tv Bloomberg West Bloomberg October 27, 2014 6:00pm-7:01pm EDT
>> live from pier three in san francisco, welcome to bloomberg west, where recover innovation, technology and the future of business. first a check of your top headlines. the s&p 500 ended the trading day slightly lower while the nasdaq and dow jones rose less than 1%. the drop in the s&p comes as evenmic data indicates an economic growth here in the united states. it also comes after 4.1% surge in the s&p last week, his best performance since january 2013. royal shell is asking the obama administration for five more
years to explore for oil off the alaskan coast. the company says setbacks and legal delays may push the start of drilling passed the 2017 expiration. lands were set back in late 2012 by mishaps involving drilling rigs and spill containment systems. the company has been sued by environmental groups seeking to block expiration. microsoft is cutting the price of its xbox one by $60 ahead of the holiday season, moved to it attempt to win back customers switching to the sony playstation four. it will sell for 340 nine dollars from november 2 through january 3. buber rival lift is losing more executives. it has confirmed the director products is leaving less than a year after first joining the company. it follows a string of executive exits including the vice president of operations and the vice president of engineering. comment on theto
departures. ceo dick costolo struggles to add new members to twitter. uprd-quarter revenue was 114% year-over-year, but a third .uarter net loss the number of active users on the site grew, up 23% year over year, but the growth not coming quickly enough for some. shares were down as much as 10% in after-hours trading. almost a year since twitter went public, it was the first glimpse at the company's performance since costello shook up his team to speed up the launch of new products. johnson andre cory paul kedrosky. paul, i will start with you. obviously there continues to be this fascination with what is happening with user growth. is that fair, and is that the
number we should be focusing on? >> i think it is fair. i think it is frustrating twitter. call, you from the asked the question about daily growthusers and timeline and all of a sudden there is a sense of, i heard this question too many times. the company is clearly frustrated with the investor fixation with those numbers and wants to tell a different story, but it's the only one that customers understand. stage, theit this company should be growing. we've criticize a lot of companies in silicon valley like the snapchat model, which was once the google model. let's get big and figure out how to make money later. 284 million users is a lot.
at the growth rate is lower than it has been. , the growth rate was coming down and coming down in the december quarter, but then it picked up. you want to see that rebound continue. but it did not. it's a disappointment for this business. that is quarter over quarter base. i don't think that is the right number. , andig is the audience hasn't gotten any larger? they didn't really grow that much, and it is a concern. >> paul, how big a concern is it? events likee big , or an amazing
week by ellen degeneres. >> i think the company would discourage it, thinking that way about the company. it deserves to be thought of in a broader term than that. the numbers we are seeing suggest that even if you do think of it in those terms, they're not seeing huge bumps from any major event like football or the brazilian elections or anything else. that, to belook for deducted by the numbers growing more or less than it should have. the fundamental problem remains, this has been the story with twitter for three years now. the experience when you join the service as a new user, it's not really obvious what you're supposed to do. as a non-logged in user, there's really no experience for you at all. aboutt does twitter do
the mom problem? my mom uses facebook but she still doesn't understand twitter. >> your mom follows me on facebook. s -- theabout mom' facebook issue. facebook loves the mom's, facebook business has never been better. everyone should love your mom. twitter needs a bigger audience. it needs the moms, dads, kids, cousins, and goldfish. there are some numbers that did not fit here. ,he revenue per timeline view the monetization of the timeline views, that pic that, but those , it's aare so small
very low number. , but theer than it was problem there was the timeline view growth, the number of timelines that people are looking at was also coming in quite small, 4.3% sequentially. users, slowth in growth on the timelines that were viewed. in the u.s. in particular, use all very slow growth. i was talking to matt miller about it earlier and he said i'm , i'm all day at work always broadcasting and tweeting out. how much more can you be on it? >> i am on it as well. made pictures larger. how much can twitter actually do when it comes to a product respective to re-accelerate user growth, or to a certain extent, is that out of their control?
sometimes these things just happen organically, or they don't. theythink there is a lot can do. in some sense because the product has not evolved much in the last couple of years, it's in part because there is an uneasy tension between the company and developers on the platform. twitter has sort of reembrace the developer community. if anywhere that's where you'll see a lot of the changes the company needs in terms of new products to drive things. that do the ones new crazy and interesting things to attract users. if twitter could, they would have done it already, and they haven't. >> what kind of products should date make? should be about partnerships with other companies like sound cloud, for example? >> it should be all of those things.
they should look at some companies that need to become rapidly obsolete. do all these companies exist that are at the margins of doing things people expect should be happening inside the core twitter rodda? the whole ecosystem needs to change -- the core twitter rodda. .- product >> dick costolo will be with us tomorrow. you do not want to miss that interview. coming up, were talking about google and larry page turning the page. ♪
it's one of the biggest executive shakeup since page became ceo. what does it mean for the search engine giant? will it help them keep a competitive edge on facebook and amazon? joining me to discuss it is cory johnson and brad stone. you recently interviewed him for a big story on business week. what's he like? >> he's great to talk to. he's incredibly modest and has a deep knowledge of all of google's business. he knows everyone's business, even when he's not responsible for and he's just endearing. even nice guy with a perpetual smile and very likable. i talked to him twice. i talked to him before this debut of the new version of android. he had someone with him who was responsible for android and
chrome will stop clearly the android and chrome divisions are well tended to and that's how he's able to scale himself. >> is it more symbolic or is it real? >> he can now be the chief innovator. when tech companies get to 20 years old, they might naturally split up. google is 16 years old and the disruptor has been disruptor -- has been disrupted by mobile. now larry page will go and think about how to keep up with these businesses. >> there is an anecdote that he would sit outside of marissa mayer's office waiting to argue on behalf of his team. >> he's proven himself to be a tenacious negotiator. going toe to toe with samsung to
make sure samsung was playing nicely. >> does it break the agreements? >> i think he has proven himself to be a good diplomat as well. maybe laying down the law but sewing -- showing them some why it is a win/win relationship. >> he's very modest and says this is larry's job. he is clearly the number one deputy. i don't know if there would be any question if larry retired tomorrow that it's not a role he would want. >> and youtube does not count in this. google has always had this second layer but do you see a
rising second-generation of leaders? >> that leadership team is all veterans. >> most of them have been there since the beginning. it is a leadership team that is incredibly loyal to the company and i don't see them going anywhere anytime soon. >> let's talk about his track record and how successful those products have been. >> and has been successful. you got the toolbar that started google's move into the browser and then you had the chrome browser, the market leader today, making up a lot of ground on internet explore your. >> and crushing safari and mozilla. >> and put in a difficult position when andy rubin left to pursue his independent robotics project, taking over the leadership at android and
chrome, doing things like comcast and bringing out lollipop, reducing on the low end with android one. the new nexus six smartphone -- a lot of responsibility seems to be a good manager and larry page seems to trust them. >> politically, it was not about making friends as much as not making enemies. he is hard to dislike will stop >> we will be following as he embarks on this new phase. thank you so much. still ahead, why is it taking so long to find a cure for ebola and how long has the tech for experimental drugs that around? that story is next. ♪
>> i'm emily chang, and this is "bloomberg west" streaming on your phone, tablet, apple tv and amazon fire tv. team treating craig spencer for ebola is considering any and all experimental drugs that could help, but the technology for antibody cocktails has been around for a few decades. that's according to a professor of microbiology at tulane university. why has it taken so long to get an ebola vaccine and why are there so few doses on hand? for more him i want to bring in the author of "the naked future." is it true this capability has been around for decades and only now we are trying to take
advantage of it? >> the ability to very quickly produce lots of experimental drugs is something that has been an ongoing area of research, particularly in military research for a long time. the methodology is not too difficult. it's costing the delays is the cost of human trials. typically it will increase the cost of producing a drug by as much as 90%. some of them are obtaining records for the different people you're going to include in the trial. there's a lot of observational cost and it can take as much as $5 billion to run an experimental drug through clinical trials. z-mapp was developed with military money, not $10 million just to put the things together to put this drug together that
has been effective in monkey trials and was effective in the first two american ebola victims. there's a difference between saying they recovered because of z-mapp and say that they recovered and were given z-mapp. that's why we need the clinical trials and that's why we need to incur the delays and costs. >> why were these trials not conducted before now? did they just not inc. it was this big the threat? >> the head of the nih has said we would have a treatment and a vaccine, if not for cuts to research and development funding. we have known about different therapeutic options and have been working at nih since 2001 but because of cuts to our funding, we were not able to get any of them in place for these
large-scale trials. there were not a ton of commercial entities interested in partnering to create an ebola vaccine that wasn't seen as a moneymaker, so that gives it -- that leaves it up to government to push this stuff through and i would say it did not become a priority and it's not something they could justify spending limited resource ahlers on developing and a bowl of vaccine or a cure when they already had some that were in place but the entire effort stalled out because of funding cuts. >> what other funding technologies are out there that are optimistic and you look good in terms of being a cure or in terms of becoming a vaccine? >> there are a couple of different vaccines they are looking at right now.
the hope is they will have something available by january. january is when the who has protected -- addicted the outbreak could reach a worse case scenario threshold, like 1.5 million cases. those two things happening at the same time suggested a huge amount of urgency. it looks like z-mapp has been effective in monkey trials and they are looking to ramp up production as quickly as possible and that's why map pharmaceuticals has received 30 -- excuse me come a 45 million dollars to help increase production as quickly as possible. in many ways, we think we have the components in place to treat and cure this and now it is scaling up to meet demand, which could be huge. you and i have talked about how technology can help.
how are these things actually helping? >> let's take screening. we were talking about a particular screening technology that was in place in texas presbyterian but wasn't being used and had been cleared to screen for ebola. just this weekend, the fda announced they were going to allow emergency use authorization to screen for ebola in hospitals across the country, including in the tri-state area where there are quarantines. and it's going to give you a readout in about one hour. that suggests things will get more firm and understandable from here on out. >> patrick tucker, thank you for keeping us up to date on everything going on with the technology going on to fight this disease will stop -- this disease. jack ma is on the hunt in hollywood -- could he play a role in getting access to the
>> you are watching bloomberg west. alibaba's jack mize here in california today, meeting with silicon valley and tech elite. he is leaving a team of alibaba executives through hollywood this week, hoping to strike deals that would host its online content offering. he is set to meet with studios, like lions gate, disney, viacom, and time warner. what could a partnership with alibaba mean for l.a. studios hoping to expand in the second-largest film market in the world?
christopher spicer joins us now via skype, he specializes at the school of theater and television. how big a business could entertainment being for alibaba? what would this mean? >> it could be huge for them for a number of reasons. primarily, they have a huge online platform, obviously. and they are looking to grow our that platform -- growth that platform for the biggest way they can do that is grew that content, and international content is here in hollywood. that is reasonably what he is meeting studio executives to talk about. >> talk about what chinese consumers want. i lived in china, there are a
lot of pirated copies there. how much of a demand is therefore streaming content? >> a long answer to that question. but with the growing middle class in china, the theatrical business is booming and expanding. my guess is within the next 3-5 years china will, i do notice a crackdown, but there will be a viable streaming market. obviously alibaba is in a position to take it vantage of that. the chinese middle class want international movies, they want to say big -- see big hollywood productions, they will have the capacity to stream international shows, film, content, as we do here. >> the chinese government has also cracked down on streaming. they pulled the big bang theory, which was getting 120 million viewers, streams per month.
what kind of challenges will alibaba run into here with its own government? >> censorship across all platforms, you are going to have to get past the boards. presumably alibaba and jack martin a better -- ma are in a better position than anyone else to take a distributor and do whatever they need to do to have that content should be did in china. >> how big a deal with this before the studios? -- would this be for the studios? such as lions gate? >> there is a long history of hollywood studios, wealthy, high
net worth individuals who've done well in other industries investing. there is a big deal that they are huge numbers. jack ma $20 billion. it is also going the other way from u.s. to china. it is easier to get a film distributed in china than it was three years ago, but it is still challenging. it is important to have key relationships if you want to be in china and grow your business, and it is the second largest market in the world. >> online video is a hot growth area, and the chinese version of youtube has been reaching out to u.s. entertainment companies for help. what kind of progress to receive their -- could we see there? >> it is the same thing. that is a mature market here, and the studios that produce
that kind of content have the expertise. it is a huge market in china, that is largely untapped as of now. companies here see it as a huge growth opportunity. >> chris spicer, thank you so much. android is the operating system most use to access the mobile web, but does it draw the most mobile revenue? ♪
>> i am emily chang. this is "bloomberg west," live on bbg television and streaming on your phone, tablet, and at bloomberg.com, now on apple tv and amazon fire tv. android users count for 56 percent of all mobile traffic users. still, ios dominates mobile revenue with 21.2% of the market. those are part of the state of mobile advertising report. >> this looks at 90% of the top global advertising who run mobile campaigns. i am so fascinated by this. how these two devices that are so very similar, the iphone and the android smartphone, have very different demographics and user numbers about how they use the phone. what is the biggest difference?
ex in the united states we see that iphone users tend to skewed toward more consumer usage, while the android devices skew a little more toward enterprise customers. this is reflect the above the big change that has happened over the past five years. blackberry users moving to smartphones, and moving more to android. >> you can see that through data consumption, the volume of data that these users yank off the internet. >> absolutely. if you look at overall numbers, the android devices way outnumber the ios numbers. but in our business in the advertising space, we find that almost 60% of the impressions might come from an android device, but over 50% of the monetization happens on ios devices. >> is that because they are
rich, spend more? are there demographics about those ios people? >> there are some brands that value ios users more than android users rated goes to what type of brand image that they are trying to build. >> rolls-royce? beers? >> the high-end automotive guys. there tends to be this inference that ios users are a little more at the than android users -- little more affluent than android users. we do not have a great view and as to that, but from an advertising standpoint it seems to be paying off. >> it is not certain that they have more money, but they target at ios, and do not spend as much money on the android use case. >> correct.
ios users actually spend more times with their ads. there is more engagement, particularly on the ipad. >> the tablet, which is a much bigger market share, they spent your time on it than their phones. -- more time on it than their phones. is that because the experience is more geared toward reading and slower use? >> it is more lifestyle oriented. the ios users just spend more time in more applications. they probably use the browser more than the typical android user. it just leads to more opportunities for them to engage with those ads.
>> from a business perspective, what is the stake in this? >> we are a market enabler. we service both the publisher side and the advertiser. whenever there is a great economy, and there is more spend going into the economy, we benefit. we are a transactional-based system. no matter, android or iphone, advertisers want to reach a consumer audience. >> may be advertisers have a great opportunity to get more bang for their buck buying ads on android. >> that certainly is happening. but let's look at a new format like video. video is really blowing up in mobile today. and again, ios is showing much stronger engagement for those video ads, and advertisers are looking to leverage the spending they are spending on tv and bringing that to a digital media because it is cheaper and more measurable and have greater access.
unlike a tv ad which is about frequency, a mobile ad is about driving some type of concerns version. >> so do you see more of these paired ads, tv combined with ios, or do you see them moving advertising dollars away from tv to this measured online video ad? >> we are seeing both. there is this pillar spend on tv, desktop, mobile, we are in the middle of the world series. you look at mlb that can leverage a lot of tv spend, and then build these companion experiences. you might be watching tv and watching the world series, but you might have your ipad on your lap and connecting those at experiences. -- ad experiences per in what you see that is not interactive
>> welcome back. with apple and samsung launching new devices, we talked about how these could sell during the holiday season, but what about the products their competitors launched as well? let's talk about three products you probably forgot about. always great to have you back on the show. we don't want to make any assumptions. we are saying this is likely. start with google. has been veryine well received. it's one of those things google has set the bar for everybody else. the software has become the operating system through the cloud. if you imagine 10 years ago, we are buying hardware and prices of software 10 years ago.
complete, because it's like having heart of your software and operating systems. >> i would like to add that you actually have all of these things. you have tried them out. question mark are these guys not getting enough attention? x is a pretty good phone. things, butertain there's not enough to set these apart. how often do i really need to buy something in ship it to my house? plugis is something you into your television. you've already bought that as well but you haven't gotten it yet here it are they walking down the same path potentially? but the thing about amazon, google, it and apple, they are
competing for that same thing, the operating system of everyday life a bit people want to watch content on their television. it's a standalone line of products. if you think about it that way, it doesn't make sense. ? >> amazon is saying, these guys are eating our lunch. so they undercut the chrome cast. >> tell me about the fire phone. can it come back from the dead? >> it absolutely can come back. you look at microsoft from the early 1990's when netscape was dominating the browser scene. amazon came out and it was a dud. google is doing the same thing with their android device as well. the first device was terrible,
and now it has gone amazingly better. >> they just got a huge promotion at google. he has generally a very good or well respect to track record. is he not doing enough? >> google has recognized the operating system of the world is now the cloud. and to actually win the operating system game you have to have a person with a vision in charge of the connect of products together. >> can he actually do it? >> can apple do it better ? live >> apple will make better money. thele is saying let's make hardware commodity. hardware.ll you the apple can do that because they have figured out how to make better hardware.
>> let's talk about market share versus mind share. android has most of the market share, but apple has most of the mind share. is that a fair assessment? why would that be happening? if there is all of these people using android phones? >> you have seen this from the engineering economy, to the creative class. new innovative apps come out on apple first, because it is the platform for the creative class. you do not have to be the first, you just have to have the right ecosystem. >> would you say that apple is not the first, but the best? >> they are the most creatively -- they foster the best creativity right now. they are the ones that people think of when they want to release an innovative product. apple is going to have to keep
that market share of. up./ >> thank you. it is time now for the bwest byte. what do you have? >> 1 to 20. one in 20 germans have a credit card, compared to the average america who has 2.2 per person. why would the credit card companies allow apple to piggyback on top of its rails? if you think globally, credit card companies will get a general benefit from having better biometric security. but apple pay could be an and evangelist for the credit card company in europe, where they
have such small market share for a variety of reasons. credit card companies could get a lot out of this partnership because it did compel europe and -- because it could compel europe to use more credit card. s. they are using debit cards. could that be the future? credit card companies, because merchants have limits on how much they can charge, they are pushing for them. they used direct debit and paypal in large numbers in germany and other parts of europe as well. they have a very large payment system over there that they are trying to get into. >> that's an interesting way to look at it. >> thank you all for watching this addition of bloomberg west. all of our headlines are on line all the time at bloomberg.com. ?