired a designer from apple and stock bounced. have we seen the results and what is their next act? think they have sold a loud the core problems with the software. a year ago, it was hard to operate the camera.
you had to together different editing software. it took a very long time for all of that to work together. now i have made some acquisitions, really invested in their hardware and software. their next move is making that even easier, even more shareable , trying to expand their sales in drones. this whole media content strategy is, i think, way down the line. brad: what should make's next move be? jitendra: focus on the execution. taking the right steps that they have done and leveraging the brand. they have the opportunity but you have to move very quickly or you will lose it. brad: bloomberg technology reporter selina wang in new york and jitendra of bloomberg intelligence. thank you. still to come, the cyber firm
brad: one stock we are watching, symantec shares are lower after forecasting earnings for the current quarter that missed some estimates. symantec is the biggest maker of cyber security software and it has struggled as the pc market decline and hackers develop sophisticated techniques. shares areye surging. a losspany is forecast ofhis -- -- forecast a loss
$1.50 per share and without that it will be more than one dollar per share. an extraordinary series of events from hillary clinton's use of primary -- a private e-mail servers to ones like this 1 -- mr. trump: russia, if you are listening, i hope you're able to find the 33,000 e-mails that are missing. brad: we also have the dnc hack this year and countless claims by donald trump that this election is rate. the cyber security firm that first identified the russian --olvement in the dnc hack there's ceo joins us for more on the unprecedented role in cyber threats in this election. i don't know what is more interesting, the 10 thinning of the world series or this next
week leading up to the election. do you think there will be smooth sailing? >> in the past is any indication, it seems like there is some new event that happens almost on a daily basis. e-mails found on some of these serve or new e-s that are linked. i think it will be an interesting run-up to the election. sanger had a piece in the new york times highlighting the possibilities of next week. ultimate intent of hackers was not to change the results, but it could throw question marks over the results. george: i think when you look at what has transpired from a we have done and how the government has come out and named russia as one of the actors, i think this is one of the same things as the past. cyber is a new medium.
1970's,950's, 1960's, it was a similar methodology of trying to introduce chaos where you can. think if we look at the election and what we have done -- what does it all mean, are the elections going to be hacked? i think that talking point helps to destabilize what is going on. was allegations that maybe they got involved in the ukrainian election with similar tactics. they are a very capable adversary, certainly very good on the cyber side, which is things we see over time in these sorts of activities. their method of operation hasn't necessarily changed. the medium has changed. they are more focused on cyber
because they don't have to leave the cover of their chair. when you look at the message, whether a piece of malware or a it is allck, available on the internet. tod: if it's simple enough say that they are trying to support the candidacy of donald trum or are they trying to throw the election system itself into chaos? like most governments, they collected a lot of information. if you look at all the e-mails, things like collecting what is happening behind the scenes is very important for them. that collection mechanism is not unique. what has been unique in this case is the fact that it ended up on the internet and people are free to look at it. does that influence the election one way or another? we will see. american who turns out next tuesday and goes to an electronic voting machine is going to wonder, is this voting machine safe?
is that unequivocally a yes right now are there still some in your mind? george: there are electronic voting systems which are susceptible to attack. in general, statistically, the voting system is not necessarily going to be impacted by hacking to change the election. brad: how about voter rolls? is there a possibility a voter turns out who is not registered to vote or they turn up at the wrong place because of some tinkering from outside the country? the sort of lack of security that exists in the environment today. it is very easy to get in. could they manipulate this? absolutely. will it happen or make a meaningful difference? don't know. brad: in the political process or business world, many have
been slightly traumatized by this election. no companies like salesforce whose internal communications were made public as part of the colin powell hacks. what have the lessons been in this election cycle? treating we have learned something that future candidates or companies today can learn from? candidate orer a company, they all face similar threats. most organizations have been compromised in some fashion. that theo is technologies that are put in place to try to defend against these hacks are inadequate. malware, our technologies can't keep up. then, having the ability to find them very quickly before the data is stolen will be very important moving forward. it is easy to get in with a and all the data is
being dumped because it is not encrypted. brad: a spear fish is basically user error. george: they clicked on a link and either give out a username and password or downloaded some malware that wasn't captured by their legacy antivirus technology. brad: do you think all these traumas, going back to the sony, have undermined our use of e-mail? our candidates and ceos thinking twice before clicking to hit the send button? guessing there are going to be a lot of venture capitalists who invest in e-mail security companies that focus on locking down the e-mail service. george: next tuesday, the department of homeland security, what is different about the precautions they are taking for next tuesday or even how they are spending the day, then it was four years ago? george: there's certainly a
heightened visibility into what is next. just think about the denial of service attack that took place a couple of weeks ago. something like that, couldn't take out social media, systems design to collect information? on socialt the impact media if it was down during the election day. brad: you think we will see a denial of service attack next week? george: i hope not. brad: shares tumbling. where other revenues revenue growth? ♪
brad: facebook shares plummeting over 5.5% on thursday. executives suggest that the company probably won't be able to keep up its explosive pace of growth much longer. in the call, the ceo told investors that the company would increase the percentage of bad. michael wof spoke about it. >> ending they are hitting the upper limits of how many ads they can show you. i think also, a lot of their growth this year has come from political advertising which of course won't be here next year. they now are in a position where
they can't get more revenue out of the internet. historically, a lot of their revenue growth has been taking away money out of smaller websites. going forward, they will grow fast, but it is not likely will be anything unless they invent new parts of their business. facebook messenger and also whatsapp, which are massive. >> why are people so preoccupied about the advertising revenue? they have been making moves, acquiring any one of them for its -- anyone of interest. >> that's the only place they are getting revenue. the other deals that they have done art really delivering any revenue. the average revenue per user is zero. the vr business is also not good. there is revenue way off in the future. they are an advertising-based company and they are going to
grow to the extent to which money moves to the internet and to the extent to which they can capture it. >> for the whole industry, it will be harder for the ad supported content companies, the likes of google, facebook, apple, amazon, microsoft. companies is in a different position. in the case of facebook and google, they are controlling over half of all digital advertising. when you look at others, there is always an upstart, someone who comes out of nowhere. , which isve snapchat capturing a lot of time and attention, especially from millennials. they are coming on board this holiday season and they will have a lot of new advertising products. amazon is really in the e-commerce business and they are nowhere close to this. and apple competes with facebook
primarily now on its messaging product. >> is this really pricing a good thing for facebook, maybe putting it more in line with what it should be valued as? or what do you make of the 29 times the estimated? >> facebook is a control company. mark zuckerberg controls the company. he is going to be less worried about what the near-term stock price is versus his ability to grow long-term. the main reason he will be worried about the stock prices is their ability to give options to their employees and have increasing growth to the earnings of their employees. brad: that was activate ceo michael wolff. in this edition of out of this world, looking for a new supplier to launch its in fly -- in-flight wi-fi satellite into orbit. it bought two launches from
spacex. after an explosion destroyed the -- inmarsat'se at order was delayed. companies are planning launches close -- planning launches sooner than spacex. they will relaunch the project with spacex at a later date. coming up, the chicago cubs break a 103 year curse with an historic world series win. news,f you like bloomberg check us out on the radio. you can now listen on our bloomberg radio spp, -- radio app. ♪
's benching reinforcements to the campaign trail in michigan. polls show clinton with a one-point lead there. former president bill clinton met with black ministers in detroit. clinton will be there on friday. mike pence and ted cruz will campaign for trump in michigan today. the south friend of korean president has been arrested following allegations of influence peddling. he was taken into custody as many opposition lawmakers demand that the president also be investigated. nearly a year after the terror attacks in france, tourism still is not back to normal. foreign visitors who arrived by airdropped 8% between january and october. prime minister manuel valls will have a meeting next week on how to promote tourism.
the group for hosting the 2020 olympics in japan says all options are on the table. the cost could exceed $40 billion -- $30 billion, four times the initial estimate. it is just after 6:30 p.m. thursday here in new york, 9:30 a.m. friday morning in sydney. paul allen has the markets. paul: new zealand up and running on the last day of the weekend. down about 1/10 of 1% right now. we are also expecting declines on the asa except the open up about half a percent. nikkei futures looking pretty flat at the moment. some are earnings out of japan. contacthi, suzuki, to to name a few. it might be worth keeping an eye on the australian dollar today as well. it has been steadily creeping up over the past few months. we had the reserve bank of
australia releasing its quarterly statements on monetary policy. that will contain a few updated outlooks for growth and inflation. we also have retail sales out for september. over in singapore, it will be worth watching singapore airlines today. after the close yesterday, singapore air announcing a slump in profits on excess capacity and aggressive pricing waiting on that result. more from bloomberg technology, next. ♪ brad: this is "bloomberg technology."
the chicago cubs had an epic win in game seven of the world series to end their 108 year drought. the team wasn't the only one who hit a home run. fox sports says chicago's game seven win over the cleveland indians was the most-watched world series game in 25 years. it gave u.s. major league baseball a much-needed ratings boost. baseball isn't the only major sport that has been needing a pick me up. for more on this, i want to bring in longtime media exact sarahk kane as well as from bloomberg. it is great for chicago and it is great for major league baseball. was this ratings turn out such a big win for the league? >> and absolutely huge one for the league. this was the highest rating in
25 years for major league baseball. to have 40 million viewers nationally watching the game is pretty extraordinary. for 280just bad news park avenue. the national football league, and that is their headquarters, being hit by get yet another leak that is starting to grow share. brad: let's talk about that. it is on the cover of this do you"business week." think it is a fair juxtaposition? game seven of the world series compared to the week to week performance of the nhl -- of the nfl in an election season? i think it is because your average world series game will usually not see ratings near an average primetime nfl game. that is a dominant the ratings have been over the past many years. me, itop in ratings, to
has just been an absolute shock. in the story, felix run through all the things that might be ailing the nfl. is there one thing that you highlight? patrick: i don't know if it is necessarily too many games. monday night games, sunday night games for six years now. even a london game. i think the quality of the product on the field has been a challenge. i am hearing from the millennials i know that they are turning off nfl games for the first time in their lives. i think one of the nfl's best products, it's red zone channel where you're able to watch several games, i think it has become very cannibalistic to existing ratings during in game shows. brad: one culprit might be the internet, right?
streaming games on yahoo!, twitter. >> absolutely. these are companies that are almost betting on nfl needing another way to find audience. twitter this year had a deal with the nfl to stream 10 thursday night football games. that is sort of at the cornerstone of their media strategy for the future of twitter. they want to do that with baseball and hockey and basketball as . absolutely, i think that these are new channels for the nfl to explore that we really don't have great ways to measure yet. brad: i want to play a quick clip from an analyst who actually kind of blame to nielsen an inability to track some of these new channels. >> mobile is not reliable. otherore and many measurement services are not reliable. advertisers don't believe them.
nielsen has been the industry standard for 50 years and nobody believes nielsen. can't nielsen do a better job monitoring these online channels? gilson -- felix mentioned in his story that they are already working to define their ratings. they absolutely need to do more with the social networks, with the online streaming sites to try to get a better sense of how many people are watching when they are watching and what the engagement is like. twitter, their first thursday night nfl football game, they told everyone that 2.3 million people watched it. we don't know what that means. then they watch it for the whole time, turn it on for a second, retweet a tweet? i don't know what that 2.3 million means and i think nielsen would be one of the places to tell us. brad:are we shooting the messenger by blaming the olson? has been inlsen
this business for 50 years. i will take a devil's advocate for twitter being cannibalistic. i don't think it necessarily is. i think there are so many sources to find scores, so many sources to get instant results and instant highlights. i don't think you will ever see the nfl surrendering a sunday night game or a monday night game. there is a reason they are giving thursday night game access and i see it as purely additive. brad: does the nfl learn anything from last night from this amazing world series? patrick: you would hope so. i think that the nfl still is an incredibly powerful sport but i worry that, over time, it could go the way of some other sports. if you look at boxing, horse racing, baseball. doesn'tope that the nfl fall to the same fate as boxing in the world. brad: and hopefully the
congratulations on the funding. we were talking about this for a long time. did you bleed a little bit to raise this money? but wouldn't say we bled, the funding environment definitely cooled down. is ae operating in a little bit underappreciated right now. a bearishittle bit of outlook this year. that valuation was the same as your previous valuation. that?hould we take from >> would have loved it to be a little higher. i also think it is fair to look at last year. you probably have a year where the prices were a little bit inflated. million and still one of the largest venture rounds raise this year, specifically in our space. brad: let me put you on the hot
seat. you have been in your coverage of postmates a little skeptical of not only the delivery service but the luxury and door --. funding roundtes surprise you? >> it is a super competitive space. certainly investor sentiment has turned against it somewhat. a round with a share price lower than a previous round. we have seen already sort of signs of trouble in the space. there is still a lot of investment going in. just raised a bunch of delivery uber's service -- they are investing very heavily. i saw some of them in mexico city recently. there is still a lot of investment being made that we haven't seen -- but we have seen
an increase in skepticism. brad: i read a little bit about the structure of the round or anything you had to offer investors to get to that $600 million violin -- $600 million valuation. i read a lot about it, too. when we look at the term sheet and when you look at the offer it is ahad, we believe very fair deal. as far as i can tell, there is nothing in the structure of this round. voters say they do sort of a death star thing. they kind of get into this will be product. how are they using their capital advantage. brought i think they
something not seen before. you would fight the war with excellent products and innovation. but i think it has been unusual that you would use your balance sheet. brad: isn't that a time-honored amazon tactic or a recent tactic. i thought one of the most interesting things you said in my conversation with you is that many of the smaller players, you can imagine teaming up. what would that look like? eric: i think it is -- bastian: i think it is important to look at the total companies. there is a limit of a sentiment that we are just here because amazon or and uber has not done it. that is baloney. we are here because we deserve to be here because we have grown
extremely fast. if you want to think beyond the next couple of years, if you want to create a truly large-company, you have two ways to do that. one way is to go ahead and compete with amazon and uber. you can try that as a startup. another alternative is that you to create a large company by teaming up with other players, international players or national. brad: amazon, with amazon restaurants, it basically makes deliveries free for prime members. they have got to be losing a bunch of money with that. now that they are focused on the restaurant space, what is that mean for postmates? we have not seen the efforts from amazon and have not seen or heard from her over -- from bloomberg in that space -- from uber in that space.
this brings up a little bit back to a situation that often perfects his -- often perplexes me, or people thinks it is impossible to make money in that space. we have a product that is virtually free if you sign up for our subscription service. limited --th, on unlimited free deliveries over $25. we were very well prepared for the competition ahead. especially given the fact that we cocreated the space. was the firstates company to bring on demand delivery to the minds of customers. eric: one of the things that i think most people think about is that you can get anything. and a type of food you want or maybe someday anything you want. at the same time, to make the business model work, you have acknowledged that you have to
have some restaurants that are cheaper and the everything set of restaurants that are going to be much more expensive. in my getting that right -- and i getting that right? bastian: when we started the company, we wrote it down in details and actually talked about it. we launched a premium product first that a lot of people who can afford it to get access to goods they wanted in a short period of time. the latest iteration of that is our plus product which integrates merchants. on top of that, we have a subscription service. plan tolot like tesla's start in a premium segment and bring the price down significantly. your first international market, is going to be london? we're still thinking
about it. i don't want to be off with the predictions. from bastion lehman postmates. brad: tomorrow on bloomberg television and radio, join us for full coverage and analysis of the latest u.s. jobs report. keene at 8:30 a.m. in new york. coming up, chinese internet giant baidu just joined an alliance with a major television company. ♪
joining us now, a bloomberg reporter from tokyo, and gordon chang, author, reporter. gordon, i'll get to you in a minute. peter, you have covered these two companies were a long time. what does this alliance mean to you? peter: it is an important step for both companies at this point. the chinese government has been looking for ways to improve the efficiency of the state owned enterprises throughout the economy. the oil companies, railroad companies, telecoms. the telecom sector is really dominated by these three companies. particular,nicom in they want to increase the efficiency of some of these operations. they are hoping that baidu can bring some of the private sector efficiency. brad: gordon, that is going to be unusual for a lot of our viewers. why does the chinese government have anything to do with the
partnership of these two companies? why would they have any interest in seeing them get together on these areas? the premiere of china a year ago announced his internet strategy. the idea was that the internet was going to revitalize chinese industry, including state owned enterprises. they are looking at the telecom companies like unicom, china telecom, and they were thinking of merging them but they realize that what is going to do any good. they thought, why don't we spice one of them up with baidu. sense in, this makes the way that you put the search function on the 3g handsets of unicom. if you are talking about mixed ownership, they are buying into a company with very low growth potential. brad: what does it do for baidu? they only have distribution agreements with the large mobile carriers.
gordon: i don't think it does very much. baidu as a partnership with china telecom from last may. they are really able to put its products onto the telecom services. i don't know what this does for baidu. i know what this does for unicom. when they announced on october 22 that they were thinking of this mixed ownership scheme, china unicom stock really sort in hong kong. for baidu, it doesn't do them any good. baidu is a company in trouble. ,hey had a really bad quarter the first quarterly drop in revenue since 2005. nonetheless, i don't see how this would help. our colleague wrote an interesting gadfly column today. it describes it almost as a romance indescribably possible offspring of unicom and baidu. what did you think of that analysis? is this and can to a merger or
union? peter: i think it is the beginning of a potential romance to stick with the analogy. the two companies are trying each other out. a relatively low investment form of cooperation at this point. as mentioned before, baidu has fallen behind the other leading internet players in china, alibaba and 10 sent in particular. they tried a number of strategies including this online to off-line strategy. this is an experiment. perhaps it goes someplace, perhaps it doesn't. gordon, i will let you have the last word. what may come next? gordon: we have seen zhejiang combined seen xi former state enterprises into monopolies.
in japanese tried doing this the 1980's and everyone liked it at the time but ultimately, it didn't work out. i don't think it is going to work out for china either. what plagued the japanese is going to play the chinese as well. brad: we will have to leave it there. thank you for joining us. that doesn't for this edition of "bloomberg technology." remember, all episodes of "bloomberg technology" are now on twitter. check us out weekdays at 6 p.m. in new york. ♪