tv Bloomberg Technology Bloomberg January 23, 2017 5:00pm-6:01pm EST
business leaders he named to an advisory panel. the president said the administration believes it can cut regulations by 75%. he also met with labor leaders and workers. florida senator marco rubio says he will vote for president trump's secretary of state nominee, rex tillerson. marco rubio joined lindsey graham john mccain in saying they will support tillerson this fight ongoing concerns about the former exxon mobil ceo's past dealings with the russian government and president vladimir putin. benjamin netanyahu has accepted president trump's invitation to visit the white house next month. netanyahu announced plans for the visit after delaying a vote on a controversial proposal to annex one of the west bank's largest settlements. george h.w. bush is being moved from intensive care in houston to a regular floor. the president was suffering from
bacterial the born yet. his wife, barbara, has been discharged from the hospital. global news 24 hours a day, powered by over 100 journalists and analysts in more than 120 countries, this is bloomberg. tpp gets the ax. why trump is dropping america's bilateral trade deal and what it means for tech companies. yahoos fourth quarter revelations, and the verizon deal is still in play. uberleepless side of the side hustle. it is proving costly for some workers.
first to our lead, president trump begins his first week in office and is taking swift action on trade. he signed executive order putting the u.s. out of the transpacific partnership. a 12 country deal that sought to liberalize trade between the u.s. and the pacific rim, including japan and singapore. trump's record -- press outlined the reasons. >> i think this president pulling out of the agreement is not just about this agreement. it is symbolic, both here in america and around the world, of a new era of trade policy, one that will put american workers --st and four masked foremost, and assures the rest of the world but the way we negotiate bilateral agreements will make sure we get something out of these deals. steven mnuchin says he would work with president trump to study the trade relationship with china and assess damage from other, quote, unfair
tactics. alex, we know the pledge has been to unwind the trade deals and this might not be the last. the president a countless to campaign promise. he said he would end our participation in the tpp and decided he's a paper this morning double do it. it will not be the last one. soon to come is nafta. the press secretary reiterated, he is not a fan of the deal. we expect him to give notice to canada and mexico soon that he intends to renegotiate nafta. proposed secretary said he would look into the relationships. how is the rest of the world racing themselves? these two moves, nafta and tpp, were well telegraphed. i don't think anybody around the world is surprised. countries like vietnam and
singapore were disappointed and hoping trump might reconsider, but i don't think they should be surprised. the reaction on capitol hill was interesting. the first statement in my inbox came from republican senator john mccain, who just ripped trump. he is a free-trade proponent and said this is a mistake and will cost us our strategic position in the pacific and china will benefit. bernie sanders of vermont, who ran for president as a democrat on the same issue, getting us out of tpp, was very complimentary of the president. bipartisanweird grievance that trumps move here wasn't so bad. line is not clear. what might they be anticipating and how are they reacting to the new trade ambassador? alex: the u.s. trade representative has not been confirmed by the senate. he is not in position. wille unclear on how trump
handle trade negotiations. he appointed several people ahead of the trade representative who he said would have major roles in trade, including his commerce secretary wilbur ross, jared kushner's son-in-law -- his son-in-law, and an economic advisor. it is unclear how important the trade representative will be in negotiations. caroline: you talked of the nafta deal. do you have an egg -- any sense of timing? as a courtesy, he might wait until after his meeting with the mexican president next tuesday, but i don't think we will have to wait long for some kind of notice. today, the press secretary, sean spicer, seemed to be unclear on the mechanism that has to be followed to exit nafta, but he was clear that they will, as he put it, trigger it when they
figure out how to do it. a busy monday. alex wayne, thank you very much. much of the u.s. tech industry supported the tpp, saying it would reduce barriers and foster innovation. what happens going forward? joining us to weigh in is isaac stone fish and david kirkpatrick. starting with you, looking at how this has been undone, it is a big blow but when that was probably anticipated. it will increase barriers and reduce innovation. it is a real message to companies and countries in the region that the united states is not going to be that involved, and for really innovative moves and trade deals, you'll have to look to china. david, do you feel innovation could be hit by this? david: what the tech companies
are concerned about is retaining access to the chinese market and if they don't have access. the tpp was actually a strategic partnership aimed at combating china's influence, which is not the way it has ever been understood are discussed by either trump or bernie sanders, so in a way, by canceling it, we are taking sort of a stone out of our pocket and we could have tossed that it china. it is a strategically foolish thing to do in one sense. i don't think anything really changes in the short term for the tech companies, because this pact was not enforced yet. stille time being, we are at the status quo. we are talking a lot. give -- withine: the relationship china has been frustrating for many tech giants who have been unable to access the market.
isaac: many in china saw the tpp as a way for america to encircle china. 12 countries, 11 besides the u.s., a lot of them were countries near the border of china and it was a way of showing to china, the united states would have a major presence in asia. the chinese don't want that. if we wanted to negotiate with the chinese on issues of market access, one of the things we would be able to have done in the past is say, we can slow down the tpp if you are more welcoming to our companies, especially tech companies. we just lost that are getting chip. -- bargaining chip. caroline: jack ma tried to push back concerns of a trade war, saying that would be a disaster. the risk is there. i was looking on the terminal, and texas instruments gets 45%
of its revenue from china. there are big stakes by tech companies that have access. david: all major tech companies theprofoundly global and vast majority of their revenue is outside the u.s. that is generally true for software companies, as well. it -- the thing they are most worried about when it comes to china is that we put in some big barriers against chinese stuff, and they retaliate against us and a company like apple, where china is their number one market, really has a lot to lose. bigger thanty is trump seems to appreciate. there isn't really a national origin for most tech products. they are the product of a complex global supply chain that involves things shipping from the u.s. to china, back to the u.s., and vice versa. to think of it in some bluff i terms, which unfortunately is the way it is generally discussed, is not going to advance the ball. withine: there is no deal
some of these countries that were part of the 12 country pact. where do we go in terms of southeast asia and the u.s.? isaac: we don't go anywhere. china takes up the momentum that we have given up, and they sign regional trade agreements, they , one road,d one belt they have more multilateral and bilateral relations with these countries and we stay behind protecting dozens or hundreds or thousands of steelworker jobs. caroline: it sounds like you are pretty been -- pretty negative. is there an upside? isaac: yes? trump did something he said he was going to do. he shows that he sometimes follows through on what he says. caroline: efficiency might be there, but david, is there any element that you can see going forward that would make this a more positive story? what needs to have -- happen for
you to have optimism? david: i don't think the tpp is that big of a deal for tech companies. without it, i do not think we are in a disaster scenario. i am still optimistic that in some ways, trumps rhetoric could an effective way of modulating some of the behavior of countries that we have had objections to, and china specifically. you could argue that even jesus 's speech and davos was positive. trump is sly like a fox. there may be positives that come topic jawboning on this and making companies more cautious when they take anti-american trade actions, which many of them do. china has done that. we have the relations and they will probably stay pretty good. -- thank isaac, steve
fourth-quarter adjusted earnings per share that beat analyst estimates. ando! says revenue acquisition cost beat estimates. that is more important -- more important than the numbers is the acquisition by verizon. despite disclosing the data breaches, the deal is still on but pushed back until the second quarter. david is still with us, along with cory johnson, who has been looking through the report and at last, they crawl their way to dismantling themselves. >> i think the estimates are important. i think they are overestimated, but especially when it comes to this company right here, we see a company trying to bail itself out of a situation for the better part of a decade. we saw declining revenues of about 4% on a year-over-year basis, better than in previous
quarters when there were double-digit declines. they will take what they can get. but can they find a business underneath all the garbage that is yahoo! that actually is a profitable business? halfway through 2014, the last time we saw revenue growth. david, you still have a yahoo! email address. giving -- give us a sense of -- david: i'm not ashamed of it. caroline: you weren't worried when the hack attacks happened, and not many people left the business, left yahoo!, even when the hack attacks were made public. david: those of us who have yahoo! emails recognizer they have instituted security measures in recent years, probably because this was going on in the background even before we knew about it. two methodsequired of identification. they were constantly forcing me to get a text on my phone in order to continue using yahoo!
and when i shift from one platform to another, they make me do that. it is reassuring. it seems to me like they have a good handle on security, from my standpoint. i don't experience that with google. their security may be good, too, but i actually think overall, yahoo! is sort of mildly turning around, mildly. just before it is going into verizon. continue to be somebody who doesn't think that marissa mayer made a disaster of it. i think it was an incredibly difficult situation to come into, and they built some new mobile businesses, and in contio doesn't think that marissa fact, their revenue has been looking better than it was. that is impressive to some degree. they have this weird one page, they didn't do the traditional conference call with analysts.
they aren't releasing financials for many categories that are important. but they tell us things in a one-page press release, saying gap yahoo! quarter for revenue for their mail business was up 30%. gap revenue for a thing that you don't release gap revenue numbers for isn't gap revenue. 31%, if that's true, would be impressive for yahoo! mail. caroline: i do get two-way security for my google account, as well. david, it is interesting we are seeing the fcc weighing in and wanting to look at the yahoo! breaches. towe did see someone having pay up or be fine for what happened, who would it be? verizon or what's left of yahoo! now? david: verizon would ultimately pay a fine if there was one.
one cannot say that it was, i can't feel anything but sadness and some fear, at the scale of the attacks yahoo! clearly suffered. some of them, several years ago. we are hearing about them recently. these were gargantuan, disastrous, embarrassing attacks that should not have happened. will they have a consequence on the deal? i doubt it. will they end up being verizon's problem later? probably. could it result in verizon negotiating a lower price? probably. we don't know. that wouldn't surprise me. back the they pushed closing date, does that mean there could be negotiations? we know they are trying to figure up more about the deal. the investigation might be a part of that. companies have to disclose this information because it can damage the value of what people are buying and what they think
they are investing in. that happened with verizon. they aren't any stronger because of the attacks, or better than what verizon thought it was buying. fabulous analysis, thank you. digging into the numbers and more intrigue as the deal goes on. cory johnson and david tell patrick, we will check back in with you both throw pierre -- throughout the hour. a former google executive was hired as a pitchman to former audiences. he wants to return to the u.s.. we spoke to him back in august. don't have any near-term i peel plans. the company doesn't presently need an injection of capital, so we are going to stay private for a while, stay focused, continue
♪ on bloomberg technology, ebay falling over a percent on the session over concerns that its auto business will see more competition. the new york post reported that amazon signed their party contracts are some of the world biggest auto parts suppliers to expand its amazon vehicles unit. this could turn into a big deal for ebay. accounted products for 11% of their merchandise volume in 2013. microsoft is facing its first hurdle in a legal battle with the u.s. government over the practice of secretly accessing government data stored in a
cloud, including the males. the company is suing, defending the right to disclose when the government requests data on users. the issue is whether microsoft is allowed to defend its customers' country stood to snow -- constitutional rights. the issue is a huge one. apple, google, and amazon talked about this. a republican has been named chairman of the federal communications commission. he took to twitter to share the news, writing, "i was in armed -- informed by @potus that i will be the chairman of the fcc. tom wheeler set down friday as the new administration -- stepped down friday as the new administration took office. opposes net neutrality.
interests,takeover according to people with knowledge. the sale could value the network at $1.3 billion. this tax the are considering final bids. had a 70% jump in december, when it was reported the company was loring a sale. -- exploring a sale. acquired a 33% stake in tidal. have exclusive content. shares rose 2% -- 2.8% on monday. the sprint ceo will join the tidal board and jay-z will continue to run the business. a disturbance in the force at disney. in one word,cribed
excitement after the announcement of the next installment in the star wars saga. episode eight will be titled it will hiti." u.s. theaters on december 17. coming up, more on president trump's meetings with business leaders. how tech companies are aligning themselves with the administration. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app and sirius xm in the united states. ♪
islamic state. secretaries sean spicer said that president trump has been clear that he will work with any country committed to defeating terrorism. icer: if we have a shared national interest, sure, we will take it. alisa: russia said today that they would join in admission with a u.s. led mission here you can't officials plan to open trade negotiations with countries outside the eu, with the fines from the block, that the move would be illegal. thatr eu politicians say britain cannot legally begin negotiations outside europe until they leave the block. tha -- pena nieto says
promises that mexico will pursue a united front in its talks with the u.s. global news, 24 hours a day, powered by more than 2400 journalists in more than 120 countries. this is bloomberg. 5:30 monday inr new york, 9:30, tuesday, in melbourne. i enjoyed by paul with a look at -- i am joined by paul, with a look at the markets. paul: we begin with new zealand. k.oking a bit weea we expect a positive start here in australia. when we get under way, it will be worth keeping an eye on the oil search -- surge. the million for revenue for
quarter. producer copper reaffirming guidance for the quarter. citigroup is up with the forecast, strict -- saying that the commodity is up for a shot decline. the big one today, samsung electronics' preliminary results, the best in three years, despite all the dramas surrounding the note 7. more from bloomberg technology next fearing -- next. ♪ caroline: this is bloomberg technology. i and caroline hyde. back to the top story. president trump agenda --
trump's agenda. he met with official showing that job creation is a top priority. to align are eager with the administration. foxconn and ibm. factorymay build a u.s. . it could create tens of thousands of jobs. then, ibm. hi clenched to higher 2500 -- re 2500. on set is cory johnson. let's go to ibm first. being accused of hypocrisy here. >> alternate facts are not pressd to the white house
meeting, apparently. trump talking about adding jobs, by the same time, the company has been cutting jobs, and cutting them aggressively. if you look at the number of itloyees for the company, looks really good with the company saying they would be hiring more in the u.s. nonetheless, what we see ibm doing is cutting. the number of employees have been declining, at the same time, the revenue has been declining. in the bloomberg terminal, use the a list of all the job cuts. scroll through there. we can scroll through their, -- there, and the list goes on and
on. the stockappened to prices, you can see, coming down over time. that is one other way to look and visualize the cuts. and, lowering the number of shares out there. caroline: let's take it out to foxconn. you have put out a great piece on bloomberg gadfly. you are not buying all the pr around what appears to be a deal coming from foxconn. >> what of the big things that we need to understand is foxconn chairman on the weekend pointed out that it is a wish, not a promise. that is a really important caveat from the billionaire chairman. he has made governments around the world believe that they may, in the future, invest in their countries.
often it is the government and the officials in the government getting ahead of themselves. reallyar has been patient and aggressive going to countries around the world, saying, you have to offer me an incentive. he was clear saying he would be looking at state governments in the u.s., looking for the best deal he could get. that means tax incentives, cheap land, alleges the, water. all of those that cost money. if you can get the deal, he will consider. david, way in here and give us your view on all the pr, and whether the ceos are learning a new way to address job hirings and firings. >> we are living in a world where appearances seem to mean more now than ever.
in terms of foxconn building in the u.s., it would be politically advantageous for apple is a good point to a considerable amount of their own sourcing coming from the u.s. from a very prominent plants. these are options, basically, where companies are bidding -- asking people to bid for their business unit from foxconn's point of view, it only helps them to have these reports out there. a plant like this is so automated today, increasingly, companies don't care where it is. in the past, it had to be in china because it was a labor intensive, but increasingly, it will not be labor-intensive. is a matter ofly where they get the incentives. it is not about labor costs anymore because automation is what determines the success of these plants. cory: one of the reason these
things were made in china with because the labor was so cheap. it did not make sense for it to go to a machine. worldwide, the decline of the number of manufacturing jobs is something that even arts learned of facts cannot rescue us from, but is an important issue. this story cannot be divorced from the politics. caroline: they are not fighting that trade or various from other countries. they are fighting robots. tim, dig into the facts of this foxconn manufacturing for us. of rumors a russell that apple is getting into tvs. tim: yes. at the end of the day, they are talking about a massive factory that would create huge pieces of
glass. then, they get divided up into iphone screen, or television screens, or whatever. we are looking at 800 million units per year units of screens. for television screens, the number of units is less. we're talking about labor costs in china and how they are going up, but the other part is the supply chain. china, you can walk across the road and there is someone with a component. you do not have that supply chain in the u.s.. if we create these in the u.s., who will assemble it? will you ship it back to china? that is not easy for screens. they are fragile. the idea of creating a whole lot of glass panels here in the u.s.
is only one part of the puzzle. you have to think about the rest of the puzzle, and i think the out. does not add caroline: david, you anticipate leading tocentives more hiring? i could talk briefly about the screen issue, i think it is possible that if the products are evolving, the screen is becoming a higher percentage of the actual device. we heard that a next generation iphone could just be a piece of glass type of thing. it could be because of the nature of the product evolution, it would be possible to streamline the production. these would be more like a semi conductor on a piece of glass. i would not rule it out that they make it work doing it here. again, this would be great for apple in the era of trump, if
they can point to one of their suppliers doing such a big project here. caroline: thank you for your time. david kirkpatrick is staying with us for the hour. and, cory johnson is staying with me because i want to get a take on the next story. a computer program forced united airlines to ground all flights. they said it was technology that pilots in messages to the cockpit. back in october, thousands of united passengers were delayed worldwide after a completely good -- a computer glitch. just last week, air canada experienced glitches. watching have been this story. is this a hack attack? just a glitch and malfunction?
cory: we don't know what happened yet. this is really important for united. important for the airline industry. but, important for every company in the world. if united can go down, what is supposed to be one of the most technologically advanced companies in the world, if they can go down for two hours, it can happen to us. it is a worry for industry. we will find out. senator richard blumenthal out of connecticut and senator markey from massachusetts say they want answers. what happened and why it happens. they say they are arguing from the behalf of the consumer. all business leaders want to know, can this happen to my company. caroline: not just cyber security, but complexity of these systems as well. cory johnson, editor at large.
handling giant, more and more drivers are relying on it as their main source of income. drivers take drastic measures to stay afloat. eric, this is a great story, and you followed individual drivers. they are sleeping in their cars. economist compare this to a type of immigration. a driver living in sacramento, driving into sentences oh, sleeping in his car while he is in san francisco to save money. drastic steps. i interestingly understand that you want upon a time drove a taxi. david: this was 40 years ago. this is the way drivers have been treated.
congrats to eric on a great story. i think that employee relations could be uber's achilles heel. caroline: employee relations. i can understand. a taxi company, the drivers, it is there responsibility. lyft has been taking a very different tactic, trying to help drivers a little more. eric: after 14 hours, you have to get off the platform. r, they havee declared it the year of the driver. they are building products to make driver's lifes better. caroline: at the end of the day, this is an efficiency issue, but also, a fact of life, very sadly.
a driver you spoke to once to move closer to the city. it is not his choice. eric: right. that argument for uber is this is an easy way to get money. even for full-time drivers, it is flexible. i think the drivers with a, we have been doing this years, and the amount of money we are making is going down and down. we tried to make a career out of it, you were not there for us anymore. the two sides see it different ways. caroline: it is a great story, getting a lot of traction on twitter. you said that perhaps 2017 is the year for responsibility. you think they have to discuss, or is it really there responsibility? other criticsand of business, populous critics of inequality, and particularly
companies like uber have to really think about their public image more than they did before. in the case of uber, such a big employer, despite what they want to call it, they have to improve this. a long way to go. caroline: a new marketing head in place. really at peace. i urge you to take a look at it. thank you so much for joining us throughout the hour. pharmacy, and online looking to shake up the pharmacy business and how drugs are packaged. this is bloomberg.
fail to take their prescriptions correctly. we visited the pill pack facility in somerville massachusetts. >> pill pack is taken -- taking on the neighborhood pharmacy. the online pharmacy has a different approach. orinstead of having seven eight different bottles, you get one of these boxes. >> that box is delivered to customers once a week, divided in packages as to how they are to be taken. the ceo is focused on the over 5 million americans that take a prescription per day. he launched pill pack in 2014. now with over $120 million in funding.
has a new headquarters in somerville, massachusetts and 50,000y expanded to a square foot facility in new hampshire. here, robots help to sort pills. the majority of the employees sales.shipping, how hard would it be for another player to replicate the model? >> the automation, having been built from scratch -- if they decided they wanted to build an equivalent, they could do it, but it would take a long time. work cut outtheir for them if they want to tackle this problem and push cvs and walking off the pedestal -- and
walgreens off the pedestal. 90% is going to the retail corner pharmacy. >> just like those competitors, pill pack labels it sells an online retail pharmacy, not just a mail order service. >> this is a business definition that there is a month pharmacies. we do not fit in any of the bucketsg bucket well -- well. >> most prescriptions in the with by cvs,t and others. pack guess is that pill wants to get the dispensing fees
at a higher rate than the traditional mail order rate out there. >> more than one third of pill pack sales are at risk. >> certainly the negotiation was around rate. the consumers ultimately have the ability to choose what pharmacy they want to use. that is why we fought the battle. >> another battle is to help drugs as they are told. it costs the u.s. billions of dollars per year. not think the secret of pill pack is delivery. >> pill pack's goal is to help making -- help make taking pills easy. that was doni
bloomfield. that does it for this edition of bloomberg technology. for earnings continue tuesday. report and verizon all results. we will bring you the highlights and all the analysis you need. check it out, bloomberg tech tv 5:00 in new york, 2:00 p.m. in sanford's go. that is all for now. this is bloomberg.
♪ announcer: from our studios in new york city, this is "charlie rose." donald john trump was sworn in as the 45th president states to date. an estimated 800,000 people gathered at the white house as he took the oath, led by john roberts. trump: i do solemnly swear that i will faithfully execute the office of president of the united