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tv   Bloomberg West  Bloomberg  December 20, 2013 11:00pm-12:01am EST

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>> live from pier 3 in san francisco, welcome to the late edition of "bloomberg west" where we cover all the global technology and media companies that are reshaping our world. i'm emily chang. our focus is on innovation, technology, and the future of business. let's get straight to the rundown. president obama said there may be big changes ahead to the government surveillance program. what it could mean for online privacy. square ceo is returning 10% of his shares back to the company. we will talk about the unusual move and when it means.
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it looks like a&e has a disaster on its hands. could it mean the end of the show, "duck dynasty?" first to the lead. surveillance has been a hot topic. president obama not only met with the most prominent tech executives, released a report on government surveillance. the president is hinting he may be willing to follow through on some of the restrictions. take a listen to what he had to say in his final news conference of the year. >> i have confidence in the fact that nsa is not engaging in domestic surveillance or snooping around. i recognize as technology changes, people can start running algorithms and math out the information.
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>> president obama has not made a final decision yet. phil mattingly was at a press conference and he joins us with more. >> there is no doubt right now that it is a big change from five or six months ago. they are changing and they will be laid out. not just because the administration feels like the programs have gotten out of hand or the nsa is operating off the path they do not like. as he said previously, it is a confidence issue. the american people have lost trust. listen to what else he had to say. >> in light of the disclosures that have taken place, it is clear that whatever benefits the configuration of this program may have had it may be outweighed by the concerns of the people have on the potential abuse.
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there may be another way of skinning the cat. >> basically what the administration is saying today, finding the balance by january is the key. major recommendations were laid out by the task force delivered on friday and released this week. how many they follow through. there were 46. how many that they follow through will be the key question. >> a federal judge ruled earlier this week that that nsa unconstitutional. did the president talk about that ruling and if it's informing some of the way he thinks about the issues? >> he was asked and said they were aware and taking a look at the secret fisa court, they said it is working. the key thing is one of the recommendations by the panel is a third party mechanism as
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opposed to government storing, a third party would do it. they do not know if it's possible. it's something to keep an eye on. one of the biggest changes. >> softbank is exploring a deal that would allow sprint to buy the majority of deutsche telekom t-mobile u.s. the ceo has approached six banks to discuss financing according to people familiar. he is turning to banks like goldman sachs. many of the institutions that helped softbank purchase sprint. we have spoken to the ceo of t-mobile many times. >> i tweeted him today. deutsche telekom has not held any meetings.
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they are hoping to sell the t-mobile stake. people who know who it is. alex sherman has done fantastic report. tell us what you have learned. >> we know who the banks are. the wall street journal reported 10 days ago that they had heard some vague rumors that softbank was interested in restarting the talks which have been going on for a year or two years. >> they could've been talks to see what the regulars were going to do. >> the more information is the banks put the first call. he answered them and in fact, he has been trying to garner up support from all of the banks that he used to buy sprint to see if they will again finance the deal, perhaps $20 billion. >> a lot of money. $20 billion. >> not a lot of money. the first time when at&t tried
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to buy it was $39 billion. this time around t-mobile -- have done much better through the value. it is going up again. the question to your point is not a financing one. the financing will be there if softbank and sprint decide to go this route. it is still the regulation question. will regulators allow this to happen? it would go from four to three. >> they have said you cannot take it to three. >> have enough changed in the year or year-and-a-half and a half where regulators have thought about this and instead of going from at&t and verizon and sprint. you have two strong players and one weak player. in this scenario, you get three strong players. >> maybe. >> potentially. >> t-mobile has gotten a lot better.
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there is a really good spectrum, it is not the built out to be one network. you'd use the sprint spectrum. the t-mobile is very different. >> it is down to the classic argument. if you have a weak number three and number four, sprint is stronger. both of those businesses at three and four are probably financial challenged. put them together and maybe have a better chance of shaping up the market. >> a better chance is that $20 billion in debt. a fascinating story. a lot of twists and turns. >> and nothing imminent. i think it will go on. >> i know you will keep working. >> one to watch. thank you. jack dorsey has returned 10% of his shares back to square. will we see more tech founders
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following suit? that is next. ♪
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>> i am emily chang. square ceo jack dorsey is returning 10% of his shares back to the company which means employees will get their hands on a greater piece of the pie. why would dorsey be doing this? david, why is he doing this? >> the thing to say is because he does not care about money as much as other people. he is a high-minded person. i think what it is really about is jack is better at a long-term thinking than a lot of his peers out there. he is basically thinking a
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smaller piece of a bigger pot is probably -- pie is probably more in the long run. he is not just a money oriented guy. he wants to show how much he cares about the employees. he is thinking out-of-the-box kind of guy. he is not your typical conventional wisdom silicon valley type. >> he also, to be fair, made a lot of money on the twitter ipo. you never saw mark zuckerberg to do something like this. he has maintained majority control in the company. what is different? >> mark is more obsessed with control than jack is. that is partly the cause of the influence of sean parker of facebook who had influence taken away. when he came in with the zuckerberg he convinced him to not let them take this away, keep control.
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that is how he restructured the company. jack is more secure and more folks are doing cool things. he is able to basically do a lot without having that control. he will still have 30% of the company. jack wants to make a statement. the statement is about other things. not how many 0's are behind the dollar sign. he probably has more than $2 billion to his name anyway. it is not like $100 million is going to make that much difference. the contradiction, zuckerberg has done things like this even this week. a lot of publicity for selling a lot of stock. he gave a billion dollars of facebook stock to charity. he has given a lot of other money to charity. it is not that fundamentally different. jack is giving back to his company to reinvest.
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reinvesting in the community to give a $1 billion to silicon valley foundation. >> if you read the book, jack comes off as being worried about losing control of twitter. it was not a very flattering portrait of him. do you think he's trying to change that? >> i think he feels it was an inaccurate portrayal. i am quite certain he feels that. i do not think that is what motivates him with a move like this today. i do think it was an inaccurate portrayal. he is a more creative thinker than most people and maybe give him credit for. he never made any bones about thinking he did a bad job as ceo when he was at twitter like the book said. the book acts like he believed he was better than the other cofounders. that is not the feeling i have ever gotten from talking to him. >> i have spoken to jack at
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length about his philanthropy as well. does this give you any cause for concern if square's have trouble recruiting? >> no, i think it's quite the opposite. square is doing so well i want to reinvest and show my commitment to the company and the employees. it's a very powerful move. it would not surprise me if others emulate it. on twitter, there is talk about more people should do this. this kind of high-profile act is probably going to generate some thinking on the part of his peers who run companies. sometimes, it does make sense to give back in order to get more in the long run. whether the company success or more money. >> it certainly means more equity. thank you for joining us. in other news, blackberry has
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listed a $4 billion loss in the third quarter with revenues falling 66% to $1.2 billion. there may be a silver lining for the phone maker. they announced a five-year partnership with foxconn known for making apple gadgets. that will make the smartphones in a move that could cut production costs for blackberry. cory johnson has more from new york. >> it continues to amaze what blackberry does. even when things are going to be bad, cutting estimates, the numbers get worse and worse. the wind is completely out of the sails. you can see the stock chart. over the last five years, a dramatic fall of course. everyone knows that. i think it was interesting, i pulled out the numbers from every one of the last five third quarters. you can really see how dramatic
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this fall has been and how quickly things can change in technology. the company decided to go low end with the phones and that brought of the sales to five point $5 billion. that same quarter, -- $5.5 billion. it is simply an amazing thing. >> who still buys blackberry? is growth happening anywhere? emerging markets? places not so obvious to us? >> our colleague bought one. they sold one. a lot of devices. they sold 5.9 million devices. they just announced. what is interesting about that is not -- those were the blackberry 7's.
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not the latest, greatest that they thought would save the company. they are selling the old stuff the new stuff has missed the boat. >> a new ceo, we should give him time to see he could figure this out, to turn the company around. what about selling the business? is that still on the table? >> they said it's not and it will try to fix things. they said they do not know if the changes they made specifically a big move to go to foxconn is going to improve their ability to make any profit whatsoever. they took a big write-off. i want to read exactly what they said. "moving on to the asset impairments, definitely the bulk of the impairment related to intangible assets and not our own patents really some believe in the past investments we've made in licensing."
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clearly, they are trying to get rid of the old deals they use to consider very valuable and so valuable, they put them on the balance sheet. they are paying money to kill the deals to save the company. a smaller company going forward. it took a really big hit. >> cory johnson. our editor at large. "duck dynasty" is a big moneymaker for a&e, recent comments by one of the stars put the future in jeopardy. how much could losing the show hurt the network? that is next. ♪
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>> this a "bloomberg west."
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foursquare raised $35 million funding round. raising the valuation to six hundred million dollars. they raised the money from a capital group. is foursquare worth that much? marc prioleau joins us. we also have sarah frier. marc, did the funding surprise you? that they were able to raise it this much and they had told us it had plateaued? >> it is a good sign to them. in the middle of the year, a lot of doubt. one person forecasted that would be out of business by the end of 2013 with less than 50 million dollars valuation. that has not come true. they are in a better place. they feel very positive based on a lot of new products and they
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are coming out with. >> they may feel positive but do you feel positive about foursquare? >> i've been optimistic. the thing i like about them is since they were launched in 2008, they have haiyan eared -- pioneered new things and they continue. where they are going now is trying to leverage some the data they have into a good service for the people. if they can do that, there's a chance of growth. their issue is active in user growth. along with the revenue. >> dennis crowley, the ceo, has a vision of what he wants for the new reborn foursquare. sarah, you point out he is been trying to solve the same problem for 10 years. they are problems. do they want to solve them? are they on the right track?
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>> what dennis is saying is we proven it is technologically possible to do what we have said we are trying to do for years. they have done that. the question is will users go along with the ride and if they can excite people about foursquare again. they are trying very hard to show the data can bring you closer to places you may not have discovered. people's habits change. >> let's talk about the excitement factor. what are the chances foursquare can re-accelerate growth? they were hot in 2009. we are in 2013 and snapchat and instagram and more things taking users' attention. marc, what do you think? >> they got off to a fast start and -- that is going to be their
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challenge. it is not a foregone conclusion. what they are trying to do now is that they have developed a lot of data. it is at a granular level. not just go to the restaurant and get a recommendation of what's on the menu. they are moving to the idea of anticipatory recommendations. you walk in and sit down and try this. if that is done well, because it's a push-based, starting to get around the problem of people who are not pulling it out and turning it on. they are working on api's. places where it can be used. it is going to be a hard problem for them to get engaged users. that is why there is some doubt if they can become a really interesting acquisition target for someone. >> marc prioleau and sarah
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frier. thank you. we will be back more with the show after this. ♪
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>> you are watching "bloomberg west" where we focus on technology and the future of business. i am emily chang with the top headlines. target said there have been very few reports of a fraud. target also said there is no indication any debit card numbers were swiped. one shoppers already sued target. oracle is switching deeper into cloud computing by buying a software company. they are paying 1.5 billion dollars for the maker of cloud marketing programs. oracle has been make acquisitions to boost growth and hold of rivals like salesforce.
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a new york city council has voted to add electronic cigarettes to its smoking ban. the law takes effect in four months. they said it may cause people to start smoking. opponents said it helps people to quit. new jersey and utah have banned the e-cigarettes in public places. to the latest way technology is changing health care. with the affordable health care act causing one of the biggest shakeups, startups are trying to further disrupt with new health-care apps. cory johnson is back with more. >> the health-care apps. it sounds different. it is going mobile. doctor on demand is a new app that is trying to put an end to waiting rooms. it was launched last week. it helps patients via smartphone. $40 a call. you are talking to a doctor.
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the ceo joins me now. even though i know i saw you in new york, adam, this is interesting. describe how it works. >> we support any ios device. iphone and ipad, as well as android. you sign up. registration takes a couple of minutes. you can pay with your credit card or flex spending. >> access to doctors, for all of the difficulty about the rollout of healthcare.gov, access to insurance and doctors, why take this approach? >> it is exactly that. we are solving the access problem. once you sign up, we connect you via video chat with a real doctor. the point is for nonemergency medical issues. a cough or cold or rash.
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everybody is going to urgent care or er or backing up the offices for things that could be dealt with over video. sometimes just as well. >> when i first had kids, i was doing more phone calls to the doctors and nurses. what do i do about this thing? is that the kind of thing you are targeting or more of minor issues that are disconcerting for people? >> we have gotten lots of traction with moms especially moms with young kids and new parents. all good parents think if there's something wrong, we are going to the er to make sure. many of the cases, they do not need to end up in the er. look at this bump. is it serious, do we need to go
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in? it is nice to have a life and m.d. -- licensed m.d. to show you that is ok or say go in. >> we talked about this when i saw to you. for people that are embarrassed to talk about, a serious situation like an std or something else and they do not know what it is. it is interesting -- in some ways they are offering a second thing for people who have medical insurance. >> that is right. lots of people who use our service already have insurance. this is a convenience. you mentioned skin problems or stds or what have you. you can pause the video and take a picture. the cameras are great. you do send the picture in real time. you could blow it up and get a good look. if it is appropriate, call in a prescription so you can get treatment. >> how does the new health-care law change or make more possible
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your business or no effect whatsoever? >> we think it will be a positive effect. there are 30 million or so coming on to the health insurance rolls. many of the accounts will be high deductible accounts. health care saving, flex spending. those types, the first $1500 is coming out of you. the patient has to be more cost conscious. should i go to urgent care or use doctor on demand? >> adam jackson. thank you. >> now to the new hollywood. ultra hd may be the new frontier. netflix said that the new season of "house of cards" will be available in the 4k format.
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how else is this technology being used? our reporter joins us. andy, is it just tv studios jumping or happening in movies, too? >> it is happening in movies. sony has been a big proponent of 4k or ultra-hd. they are having their studio, the film studio, make all future films in the format. it is ultra high definition resolution that is twice the resolution we have now. as they are moving in that direction and creating were content for these new devices. >> is it going to be a standard in tv and film? >> it is moving in that direction. the more the content has become available, the more the devices are adopted in homes. the more it will speed up. right now, the adoption has not been very fast. it is expensive tv sets.
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you need a big storage device to play the films. that would be up to 60 gigabytes for a single film. it can be -- would've not been a huge amount of adoption. it is early in the process. >> we have talked about 3-d and it has not come anywhere close to that. is this going to be the same thing? are people going to buy or should they buy four k -- 4k tv sets? it does not seem to have happened yet. >> making the comparison to 3-d is tough. 3-d adoption in the home has not taken off. though the adoption in films have been strong. they are hoping it will be different for 4k, more and more
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of the films available and they will be distributed in the home and you will not need glasses to watch these. a more natural environment than the home. the thing with ultra hd is it's going to need more of a boost. more content and the price is when it to -- is going to have to come down. >> we will be watching. thank you. we will be right back. ♪
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>> welcome back. i am emily chang. what is the leading place for tech and innovation? you would think it was silicon valley. it is actually washington state. to come with a ranking, we came up with the number of workers. when you think of tech in washington, microsoft and amazon
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come to mind. everybody from facebook to google has an office in the seattle area. on the early edition, i spoke to matt mcilwain. known for its early investment in amazon. he talked about why washington is the new face of innovation. >> we have been finding for the past couple of decades that washington state keeps getting more and more innovative. amazon, microsoft, 2 of the highest market cap companies and we believe we are becoming the cloud capital. what did those companies are doing and others. >> how many can be just attributed to amazon and microsoft? >> not just the two but a whole ecosystem, the intersection of innovation. mobile going back to t-mobile which is based up here. the research ecosystem which has
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the university of washington at microsoft research. the artificial intelligence research center. the cancer research area. a lot going on for a long time in washington state. >> what do they get that they cannot get here in silicon valley? >> they can get access to the people who have for multiple generations now build innovation right here. you take a look at a microsoft which has a real network and now we back multiple companies that are the next generation of folks. it gives you access to people and insight and innovations that you cannot find anywhere else in the world. silicon valley has a lot of great things going on. a far bigger place today. where the future is going, the intersections are right here in seattle. >> let's talk about amazon. what do you think of drones and
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octocopters? is this really a short-term reality? >> oh, i would not sell them short. you can see drones. it may be three years or five years. the big point is microsoft first and now amazon has become the anchor tenants of innovation up here in the pacific northwest. amazon really deserves the crown as an innovation factory. whether it is drones or cloud computing or mayday button on the kindle device, they keep at a torrid pace delivering across a broad section of what is going on in the technology community. >> do you think package delivering drones as early as three years? >> it is possible. i would not underestimate amazon.
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>> that was matt mcilwain. it may be one of the most popular shows on cable tv, but "duck dynasty's" future is in jeopardy after one of the star's controversial comments. that is next. ♪
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>> this is "bloomberg west." with as many as 12 million viewers, "duck dynasty" is the most watched cable reality show ever. it follows the robertson family. future episodes are in jeopardy after phil robertson was suspended after remarks about gays. the network behind the show has not responded to "bloomberg west." the family said we cannot imagine the show going for it
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without our patriarch. we are in discussion with a&e and what it means for the future. could it be the end for duck dynasty? jeffrey hayzlett joins us. he is also a strategy consultant for a number of fortune 500 companies. jeff, the comments are not worth repeating. what do you make about the decision to suspend him? >> is it ratings week? they are entitled to do what ever they want. phil robertson is permitted to say what ever he wants to say. whenever you speak out and in the way in which he did, there could be consequences just like it was for the dixie chicks and other executives and other companies that might tweet things and that they should not. he has a fundamental right to believe. a&e needs to remember that they ended each show with a prayer. what were they expecting?
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i think they will continue to go forward. >> you think they should let him come back and do the show as is? >> everybody is entitled to their beliefs. the key if he is commercially viable. he is entitled to say whatever he wants. does it have the impact on his brand or viability? without question, it does. they do not believe in those kind of things, they should not tell met him come in the show with prayers or the other things like the messages to the show. there's a great audience for that as well and does not mean you have to show everything. >> let's talk about another person exercising their right to free speech. this is happening right now in twitter. the pr director for irc interactive.
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she tweeted apparently, we don't know for sure it was her because she is on the airplane right now, she could've been hacked. this appeared. "going to africa, hope i do not get aids. just kidding. i'm white." >> imagine what it is going to be like when she steps off the plane and her phone is going off and the tens of thousands of people who will respond. these are stupid moves. you have to remember as a professional, i think about this and you think about this. i think about the things i'm going to say before i say them and how they could be misconstrued. i would imagine somebody made a very stupid, off collar everything. you should know better. you cannot stop stupid. sometimes we make mistakes. i will give her the benefit of the doubt. the first thing she will do is apologize and be embarrassed. >> her previous tweet indicated she has a more extreme sense of
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humor. if she thinks it is funny. somebody said this is an outrageous, offensive remark. unfortunately, the employee in question is unreachable on international flights. we are taking this -- appropriate action. you did not think phil robertson should be fired. should justine? >> she will have to face disciplinary action. especially if you are on pr side. this also gets back to the notion of what is our private side and public side? we are finding there is no difference. when employers are looking at facebook and twitter and instagram and seeing if they're partying over the weekend and publishing those things, all of those tie into the values of the company. there is no blurred line anymore. >> yes or no, should she be
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fired? >> she at least deserves to be suspended, probably not fired yet. >> not fired? why not? >> i am not an hr expert. i need to find out what she is and is not allowed to do. if she was doing it on company time, it may be different. i am not sure which one she is doing. they have a process for this. let them figure it out. >> we will be watching to see what happens when she gets off the airplane. thank you. awesomenesstv was acquired by dreamworks earlier this year. the largest acquisition of a youtube player. the multichannel network recently hit 85,000 partner channels and has more than 2.6 billion views. jon erlichman went to meet the man who is killing teen tv.
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>> i am in santa monica, california. at awesomenesstv. if you're not heard of it, you are probably not a teenager. this company is giving traditional teenage television a run for his -- for its money. let's meet the man behind it. >> i like to say it is the online destination for teenagers. the main channel has a million subscribers which is a milestone. kids basically like not only to watch awesome content but to make their own. they can start their own amazing channel. the agents of change. my son, justin, if it were not for them, none of this would've happened. i would not have tuned in to the behavior of teenagers.
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we look at our schedule. we schedule monday through sunday. this is our soundstage. this is where we shoot most of our shows. a lot the time our talk show, it comes in here like our version of "the view." >> dreamworks ends up acquiring. tell us about that. >> it is very exciting. it was a quick courtship. it has been a great relationship. he is passionate. >> let us know by liking this video. >> we have a phone reflecting off a mirror. do you have that a bloomberg?
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>> that was awesomenesstv ceo brian robbins. time for the bwest byte where we focus on one number that tells a whole lot. our friday byte. the best, best kind. >> you were going to say friday night. the byte is 6. the number of states that california should be divided into. he wants to take california and carve it up to increase the representation in washington, especially in the senate and is introducing a measure on the ballot to get this done. he has the idea of a far north, a south, a central, a west. that is a tim draper quality idea. >> leave it to tim draper to come up with this. we will continue to cover that. thank you all for watching. have a wonderful weekend.
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we will see you on monday. ♪
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>> a baby step in the right direction. >> this week on "political capital," rob portman. bloomberg news talk nsa and president obama. rich miller and margaret carlson lanhee chen -- debate pall ryan's ultimatum. >> we begin the program with senator rob portman of ohio. senator, thank you for being with us. you were one of the republicans who voted for the small compromise on the budget, although you said it wasn't nearly sufficient. let me ask you this to start. was this a one-off marriage of convenience? or is this the start of maybe

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