tv Bloomberg Business Week Bloomberg April 30, 2016 3:00pm-4:01pm EDT
carol: welcome to bloomberg businessweek. yahoo! is up to sale but what's with the negative valuation? david: they are building a stadium for the atlanta braves for anyone but the atlanta braves. on bloombergead businessweek. join nobody ended -- join now by the editor of bloomberg businessweek. a senator from massachusetts is
taking a look at it. willst week we did a story that show six major cities where amazon prime one day service was available. it was not available in predominantly black areas. it was not the intention of amazon to discriminate, but the result was there were these lines. in boston, it was extremely obvious because the delivery service excluded rocks very -- excluded rocks very -- excluded roxbury. there was a hoopla and the mayor asked questions and senator markey of massachusetts demanded answers. as of today, amazon have that -- have backtracked and said they will be getting this one day service now. david: in the global economic section, an amazing piece about wild cap minors going after amber in ukraine. >> ukraine is a bit of a mess
. they have rebels backed by russia fighting in the east. maybe not fighting, but there is still a lot of tension still. and certains forests, people are illegally trying to mine amber, which is , and it is that lovely orange gem that is very expensive. they are trying to make a living doing this because it is so hard to make a living in ukraine right now. it is a messy process. theseve to deal with ancient pools of water. sometimes these gems are getting damaged and can't be polished properly.
it is a desperate attempt to replace lost income. it is costing them a lot of money. so many of their resources are being directed at other things. they are trying to do something about it. the cover story is about yahoo! davidthe cover story is about yahoo! with bids being tendered : and people are looking at the tenure of marissa mayer's. what is the story about? >> the story looks at all the pressure on yahoo! and whether the ceo could have fixed it. yahoo! is an old tech company as silicon valley goes. it has a ton of problems and a lot of its value lies in its stake in ali baba which will probably spun off in one way or another and there are tax problems associated with doing a
full-fledged spinoff. could she have fixed this company? she is focused on reading new products but it has not really made a dent on it problems. david: carol massar talked about that story. >> yahoo! with nine thousand employees and services, it the way that you and me and our parents get on the internet. that is one part of the company and then there is another part of the company that has a stock portfolio and that stock folio by its they'll is worth more than the entire market value of of yao -- of ya who -- hoo! investors have lost confidence ceo marissa
, mayer. carol: take us back because at one point it was a successful company. >> 15 years ago it was. it was unstoppable. it went into decline starting in the early oughts. more recently, around the time marissa mayer took over with the rise of mobile. they make money through banner ads and it does not work well on cell phones. she inherited a position that was almost impossible. carol: when she was brought in, people thought it was a great move. >> some directors and investors were kind of charmed by her star power. i think they lost sight of how challenging it was going to be. if you want to lay some blame on the management of yahoo!, you might say that marissa mayer and some of her management team got taken in by the same we can do anything feeling. this was a troubled company from the jump. carol: who knew that changing coffee at their headquarters
would make a difference but a -- but it changed morale a little bit. >> it's funny to look back at the press when she first took over. she made lunch free and everyone said that's amazing. just a few months ago, investors were talking about her profligacy and she spent all this money on these perks and nothing had come of it so it narrative has shifted in six months. carol: she also went on a buying spree, bunch of acquisitions and paid about $1 billion for one company. did they make sense? >> it depends who you ask. one acquisition did not pay off which was tumblr. that did not work out so well. they have written down a good chunk. the smaller acquisitions, i think that is a bit more open for debate.
i think there is some truth to it. this is kind of how it is done in silicon valley. that was the strategy and it sort of worked. carol: does she get to keep the job ultimately when the assets are sold off? >> it seems unlikely. what is most likely going to happen is that yahoo! will be sold to a company like verizon. even in marissa mayer were allowed to keep the job, would you want to? she is a product person. over the next couple of years, there will be a lot of cuts and integration and corporate synergy. it is hard to imagine that she is the best person to do that or she would want to do that. it's much more likely she will wind up at a venture capital firm or a start up.
she is very talented. i think this was a case of may be a bad fit. carol: you may have noticed the cover page. david: we asked tracy ma how she came up with the concept. >> we were visualizing yahoo!'s last ditch effort to save itself . they arrived at potentially selling the company. once interesting about the state of affairs is everything you associate with yahoo!, the entire company, all the nostalgic feelings you have toured it is actually a negative asset. maybe put that desperation into a form people would recognize. idead you come to this immediately? >> we arrived at it pretty quickly with our earliest meetings. we wanted to scratch at the cell rummage sale fire
when his business was hacked and the hackers try to sell him protection from people like them. carol: nice of them. >> he declined to buy their protection and the hackers turned him into the ftc which try to make an example of him. david: he fought back against that and that's with rare about his story. the ftc in terms of what it requires, it's onerous. many others were just settle flat out. >> every other company caught in similar things did so. there are 60 cases in which the ftc brings these data privacy cases in. it's an extension of a businesses obligation under hipaa. in every other instance, the business did the math and decided it made more sense to settle. carol: he got a second life-changing call that made him realizes he had been had. >> he got a call from somebody who worked for the hackers. carol: richard wallace.
>> he said i was engaged in taking the data from your company and reaching in through a peer-to-peer network. he said that was me. he said i did that and other instances as art of the campaign. -- as part of the campaign. that finally changed the game. without that testimony -- he called him and over a couple of years, he testified to the same things before congress and finally made the same testimony in the ftc court. carol: that was a long track. >> he lost his entire business in the process. carol: a look at how unions are challenging the t-mobile in-house workers. >> the communications workers of america, when they supported the move by deutsche telekom, the
german telecom giant, to take over the predecessor company, they had hopes that it was more union friendly and it would mean this would be an easier company to organize. instead, we have a decade-long struggle between the union and the company in which the union and, in some cases, the national labor relations for prosecutors have accused the company of not wallowing u.s. labor law. for deutsche telekom, we have seen some heat from politicians in the u.s. and germany from some investors over these alleged violations of labor laws. in the meantime, cwa, a decade into their campaign, has not been able to get collective-bargaining contracts for any more than a handful of the 45,000 employees there. david: we are talking about
dozens? >> that's right, there are hundreds of employees or 1000 who have shown that they want to be part of cwa but it has not been able to get contracts for more than a few dozen workers at t-mobile. david: do the members site specific grievances with t-mobile and deutsche telekom? >> among the things that workers have raised as concerns are pressure in terms of workload and pace. there are allegations that people make about things like being told to wear a dunce cap if you don't get your work done top or managers shaking people's chairs and telling them to work faster. david: t-mobile has rebuffed these efforts for the workers to unionize but trying to find a new way for them to voice grievances and workers are skeptical. >> we were revealed a new twist in this fight which is that cwa is alleging that t-mobile has taken a page from american companies in the 1920's and 30's
by illegally setting up a so-called company union. it's a labor organization that looks and sounds like a union and that it's made up of employees and it deals with management or workplace issues but in fact is controlled by the company. this is an organization called t-voice that they rolled out around the country last year and ascribed to employees is made up of representatives as their voice. t-mobile has also sent communications to workers crediting t-voice with changes it's made in the work place perks like wi fi or cell phone charging stations. from the perspective of the union, this is illegal and misleading. rather than having an organization that deals with worker representatives elected by workers, you have an
seem to be pushing as far forward. can --e mississippi, mississippi considering a set of rules. day today it simmers back and forth and it determines what they will be focused on at any given time. then it will switch over to missouri or mississippi or tennessee. it could pop up anywhere at any time. we are nowhere near the end of this. best known the corporations around the country, tell me what they are doing. >> some of the biggest names in business are writing letters. especially in cities where they have a big presence.
salesforce is particularly active in places like indiana, where they have a lot of people. then you see paypal, which was considering bringing a lot of people to north carolina. you kind of see the companies get involved where they have people. that is clearly starting to become maybe not enough. they have been providing this funding. now it is starting to show up as really important to how they are going to do this move forward. you need somebody who says we need another 60 pictures on this letter -- 60 signatures on this letter. the right 10 companies means the next 200 companies are going to sign on. this is a new space for american business. >> is there a particular state that is the next battleground?
seeou are still waiting to what happens around mississippi and missouri. what they didn't know in north carolina was when something will suddenly pop. nobody knew it was going to happen until it happened. charlotte said we are going to let people who are just -- who are transgender choose the bathroom of their choice. we are in the situation where people are scrambling. they kind of practiced it last year in indiana. it is really a game of lacko mole. isthis summer session devoted entirely to travel. we asked why they have devoted time to sydney. >> it is totally understandable with an incredible food and beach scene. in the winter.e
it is still pretty mild during the day. actually a wonderful place to go. you can suggestion is stay over in l.a.. can stay in hotels that screens movies on the roof. but also some pretty awesome first-class lounges. if you aren't flying first class, you can pay to use them. you present an alternative, a little town just north of cancun. of -- s 26 miles can find a combination there that ranges from $100 per night to even $400 per night. you can snorkel with whale sharks. 41,000 pounds in doing the research. >> more from this travel guide.
it doesn't end here. because your laundry can wait! keep those sweatpants on! order another pizza! and watch on! [ cheering ] don't wait a whole year for xfinity watchathon week to return. upgrade now to add the premium channel of your choice so you can keep watching. call or go online today. still ahead in this issue, why
minor-league ballparks are rarely a good idea in small towns. and how to vacation like a king on the company dime. carol: it's all ahead on "bloomberg businessweek." ♪ david: i'm here with ellen pollock, the editor of "bloomberg businessweek." so many must-read stories in this issue. let's start about the opening remarks about alexander hamilton, he's going to keep alley dinner hamilton on the $10 bill. this is an historical figure who is been really lionized in popular culture over the last year or so. ellen: our economic correspondent peter coy takes alexander hamilton off of the broadway stage and actually talks about his economic policies. it is contribution to economic
thought in the u.s., and how it's had an impact even today. one of the things he did was sort of question laissez-faire attitudes of adam smith and really stressed that the government needed to be able to tax. and that the government needed to spend money. he said power without revenue was a bubble. i'm not sure what that means, but i think it's really important. he also stressed that the u.s. needed a manufacturing base, so we could compete with other markets. david: in the markets and finance section, you will get snowbirds, folks who live in canada been on vacation property here in the u.s. a huge percentage of vacation homeowners from overseas and the +u.s. are in fact, canadian. that is starting to change. ellen: you not understand the candidate is cold and florida's warm. it's been a natural place for canadians to invest and have second homes.
now, the real estate market in florida is getting kind of soft. and the canadians desire to sell and take their gains is part of it. one of the things that's motivating the canadians is the strength of the u.s. currency. their gains are looking quite as good, they are paying maintenance fees and other kinds of fees, property taxes in florida. they are trying to sell, and take their gains and invest them elsewhere. david: this politics play into this? ellen: they are. we have to talk to a canadian family that owns to vacation homes. they're going to sell one of them, and one of the things that worries them is how this election is going to end up. it's not like they are for one candidate or another, it's just the craziness of the selection is just worrying them. david: if each of these in issue about minor-league baseball team in mississippi just outside of jackson, that bets big on what minor-league baseball is going to be able to do for that town. ellen: it's all about the
atlanta braves, and the atlanta braves own all of their minor league teams. they build minor league stadiums in small or smallish towns, they have required big bond offerings to pay for the stadiums. small towns are eager to do business with them, and hope to read financial benefits. and then they find that the revenues from the stadiums, etc., are really paying what they need to pay back the debt. and they have to dip into the general funds. david: a cautionary tale. i talked kate smith. kate: it's this scruffy bedroom communities suburb of jackson, mississippi. they have virtually no economic development. there aren't any country -- any companies, there are no factories. this mayor who is desperate for development. he is looking for something in the stranger walks into his door, and that stranger is tim bennett.
he is this one of the minor-league deal maker. he just had a team fall apart in jackson. he said he needs a new town and a new team. and that is kind of how the whole story sartre -- whole story starts. of course like any other team they want to get as much as possible. get the dugout, the tunnel that goes from here to there. to stop to tell them and if you don't they are going to get everything. >> you hope there will be a following, that it will lead to the economic development. did that happen?
>> i think for the first couple of years it did. i was actually there for opening day back in april. there weren't a lot of people there. it was not a packed house. i would be exaggerating if i didn't say there were a hundred people left. >> the liberty media john malone connection, who was so deliberate in how he re-created this, he has done that with baseball as well. >> i look at many bond deals all the time. it was like you had to read read sentence for or five times.
let me tell you this story. it is so malone. you have these small towns or cities stuck with a huge price tag. be townsis going to around the country. >> it is a disappointing story, because no matter how many times you read an economic study you always have somebody who says, not quite. interviewed a guy named mike plant and he is the business development manager of the braves. he just goes out there and says all the sports economists are wrong. studies do you need to read before maybe you are wrong? >> capturing the images of the story and struggle of mississippi is a story in and of itself. piece,he case of this the obvious thing you want to see is the stadium and sense of small community.
he has done a lot of work dealing with poverty in ohio and parts of the south. would be able, from his long-term projects, to look at a place like pearl mississippi and see the players, see the texture of the community. >> this was an economically devastated -- there must have been some contrast there. >> there is something about the texture of new stuff, a minor-league stadium. they only ever look so good. there is a contrast and new business. there is a hard quality to the pictures and the place. i think that lends an
carol: welcome back to "bloomberg businessweek." david: a look at amazon's voice controlled speaker, the echo. brad: it may not be life-changing, but maybe reputation changing. the company is known for lukewarm devices like the fire phone, the echo has been a huge hit. it's a nine inch tall cylindrical speaker that listens
for verbal cues, sue can call out to it across the room using its wake word, which is alexa, unless you want to tinker with the options. you can ask it anything, you can shop with amazon, you can ask for the weather or asking questions like you would syria. it's just been a hugely popular hit for amazon, particularly for the hardware division lab 126. carol: take us back, how did the echo get built? brad: it's a great story that we lay on this week's magazine. it's like all things, probably a long, circuitous, slightly tortured story. we only see the actual finished product that most of these companies. amazon had been working on the echo for a long time. it called at the amazon dash at one point. it was supposed to be a more sophisticated, intricate device.
augmented reality, it was called, where there's an element of projected images on walls or tabletops. it also had this component of speech recognition, were you can ask it things. ultimately, as amazon's lab 126 hardware division really recovered from the flop of the fire phone, the overall dimensions of this project were narrowed, they really kind of focused in on being a very utilitarian speaker that could listen and answer people's queries. and that is what has risen for its customers. carol: i thought it would be apple or google that came out with a device like this. it blows my mind a little that it was amazon. brad: i think they would like that comments. they don't want to be counted out of this game to find the next generation of software and services that will control our lives. that's why this bet in hardware is all about. david: when you look at amazon and lab 126, and the echo, is it making money?
brad: that's a difficult question to answer. like all amazon devices, i think analysts and investors would probably assume that the devices themselves lose money. amazon tries to sell it right at cost. occasionally discounts the devices. is obviously a huge upfront investment and bring them to the market. this was a multiyear project. but the devices integrate so well with amazon's other services. everyone was buying an act oh in cash and -- an echo, it's locked customers into the amazon ecosystem. on the face, it may not be a profitable line item in amazon's financial results. but if it makes customers more loyal, it's probably a good bet. carol: big automakers are looking to remain competitive, they're are looking for a few friends in silicon valley. david: we spoke to reporters david welch. david: there are a lot of
technologies that are converging. you have autonomy coming to cars. right sharing going on. people are renting a car for a couple of hours and drive it themselves. these things are done by apps. that is the model everybody wants to get to, where you have this self driving car that picks you up after you reserve some time on it. andverybody stops owning driving their own car and go to these other services, they are going to be left in this old world business model. that makes silicon valley very opportunistic and tokyo copies a bit nervous. >> you also look at the other side of the coin. why does google or apple need a partnership like this one?
>> would they want to get into the business of making cars? that's capital intensive, expensive, not high-margin. those companies are in massively high-margin low capital businesses. with a would rather do, particularly google -- they would like to partner up with one of the big car companies and have them be lebron, the muscle that makes the car. google will do all the brains that makes the car self driving and does the connectivity and links it up to different web services. the possibilities are kind of endless. if you have an autonomous car, would you take people's eyeballs off the road, the limits of what you can do with someone like google and the connectivity is only limited by their imagination. carol: a tip sheet on how to go phone free. david: i spoke with editor brent vegan. brits: -- brett: do take your smart with you or leave them behind? david: what do you do about photos? brett: go to my friends. >> we recommended about a different things you might want to pick up that would make using
a real camera a lot more fun. every thing from printers to little mini projectors. we recommended a $100 bullet camera, which is fun and comes with a lot of colors. there's a drone that we recommended. bret: we do recommend the fanny pack. >> you can put your passport in their, a point-and-click camera. it's revitalizing the idea of using your camera instead of your phone. >> there will be those who say i have to take my phone with me. you have a few apps. perhaps we could download them. >> face tune is one. blemishes.liminate something called after light, which is popular.
businessweek." i'm david gura. carol: and i'm carol massar. in this week's market and finance section, a look at credit card turners. david: these are people who squeeze credit card companies for free stuff. >> turning is the process of opening up several new greg hardy for the sign on bonus, and then moving on to another set of credit cards. people and up with 20, 30, 40 credit cards. intensive.e you need to be very organized, you need to be -- you need to have a high credit score to begin with. if you do this wrong, your credit can be complete with destroyed. carol: you can't spend a look what you have access to, or you get into trouble. >> in you to meet the minimum spending requirements to get the sign-up bonus, but don't go any further. carol: we are talking about mileage and stuff like that. >> hotel, travel perks,
airlines. there are a ton of new credit cards that come out that are trying to get loyal customers. even small airlines have their own cards. david: are banks encouraging this? what about the people that are getting 20 credit cards? >> the banks see this is a necessary evil. they want to have people be loyal to their cards. they have higher interest rates than other cards. they are eventually going to make their money back. but they are doing some things to limit the number of turners who are out there. the people who are gaming the system. they are making the rules and you can only apply for five credit cards in two years. carol: you wrote this story, it is a fun read. what is your advice to someone who may want to do this? >> be very careful. maybe start small. there are plenty of ways you can game the system in a small way. take out one or two credit cards
that have attractive bonuses. see if you can handle that before you get into getting into the deep end. carol: but it is legal. >> completely legal. the credit card company's didn't want this to happen, they could do some thing about it. david: learn how to vacation on the company dime. here's editor brent vegan. >> you may be able to get your boss to pay for a vacation if you choose wisely. there are amazing conferences, a lot in european cities in june, in berlin, in london. there's also a couple in montreal, and in france. we are suggested that only the conference to go to, but maybe in between sessions, some things to do while you are there so it will actually feel like a vacation. david: there's a conference i can go to in france. >> june 18 through 26, you still have time to book. starts at about $1700 a person. you may ask your boss is if they may want to send you there. while you are there, you can go to the beach.
david: you have to. >> you are in france in the middle of the summer, what else are you going to do? david: a lot of these european cities tried to cultivate getting people to come there for work. places that i, david gura, who lives in new york, would love to get out and see these other cities. >> there are a lot of cities, it's a way for you to meet people who are pre-or post pivot investment capitalists, angel investors. they happened to be in great world-class cities. carol: "bloomberg businessweek," is on business stands now. and online. we'll see you next week. ♪