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tv   Squawk Alley  CNBC  August 4, 2015 11:00am-12:01pm EDT

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good morning, it is 8:00 a.m. in cupertino, california, 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪ ♪ ♪ smrks ♪ ♪ good tuesday morning, welcome to "squawk alley," joining us dan rosensweig joins us. kayla will join us on the phone later on. our first story this morning, apple in the red again. down nearly 3%. after yesterday's 2% fall, that's enough to officially push the stock into correction territory. down to the lowest level since january below the 200-day.
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concerns about growth in china weighing on investors after one report that apple had been replaced by xiaomi as the smartphone maker. it points to a lingering concern is that market share in china one of the most important markets is gn to the down side, not the up side. >> if you want to look at apple's reaction to china, there's a couple of conflicting data points you have to consider. in the conference call tim cook said equity markets have recently been volatile this could create speed bumps in the near term. then he said about the stock market, this worry is probably overstated. so we're not changing anything, we have the pedal to the metal. lpe penetration in china is only 20%. people are getting phones that can handle faster internet speeds, the middle class is growing. but at the same time he's saying in the short term maybe it does show up somehow in the numbers.
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we're still growing fast. >> are we in a period where we don't know what the holiday is going to look like for these guys? we don't know how big the phone cycle is? below 114 is startling. >> i think if you're thinking about china as a component of the holidays, don't. they don't have the same holidays. the second thing is they're not going to be as successful as they could be in china unless they lower the price. >> they've done everything right. but a lower priced clone made from china is going to do better. that's the way it is and that's the way it's happened with every u.s. company that's tried to go in there. >> yet they've said that the six plus which is bigger screen, more expensive is doing bet anywhere china and they were up 90%, 87% year over year last quarter. given the fact that they're on this growth trajectory they've got the phone that the chinese consumer wants, sizewise, is there maybe a big-enough niche of chinese consumer who is can afford it that they'll continue to grow? >> i think you said the last
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part correctly. which is the six plus, which i love and i have. that is for the high-end chinese market. we talk about the growing middle class, this is not the growing middle class, this is the upper class in china that goes to the best schools. that may be studying abroad. it's those kinds of families and those kinds of people. the question is can they break below that and get into the middle class. that's where they're losing the battle. >> we talked to milanovich and asked him where would you bring in the buy-back, he said 110, 100. but that's not happening any time soon. >> that's not something i understand much in terms of what they can do they have so much capital. they can do whatever they want. >> it depends on how much is state-side. >> some good news from apple came from taylor swift on the cover of september's "vanity fair." she talked about her fight and make-up with apple music. they treated me like i was a
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voice of a creative community that they cared about. and i found it ironic that the multimillion-dollar company reacted to criticism with humility and the start-up with no cash flow, by that she means spotify, reacted to criticism like a corporate machine. taking a swing at spotify, which swift pulled her music from. the author of that will join us later on "squawk alley." spotify one of the best-funded units on the private side. >> taylor swift is the best at managing her brand. something about the tone of this struck me as punching down. maybe a little too proud of herself about getting this reversal from apple. i don't know, maybe it's just her own nicki minaj apology still ringing in my ears she stepped in that pop culture moment. no doubt she is very influential in this streaming game right now. but she's also a megastar. so she's got more clout than a
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lot of people at the end. it's not like she came in and solved everything streamingwise. >> she's a great talent. i had a chance of meeting her. my daughters love her. we love her. she's amazing. she has clout. she's using it. but let's be clear. i don't think it's shows down spotify's subscription sales at all. it's happened her sell more of her cds, which is good for her. it hasn't fixed the music issue. so we did a study when apple music came out. we're the largest student network in the world. only 8% of students were likely to take music just because it was apple. >> i wonder if beats one changed a lot of that. it's been getting praise from critical music fans who say this global radio station that a lot of people including myself are making fun of, before it
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launched, they've done a good job with it. >> they've done a spectacular job. and their ceo used to work with us at yahoo, couldn't be more proud of them. but these are not things that change people's behavior. when you're dealing with the younger generation, they're happy with spotify believe it or not. more people use pandora than spotify on the free side. but more people use spotify than pandora on the paying side. >> we want to get to alibaba stories but first we have breaking news. >> a u.s. judge is rejecting a class action settlement between american express and some merchants over swipe fees. a multibillion-dollar settlement that involved visa and mastercard. right now the ruling appears to only affect american express. the district judge saying that some of the plaintiff's lawyers may have played fast and loose in the american express case there were lawyers on opposing side that evidently shared
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confidential information. the judge is ordering one law firm to be removed as a co-lead counsel and has ordered a new round of briefing in this case over a swipe fee. a multimillion-dollar settlement. no ruling how it affects mastercard and visa. rejecting the class-action settlement for american express. alibaba is making a big hire with an eye towards its international expansion. naming former goldman banker michael evan as its new president. he's been a member of the board since last year. our coal oen kayla tausche is in china, knows the company well and is probably learning more as she makes her way around the country. kayla, what can you tell us about evans and what he means for this company? >> carl, i have to say this release this morning blou me away, not because he's someone i know personally, i don't.
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mike evans is the type of banker whose reputation precedes himself. i was impressed when alibaba was able to nab him for the board last year and have him advise the company leading up to the ipo. when you read the press release that's what seems to be corporate jargon. he'll help extend the alibaba brand with merchants, retail partners in europe and in the americas. but that's not just corporate jargon. i think the most pertinent part of the cv to what alibaba is trying to do is the fact that he was probably one of the most influential people in privatizing china's businesses. he took china telecom public. which was the very first data and enterprise in china to actually tap the public markets in hong kong and in new york. he took bank of china public. he took petrochina public. he's no stranger to scale. he has a sixth sense about how the market is viewing something. for a company who has struggled to keep its shares above the ipo
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price and hasn't traded near the high since the ipo in a long time, i think he's exactly what the company needs. i expect him to talk a lot about the role that the company will play. i think it's an impressive move and i'm surprised that the stock hasn't moved up more in response to the announcement. >> your thoughts on this? we've all wondered what the aspirations are, ex-china, does this give us a clue? >> i don't know if it gives you a clue as much as they're trying to beef up the quality of their management team and u.s.-size it i happened to talk to joe about two or three weeks ago when he was in valley. >> chinese companies have a longer time horizon than u.s. companies seem to. they're carefully eyeing the u.s. they're making more investments than they are operating here. they're looking at the bigger categories. but their focus will remain on
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asia and china and continue to execute. >> dan, what does president mean in this context. i know in the u.s. where we're used to presidents being a number two operating role. but alibaba's structure. they've got a lot of different executives in operating roles. do you have clarity into what president means in this case? i don't. what i could imagine, is this is probably a title that it took to get them the job and it means that they're a significant, significant voice. as kayla says in terms of strategy and the vision of the company. >> kayla, we're going to see you back home in a few days. but i got to know if you're having fun, learning anything while you're there? >> i am, i started the trip in beijing. spent a couple of days in southwestern china, and now ending the trip in shanghai. hoping to bypass what appears to be a big typhoon headed our way. so hopefully see you guys back bright and early monday morning. a excited to tell our viewers
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about an important excursion i've been on for a last week or so and will have a lot of content to bring back to you guys as well. >> should apple be worried? are you seeing more xiaomi phones or more iphones there? >> i've seen an equal number of xiaomi phones and walway phones here. apple pokes its head out. especially with the volatility in the chinese stock market. the chinese appear very price-conscious and the chinese consumer is not very brand-conscious at all. they don't have a ton of brand loyalty. we'll see how it plays out. the price consciousness seems to be weighing heavily on the chinese consumer right now. >> kayla, safe travels home. our thanks to you. kayla tausche joining us in china. finally chegg dance company had results. beating estimates. the stock down less than 2% after raising the bottom end of
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guidance, is that right? >> we beat guidance on the total revenue, digital revenue. on ebita, earnings per share. we raised guidance for the second half of the year there was confusion, because remember, we're doing the transition from print to digital, as we come down in print. which we did a little bit, we raised our digital number. not only the amount we came down in print, but even more than that we're seeing great momentum in the business. the press just got it wrong and we've been spending the morning correcting it. the momentum in the business is extraordinarily strong. >> this often happen, i'm seeing when you're a smaller company and there's not necessarily a wire reporter, an actual person. maybe based in the u.s. who is reporting out your earnings. >> you get called the textbook rental company a lot. that hurts you. >> that's also incredible. >> you're broader than that the moving aside the traditional rental business. big picture -- what is chegg in
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terms of data and dealing with students and that very important demographic. >> the big companies in silicon valley. the ones that create the greatest value for their companies and shareholders, are platform-based companies. facebook, linkedin, netflix, spotify we were talking about earlier. ones that have huge categories, education is a trillion-dollar category, a largest customer base in their category. we have 50% of all college students and 75% of all high school students in our network. and use that data. we know your high school, grades, we know the cleggs you apply to we know the college you're in, we know your class, we can bring you more things than just your tech textbooks. 70% of our users use us for something other than textbooks, we had 700,000 digital subscribers in the quarter. which make up 45%. and our digital numbers, we were zero digital numbers four years ago, our current updated range
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is between 137 and 145. in four years we're creating nearly 140 million dollars of pure digital revenue growing fast. high gross margins make cash. we used to be a cash user when we were a textbook rental company. but the inram deal transformed that on a pro forma basis, we'll be between $175 million to $180 million. with 65% gross margins and making money. coming on and getting a chance to explain has been helpful to getting the story right. >> we'll see how it works. >> we're getting there. day by day we'll keep fighting the battle. the business overall a trillion-dollar category, high growth, high margin makes money and the lead anywhere the education space -- we're excited about our future. >> come back soon. when we come back, a lot more on apple. do you buy this dip or is this beginning of a longer reversal?
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plus what facebook needs to do to overtake youtube and video and fight back against recent criticism and disney reports tonight. hitting another all-time high. the magic kingdom reports. you focus on making great burgers, or building the best houses in town. or becoming the next highly-unlikely dotcom superstar. and us, we'll be right there with you,
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good morning, everyone, i'm sue herera with breaking news on apple. there's been a lot of talk that
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apple was going to launch its own virtual network service in the u.s. and possibly europe. apple is now saying that it is not planning and has not discussed a mobile virtual network and launching that type of service. the denial as i said follows media reports saying apple was in talks to set up an mvno in the u.s., but apple is saying it has not discussed, nor is it planning a mobile virtual network operator system. we will see, jon, something more 0 to talk about on apple today. >> sue, thanks so much. for more on that now shot down mvno number. will this has been floating out there for a while that apple is basically going to buy capacity wholesale from some carrier out there. a lot of people buy from at&t or verizon and kind of stamp its name on it and do something. but i don't know how much stock analysts were putting in that
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idea. does this change anything for you? >> no. i don't think so. i view it as unlikely they would want to move into the carrier game. the thought of wanting it take on those customer service headaches i think seemed unlikely. that said, i think apple does have real interests and the carriers whether it's the wireless carriers or the cable operators at some levels you look at ios 9 capabilities. i think the idea of them being an operator and being involved had with customer service, i think seems unlikely. other factors are impacting the stock today. >> speaking of, the stock is trading down under $115 a share. down in february. levels, january levels even. what do you make of this? is this just a buying opportunity? all of this due to concerns about china? what should investors do here? >> i think it's a combination of things. look from a technical standpoint as you noted.
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previously, breaking the 200-day moving average is the latest catalyst. i think there are lingering questions on china. i think the proof will be in the pudding. i think the biggest concern is that the company had an enormous iphone shipment. i think there are concerns as to whether they can beat that. we think they can. combining with factors, we like the stock here, so we would be buyers. >> when would we get clarity on whether or not that's doable. we've gotten headlines about the number of suppliers they're bringing on. record cycle but how would we, when would we know? how the december quarter going to shape up? >> i would love to know in advance. at the end of the day, we won't know until the numbers are posted as you get into january next year. >> sure i mean as we get guidance, following the next
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quarter, start to have a sense for what the company is expecting for shipments on that front. we look at the supply chain indicators, those seem to be fairly robust. typically despite what are normal concerns, going into the s cycle. somewhat more evolutionary than revolutionary. the stock performs well in the month leading up. our expectation is that you'll get building hike, you couple it with the apple tv rumors as you move into 2016. i like the set-up heading into next year. >> we get a week and a half two weeks worth of new iphone sales at the back end of the september quarter. end of the fiscal year. even color into gross margins on nut phone. which we expect will have the same diesign as the 6 and 6 plu. might that be something that
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gives insight into the december quarter. particularly for strong international sales of the new phone. >> that speaks to the earlier questions as well. think i've helped answer that. i think we're looking in that. the expectation is this iphone shipments will be flat, maybe up somewhat sequentially. and what should be a lighter seasonal period in large part because we expect a lift from the new device in the latter part. of september. so no question, that will be a big focus. as will the asp. which you look back and you talk about competition. one of the things that still gets missed to a degree is how strong the asp has been in what's a competitive consumer electronics space. >> they seem to be the only ones who can charge even more for the six plus, everybody else facing pricing pressure. will power thanks for joining us. the always outspoken angel investor jason calacanis on the
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war between youtube and facebook on video and how facebook could win it if it wanted to. ♪ no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great. i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one.
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♪ ♪ pretty flat action in europe, they're about to close, let's get simon at post 9. >> flat to negative. we've broken the five-day winning streak as you can see. there's red on the screen. the second day that the greek market has been open as you can see. and currently down 1.7% after yesterday's 17% plunge by the close. what's important is to know what the banks are doing. the banks again, you see they're limit down. every day they can trade. if they fall 30%, they halt the trade for the session, that's the second day that they're down 30% and i mean just becoming fractions as you look to whether there's any value left in them in advance of recapitalization
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and a bail-in of equity shareholders. the equity shareholders taking the losses there. shire pharma has plunged during the course of the session in london as it became apparent that it is going to bid $30 billion in an all-stock offer for baxalta in switzerland. it initially plunged 10%, it's recovered some ground during the course of that. the bigger news by far for most europeans is the earnings that are coming through and they're notably more mixed today. if not on the earnings, perhaps on the commentary. credit agricole, a french bank saying it can't restructure and simplify the trading portion from the savings bank voting portion, it's kind of or contain. but people had hoped that might unlock shareholder value. it's not. they're down. other stocks with a negative bias, it's true to say that the italian, spanish and portuguese banks have let us down during the course of the session. spain is lower, italy lower. it may not be insignificant in
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that in catalan today, barcelona that region the spain, that actually last night, the catalan premiere declared an early regional election for september 27th. he's not saying this is going to be a referendum on independence from the rest of spain, but clearly the tensions are going to rise with madrid as we move forward. citi is saying it's unlikely that catalonia will become an independent state. that's not in the cards, but you may see tensions rise over the next six weeks to two months, i'm not sure that we're at that is the eurozone going to split apart stage like we were three or four months ago. and the row goes on. back to you. >> cycle hobbs, when we come back, quite a run for facebook and google. both stocks up big. what video means for these companies and how facebook could take the lead, when we come back. you're watching cnbc.
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good morning, everyone, i'm sue herera with your cnbc news update. a federal lawsuit has been filed in kentucky over two elementary school students with disability who is were handcuffed in school by a sheriff's deputy for
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misbehaving. the video released by the aclu shows an a 8-year-old boy crying out as he sits in a chair. and a 9-year-old girl was also cuffed. japan says it will suspend the relocation of a u.s. air base on the island of okinawa for one month. the government wants to move the base to another part of the island. but many residents want to get rid of it altogether. and amazon setting new limits on its prime service, making it more difficult to split it with other people under the new plan. new subscribers will only be able to share the service with one other adult, other than four others. and a giant sinkhole opening up in brooklyn, new york this morning. swallowing up most of the intersection of fifth avenue and 64th street in sunset park. diverting traffic, it was a mess there this morning. no injuries were immediately reported. that's your cnbc news update
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this hour. taking a look at the markets, we've been in a tight band all day long. the dow is down 15 points, apple taking the biggest chunk out of it a lot of discussion of apple this hour and all morning long, but the volume on apple has been stunning. i think we've traded almost 60 million shares already, a third above the 30-day average on volume. that's a focus of attention. netflix up 4% on not a lot of news, the new initiation over on guggenheim with a buy. was pennies away from a record. >> apple off the lows. it was down more than 4% as this show was starting now it's down about 3%. i think a lot of people trying to figure out what to make of this china stuff. there are a couple of different ways you could go with it. of course apple acknowledged that there could be issues with the economy, with the market
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threat. but at the same time banking so much on growth over there. you're looking to nearly double the number of stores in the next nine months. that's a significant investment that they're making. you got to think that's going to pay dividends. >> cook i think called the problem overstated in the most recent call. we'll have to wait as will power just told us from baird, we're not going to get a lot of color until we get closer to the quarter itself. and then there's twitter up slightly this morning after falling to record lows yesterday. investors still worries about the company's user growth and waiting for guidance from the next ceo. weighing on this, angel investor jason calacanis, the ceo of inside.com. good to see you. >> great to be here. >> you had a bit of a tweet storm on this wrap up your thoughts on what exactly is ailing twitter this time. >> the ceo transition is not super smooth. to get on the conference call and talk about all the bad things about the stock and the
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company. think is a little mistake. >> you have to have some clarity on what jack's role is going to be, jack is super-talented, super smart. do we know if he wants the job? is he saying if he wants the job or not? i think having a lot of clarity there would have a long way. so people could say jack's the guy or jack's not the guy. that lack of clarity is definitely hurting things. >> you said can't tell if he wants job or is being mensch by holding down the fort. >> he is in love with the company, he started it. he created one of the greatest technology products of this generation. if you want that job you have to say i'm in the running for this job, i'm going to take this job and leaders define reality as we know and the reality that they're defining right now is very murky. like should you buy the stock? they don't seem to think you should buy their stock. all of these great things going on. to focus on the one thing that's going wrong and make that the entire focus of the last conference call, and not all the
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amazing things that are going on is a critical mistake. because who wants to come work for a company or own a stock if the management isn't really bullish on it. i mean it's great to be realistic. but we also have to show the good stuff as well. think they're making a little mistake. it's not very clear. and maybe the transition should have been done clearer. >> isn't growth a big thing not to be going right? not only are we not growing and not satisfied with that. all the stuff that we threw out there to improve the product over the last few months hasn't had any impact on. oh, by the way, we're not sure when any of our efforts are going to have any impact whatsoever. >> they're setting the bar low and growth is important. but i think a lot of people would argue that revenue and being a sustainable business is also equally important, if not more important. there's a good revenue story and the people who are using the service are fantastic. they've got the presidential debates are occurring every day on twitter.
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there are these amazing things going on on the platform. there's a natural audience for twitter and we're pairing it with the vine and the periscope and products we're planning to launch. but they're not being clear and pushing dick out and putting jack in and we don't know who is going to be the next ceo, is creating a lot of uncertainty. there's a better place to put your money in a lot of ininvestors' minds. they'll get the product to grow over time. maybe it needs to be a house of brands as opposed to one brand that everything is riding on. now the growth of periscope and vine are signs they can do this very well. >> right or wrong, conspiracy theories abound that they're intentionally trying to soften up the price to attract some buyers. do you have have any problem with that point of view? >> it's an interesting conspiracy theory. think it's a little bit loopy to be honest. i don't think you're going to
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drive the stock down. it's unethical and weird to do something like that. what i do think is that google shut down google plus this week or de-emphasized it let's say. that's a great opportunity. but you know, i wouldn't be surprised if facebook wants to own this company as well. there's a price at which somebody will buy it and maybe that's easier for the board and for all the major shareholders to just get a great price, somebody pays $10 above what the stock is trading for now. $15 and everybody gets out at a good price. and you don't have to deal with solving these problems. >> speaking of facebook, criticism out on the internet over the way they count video views and how that stacks them up versus youtube, the idea that they count after three seconds' worth of viewing, which isn't really watching the video. youtube closer to 30 seconds before they count a view. how much does that mat centre from a content standpoint, i sure want to know if people are spending a significant amount of time viewing the content if i'm an advertiser, right?
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>> absolutely. what you have to do is also consider the source, the source of this is hank green, one of the classic youtube stars, somebody whose stardom comes from youtube. he's funded by youtube. one of the few anointed people. he came out and just totally attacked facebook, they're lying, cheating, stealing. >> is that true? >> that's a sure sign that facebook is having an impact. >> i think facebook is playing fast and loose with the numbers a little bit. we talked about that before on this program. the truth is that facebook is the greatest threat to youtube and they are sharing revenue, they'll have a content i.d. system. so for people to talk about facebook stealing clips, the entire business of youtube was based off copyright violation, lazy sunday, we remember that. now you have the rhonda rousey fight, her fight lasted 33
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seconds, you can vine the last seven seconds and get the idea or post it to facebook. people held their phones up and posted the 33-second fight this is the inflection point that happened with youtube. it's hysterical. if one of youtube's greatest stars funded by youtube takes this big of an attack. you can be certain that facebook is really a competitive threat to youtube. now there's a couple of things they're doing that are very aggressive. the first of which is when you post something to your facebook feed, only a small percentage of the users who follow you on facebook see it, right? they call that edge rank, only a certain amount of content gets to the wall. when you put a youtube video gets in, let's call it a third of the people who might see it a quarter of the people who might see it, compared to when you natively upload the video. if the video is on facebook servers, they're showing it to four or five times as many people. that's an aggressive tactic, they're sharing revenue. which is a direct attack on
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youtube's model. and the third one will be, you'll know that this is a real fight, going ton amazing dog fight is when facebook hires agents in los angeles and says hey why don't we give out $500,000 in advances against the revenue share, which you can be certain is coming. when that happens it's going to be an awesome dog fight and facebook can catch up to youtube, it will take five years, but they'll be a viable competitor to youtube. >> once again, content creators win. content creators for the win. >> one more thing. there's an app being, there's noise i'm hearing about facebook making a dedicated video app and that could be a huge game-changer, so yahoo created screen, buttia doesn't have a big mobile base, if facebook release as dedicated video app, that's huge. >> jason, great stuff as always, we'll see you next time. jason calacanis. >> see you tuesday. when we come back, taylor
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swift applauding apple music, taking a dig at spotify in the new "vanity fair" profile. the author joins us at post 9. rick santelli, what are you watching? >> we're going to have to talk more about china. remember a point this time in history where we worry about japan taking over the financial community? then it became china, things have changed. today we're going to talk about china in the context of an old story with a new twist, the tortoise and the snail.
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resources allocating commodities, these are what markets are all about. think energy here. think about how much pain certain areas are experiencing and how much goodwill other areas are experiencing and if you can't think of that ladder, just think auto sales, you don't think they're fuelled in part by the notion that high profit of larger trucks sell much better when there's lower energy costs, they do. >> our greatest asset is their central planning.
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even though that's true, we're still the tortoise and they are the snail. the over compensation whether it was after the '29 crash or in the '30s, we over-compensate, we over-regulate, we exaggerate almost everything and then the pendulum has to find a new balance. which i think is going on now as we speak. it isn't only citadel, bmw, hyundai experiencing issues with the epicenter of activity in china and let's not forget the wild moves we see in gold and commodities that were used as collateral for loans that do things for bridges to nowhere. even though we've overcompensated what gets underscored in china is a dynamic, japan went through decades of stagnation, the notion they were going to be the reserve currency. they were going to liberalize
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their markets. in the end, liberalize markets doing the things they're doing. it's anti-liberalization, it's anti-liquidity. so in the end, maybe technology moved too fast for china to develop in a more normal fashion, no matter how you slice it if we want free markets we need to speed up our pace, but thank god the rest of the world we compete with is even slower back to you. when we come back, taylor swift praising apple, taking a swing at spotify and this month's vani"vanity fair." shopping online... ...is as easy as it gets. wouldn't it be great if hiring plumbers, carpenters and even piano tuners... were just as simple? thanks to angie's list, now it is.
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together, we're building a better california. taylor swift gracing the cover of "vanity fair," saying apple treated me like i was a voice in the creative community that they cared about and i find it ironic that they reacted to criticism with hume ill and a start-up with no cash flow responded to criticism like a corporation. joining us is the writer of the article in "vanity fair." she talks about this at length. >> when i enter vooed her in
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london it was a week after she had posted the letter. we got to talk about it and the reaction she started to get from apple and comparison it how spotify had treated her. >> she gets her friends to show her their contracts, right? and that starts the ball rolling. >> she said a few of her friends texted her screen shots of the contracts they got. and it bothered her. she has a lot of friends in the music industry. she said this doesn't seem right at all. she said she was up at 4:00 a.m. like that she approaches writing a song. she wakes up and can't think about anything other than writing the song and it was the same way with the letter. >> this is a savvy piece of business prose that she wrote it seems thoroughly considered. even the quote. she's talking about start-ups and cash flow. clearly if she was sitting there saying that to you, it wasn't ghost written. do you think she's sha savvy a
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business woman all on her own, advisers aside, during the time you had with her? >> i felt like the letter could have workshopped by a team of 100 but she said she only showed it to her mom. i believe her and i feel like she was exactly we were talking about this stuff and she had all of these thoughts in her head about the way she had been treated by these companies. so it did feel very much like this is something she spends a lot of time thinking about and she's going to worry she's going to come off as a complainer after she had come out against spotify. shoe knee there were risks involved. >> it doesn't sound like my first reaction when we did the story and the letter came out is it had to have been lawyered before it went out. it sounds like it was mom and then -- >> no, no one else saw it other than her mom. you would think that other people would have been involved but according to her, just her
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mom. >> a make a good point that she has a life within this crazy machinery but what do you make of her business management? some people have said she's probably assembled the best music management in one of them and one of them in the best in the history of music. >> she calls herself an indie arnettist because she says she's an independent label. she owns her own masters. she has control over what happens to her stuff. she said other artists wouldn't have been able to do what she did with spotify. take all their songs away. she's given a lot of autonomy that a lot of other artists can't because these at this independent label. she made sure that other independent labels were okay with it. >> what did you make of her mention of jay-z and kanye in her piece, saying that they brokered the piece. jay-z's got his own streaming
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service, title,s did that come up? what was your take on that? >> we didn't talk about title. she did talk about jay-z he was the instigator for kanye and she coming together as friends. we didn't talk about title. i know jay-z is a big service. >> it's everybody should read it. i'm sure everybody will. josh, thank you for coming in. josh dubois joining us from "vanity fair."
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disney shares hitting another all-time high ahead of earnings this afternoon. julia boorstin is back in l.a. and joins us with more. >> disney is the fastest growing stock in the dow this year. it's expected to grow revenues 6% to $13.23 billion. while earnings are expected to grow to $1.42 a share. a couple of key areas to watch, disney media networks. squeeze margins on the heels of eiger saying that on cnbc ritz
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inevitable that espn will sell a service directly to consumers we can expect a lot of questions of what to expect from the over-the-top service. the studio is expected to profit from the success of the avengers syndication. it could take a writedown on "tomorrowland"'s disappointing performance. and third, shanghai disney resort. an official launch date. and listening for details on "star wars." an analyst raised price target on projections that the movie will gross around $2.2 billion globally. carl as you know, everyone is excited for that at the end of the year. people say it could be the biggest movie ever. >> december 18th. i won't be at work, you can count on that. eiger was on "squawk box" a
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couple of weeks ago and said he had seen a rough cut of the stash wars film and said i can't wait for the world to see it. >> that stock was at $50 three years ago. >> that does it on "squawk alley," let's get back to the gang at the half at post 9. ♪ ♪ welcome to the "halftime report" live from post 9, let's meet the starting lineup. joe terranova is here along with stephanie link, pete najarian and michael block of rhino trading partners will be along. our game plan, the apple trade, why is america's most loved stock suddenly getting slapped? and what does the selloff mean to your money? retail reality, the names industry guru dana tellcy says to buy and sell. a flood of earnings we begin with a stunning new market call by the legendary ve

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