tv Bloomberg West Bloomberg May 19, 2014 11:00pm-12:01am EDT
>> live from pier 3 in san francisco, welcome to "bloomberg west," where we cover the global future business. at&t has struck a deal to buy directv for ward $8 million. we look back at how the social network has changed including its hermetic comeback in mobile and what is to come in the next few years.
the eu court decision requiring search engines to remove links is already having an impact. privacy officials from across europe will meet next month on how they can enforce the ruling. google's youtube is looking to acquire a video stream service called twitch for $1 billion. allows users to watch a video gameplay.
twitch already accounts for a high volume of u.s. internet traffic. at&t is hoping to become a bigger player in the video business, hoping to acquire directv. his statement, at&t says this is a unique opportunity that redefines the video entertainment industry. mobile devices, tvs, laptops, and even airplanes. they expect to close within a year.
it is far from a done deal. what are the most significant implications of this? there's not a lot of obvious business needs for at&t. impact fornificant the satellite tv business. this could put directv in a very different place. more andstruggled even hasn't added users much at all. it has a significant impact on the satellite tv business. there is the outline question of bandwidth at what ownership might be repurposed. if we look a lot of the deals that are anywhere near the wireless sector, we have to understand that there is a coming shortage of bandwidth. ofif there are not a lot
businesses, why is at&t bothering to do this? >> that is the real question. failed toephenson has build out at&t. i look on this as a hail mary. there is not a lot of strategic sense. the two companies don't mesh together. cash flow adst directv right now, less than 3 billion a year, and it will not do much to secure the dividends or provide with -- them with the capital to buy new bandwidth. model ofbout the changing the business?
at&t seems to wants to move in that direction. they are at least trying. it is an interesting time where these companies are trying to figure out a new world and new ways people consume media. it is really changing the way these companies have built their business. it changes their ability to navigate when the world is changing around them. put this into context in terms of the bigger picture. timest is trying to buy warner. sprint is making a bid for t-mobile. at&t failing to buy t-mobile. what is the bigger picture here? how is it evolving? isin the case of video, it
trembling and quaking underneath the major providers. paid tv is basically a legacy business. it is tv by appointment. of sense anda lot what at&t is doing. this gives us more leverage with content providers -- well that is not going to happen because the business has fragmented so much that it is not the same business it was five years ago. >> should we, as consumers, be worried about the paid tv business being controlled by fewer parties? it has been rumored for a few days -- the customer service
lack of appreciation for both at&t and directv -- as well as ie price going up higher, think that is a real concern for consumers. the businesses spend so much to do these acquisitions, but they will also face less competition. i wonder, you have watched these -- what is going on at the fcc that the companies think they can get the deals through? the fcc is wrestling with time warner and comcast. resistancelot more at a regulatory level than , toody, especially comcast
fare well. at&t-directv will go over well. they are not shrinking competition. the fcc has no policy right now -- they are without any direction. iny are 10 years behind terms of technology that is driving it. at&t made a big announcement last week before they announced directv. they said we are plunging in a tiny way into the cloud. it is going to cost them. $68 billion --be why wouldn't they put that kind of capital to work and wireless and be the dominant player? >> interesting. >> managing partner at media
>> welcome back to "bloomberg west." streaming on your phone, tablet, bloomberg.com, apple tv, and amazon fire tv. this is the second anniversary of the facebook ipo. that's tumultuous first day of trading was the beginning of several ups and downs for the social network. may 18, 2000 12, facebook makes its debut on the public markets. it is a rocky first today will stop. less than four months later, the
share price plummeted, hitting an all-time low. then in october, a milestone. the social network hits one billion users. --shiftsshifted smoke its focus to mobile. snapchat seo makes a $3 billion offer disappear. one year into public life, facebook unveils ann app. facebook hits a homerun in mobile ads. mobile ad revenue soars from billion by 2014. billion on whatsapp. billion dollars on oculus. it all adds up to a rebound. shares reach an all-time high
just in time to celebrate mark zuckerberg's 30th birthday and the end of facebook's second-year in the public eye. for more on facebook's two-year anniversary, i will bring in a special roundtable. here with me in san francisco is the managing director on facebook. and former facebook partition manager. l.a., chris dewolfe, ceo of the social gaming network. you worked with facebook at 40 years. has anything that has happened in the last two years of surprised you? what has surprised you most? >> the company has changed a lot. there was only about 40 million users. now it is over a billion.
as a publicly traded company, there are things we didn't prepare for that investors look for. >> it was rocky along the way. you think it is still moving. >> the biggest thing they had to solve for was mobile. once they showed big to generate and -- revenue off that grow the user interface and engagement, the stock took care of itself. it is still early. i understand you and mark zuckerberg have been friends since very early on. think that zuckerberg has done right? >> he has done a lot of things right. earlylly anticipated very
the rapid flight from the web to mobile. more than anyone else, he is translated that into increased revenue for the company. importantly, he's done it in such a way that it has not hurt the user experience. facebook's appetite to make large acquisition to prepare them for the future. >> when it comes to how far facebook has come, what do you see at the biggest strength and biggest warning sign? way to operate they handle mergers and acquisitions. not just the way they architect their servers, but the way the company uses acquisitions and
build an ad network using the facebook logon. getting away those analytical tools. they created a network well beyond facebook. it goes even further to help understand how users are using the web in all sorts of ways and putting ads in front of those users in a contextual way. as a result, facebook is in the drivers seat like no other company with the exception of google to control the way marketing works. >> what about the idea that facebook -- can they stay the staying -- the same cohesive company? that aave already seen lot of these companies will probably run independently. instagram is the best example. it has its own ad sales.
oculus and whatsapp run the same way. money,ow it is paper that it is a lot of money. comparisone a quick with google, and there is one distinction between the two. facebook is had to do three acquisitions. all those in a way defend their core user base. maybe this business is going to require a multibillion-dollar acquisition. google didn't have to do that. there are a lot of acquisitions that facebook is making and they are defensive. flags and facebook's future, more after this quick break. stick around, we will be right back. ♪
>> welcome back to "bloomberg west". i am even. chang.y we have a round table on facebook. facebook has become the dominant social network over the last 10 years. how good are the chances it will remain the dominant social network over the next 10 years it's not go the way of myspace? the chances are really strong that they will maintain their position as the top social network.
i do find that fairly loosely. facebook is the social glue, not only for the web but for all mobile apps in the universe. if you want to maintain your identity on any mobile app, you need to use facebook. i don't see that going away very quickly. they also have by far the best advertising monetization solution. company, development when we go out and buy advertising for auburn game, we spent the majority of our money on facebook. users, the more data they get, the more effective their advertising becomes. i don't see them going anywhere. >> what about the cool factor? some kids don't think facebook is cool anymore. >> i think it is a bit overblown.
concertcently at a watching old people use their usees -- a lot of people twitter, but after that it will be instagram, facebook. it is a multifaceted problem -- product. they don't integrate. >> it is the same set of products. zuckerberg used the expression that he wants to be utility, he thinks it is a utility. i am a huge believer in that. that is an extremely powerful position to be in. it is hard to be cool all the time, i would much rather be a utility. >> what do you see as facebook's
biggest challenge over the next 10 years? has been a great discussion about that, particularly in the quarterly earnings call. certain point, they will run out of users, but they can't get into china. we may have seen the greatest days of user growth, but adding -- that is what facebook recognizes as the real leverage of the business. > we talked about what -- whatsapp and instagram. can you make sense of this? >> the real key from that acquisition was in their 10th anniversary note. what are the things they are paying attention to is how one
third of the people on earth don't have internet access. one of them was about new experiences that connect people. the one they haven't talked is how people want to query their networks to solve complex problems. google is trying to do that, too. thank you all. we will be watching the next 10 years of facebook and we will be right back. ♪ >> time now for bloomberg television on the markets. monday withrose on shares resuming advances after
>> you are watching "bloomberg west", where recover innovation, technology, in the future of business. ime though. chang. emily our white house correspondent phil mattingly. this is a huge step for the justice department. why this, why now? >> a huge step is right. both government officials, journalists and analysts were taken aback by the announcement of the charges against these individuals. the justice department has been working on cases related to these types of issues for more than a year. they have been ringing in
resources from the fbi and u.s. attorney's offices. throughout this time officials behind closed doors and publicly have been pointing out that this is a major problem. on some level it looks like u.s. officials have lost patience. it was time to take action. the nature of these charges, how groundbreaking the word were underlined in a press conference. >> this should serve as a wake-up call. these criminal charges represent a ground reeking step forward in addressing that threat. >> as you say the attorney general not trying to mince words about how important this is. something notable. law enforcement officials say that this is something we will see more of going forward. >> are these individuals if the jury finds him guilty ever going to see the inside of the u.s. jail or is this more symbolic?
>> it is unlikely that they would set foot in the u.s., let alone see the inside of a jail. very symbolic. what you heard was the top line point that you would expect. we hope the chinese government would cooperate and that these individuals would end up in the u.s. the foreign minister not mincing words seeing these charges are ridiculous. asking the u.s. to correct what they have done. there is little chance you will see these individuals come over. the point has been made. if you needed a stronger instance of the u.s. taking this seriously and becoming frustrated. this is the example right here. >> thanks so much. these chinese hackers stole sensitive information from six american companies.
how can companies actively curb this economic espionage? cory johnson is back with us from new york. and lord volante is joining us. only imagine the back-and-forth that is going on behind the scenes between u.s. government officials on whether to officially file these charges. what do you make of the public indictment? we were there with a lot of eagerness like everyone else. what stood out to us is that this is exactly the type of data theft we have been seeing in the front lines for years. 2009, large-scale data theft enabled stuff like this. >> the former head of the nsa called this the greatest transfer of wealth in history. what has been stolen from the united states by the chinese?
give us an idea of what has been stolen. what companies are they targeting? the indictment took place in pennsylvania. some of the biggest and most interesting companies -- we are not thinking about westinghouse. these are the companies that were mentioned in the indictment. it shows the degree to which the chinese government is seeking information on how our government works. they want to replicate all of it. what sort of impact the revelation of these actually had. i understand there was another report on u.s. and china hacking u.s. companies. what was the actual impacts of that report? >> we traced the impact of our disclosure. it was a report that laid out the details behind what we
believed to be widespread economic espionage coming from a ainese military unit against variety of different companies in the u.s. economy. this the disclosure of report, we saw a lot of very public denials from the chinese government about this not being something they engaged in, then later as we were tracking the --up, we saw was referred to when they did come back up and start continuing their operations, we sought that their infrastructure had changed. accusations and denials, behind the curtains we saw different story. reflectuch does this weak security measures implemented by these u.s. companies, as opposed to a determination by chinese hackers
to get the information at any cost? >> one of the things we have been saying for years is that perfect to dissent isn't reality. the way many of these attacks comes to anyone at that company, once a person clicked on the link, the group has the ability to get into the network and take the crown jewels. it is that simple. isle network defense crucial, it is also about awareness and educating your employees to not click on suspicious links. >> is it realistic of the united to tello think that -- the chinese economic espionage is ok. economic spying for the benefit of your company is not ok, though. of the nsa saying this is the biggest theft, when of course the nsa has been accused of gathering information
with questionable legality. it is a moving target. what we see is the foundation of our security. theow would you compare capability of chinese hackers to the capability of u.s. hackers? are they more advanced or just breaking the rules that the u.s. believes are in place? it is characterized by volume. we will see multiple engagements with different clients occurring from the same group. this isn't just a one-off threat, this is widespread against a variety of industries. galante, senior threat analyst. cory johnson, our editor at large. still ahead, jill abramson speaks out since her exit from the new york times. you can watch us on your phone, your tablet, bloomberg.com, apple tv, and amazon fire tv. ♪
>> jill abramson addressed her exit from the newspaper during a commencement address this morning. take a listen. >> losing a job you love hurts but the work i revered is what makes our democracy so resilient. this is the work i will remain very much a part of. >> what it could mean for other senior level executives. we are joined by our guest. in cory johnson with, with us from new york. what are your thoughts on this firing?
>> it is a fascinating story. it boils down to the crux of was she fired for something that a man would have gotten away with or not and i do not think we have all those details yet but a lot more will emerge in the coming weeks. >> she had issues with arbitrary decision-making, failure to bring colleagues with her, in adequate to medication with the public. some say if she were a man with those issues she would not have been fired. >> there is this word pushy that has been bantered about. >> which her own daughter uses. >> the question is, is was she a good thing or a bad thing, is it tough in a mad dash in a man and not a good thing and a woman and if that is the case there is definitely something sexist at
play. if she was fired for performance that a man would have been fired for things that a man would have she should have been fired. >> you are in new york today and everybody there is talking about this. >> the performance of the paper under her was solid. the new york times is a terrific news organization. what goes on behind the scenes in the making of news can involve a lot of nuance and it is a difficult process. you can see her love of the paper. the piece retelling the story of her injury getting hit or run over by a truck and recovery from that and how that is the fate of so many people in new york was an interesting piece. it did not feel like it sat well and i wonder if that was the direction she wanted more of the paper to go in. it was a personal peace and felt like it belonged in the new yorker and i wonder if that was
heard direction that did not jive with the editors. >> what about this issue of equal pay, reports that she was not getting paid as much as her predecessor. reports are not true, does it matter? >> it absolutely matters. the question is who is on the right side with this. there is base salary and pensions, the times has cut pensions recently. there is stock compensation. it is in everyone's best interest for as much of this information to come out as possible. was paid a central part or was this a red herring that was covering up other things that were important? >> are women hate as equally as men, they are paid $.70 on the dollar. >> we do not have the sensation data for a lot of the companies we work with. they are increasingly focused on
how to be billed a more diverse workforce and how'd do they train, recruit to my development junior people to become leaders in their organizations so i think it is endemic to companies that they have not done enough to recruit a diverse workforce and that is something we help a lot of folks with. >> how does this impact the brand? >> i do not know that it doesn't -- does at all. it is a dominant brand for journalism. this is a big newsroom for -- putting out that report every day. the shakeup, the last editor had a difficult 10 year particularly at the end so this is not the first time we have seen the new york times run into management. it is important to note that some of the financial struggles are happening while all of this is going on. that weighed heavily in the decision and the urgency. they know that the days of the times being dropped on doorsteps
is gone and they need to embrace digital. >> what about recruiting and retention? how have employees received this? >> this will be telling to see what happens in the coming weeks and months because the question is was jill treated differently because she was a woman? you might see some high-profile partners and it might be tougher for the times to recruit up-and-coming female executives. if she was fired for performance reasons, honestly they did the right thing and a lot of the women who work there will respect that. they will respect that jill was not treated differently because she was a woman. when in the profession, that is what they want, they want to be seen as equals and want to be treated on the same level as their male counterparts. >> i want that, too. thanks so much. we will be right back with more after this quick break. ♪
>> welcome back. the u.s. is turning to technology to help keep soldiers healthy. the army has teamed up with share care to develop the army fit program. it is an online tool that has been used by more than 300,000 soldiers. cory johnson sat down with dr. dan johnson and the ceo of sharecare. he started by asking how army fit works. >> army fit platform is a new program that launched in january and the purpose of the platform is to house what we consider one of the best self-assessment tools around your total health and fitness. >> the army has been at this for a while like hundreds of years. what is new about this? >> what is new is that we
enhanced the global assessment tool to be truly comprehensive, to represent the physical, emotional, social, family, and spiritual and with the tools that our contractors have brought to the table is to make it engaging and make the resources tied to your assessment and make it personal. and make it so that we can reach our soldiers with important health and fitness and wellness topics and information throughout the year and make it a comprehensive strategy that involves everything from e-mail to social connectivity to applications to activity monitors. >> you guys, it seems like that is the key. not to get someone to log into a site once a year but we should check in on your physical health, it is good to our insurance costs. >> this is the world we're living in. we think patient engagement will
be the key and how do we not become a disease management company, by taking social and mobile technologies and inspiring digital caregiving so that dr. johnson or soldiers and family members can be their own webmd. >> talk to me about the role of fit soldiers in a lifestyle. >> that is a great point. what we are learning is that to really -- we have to understand what is fitness and historically the army has taken somewhat of a segmented or myopic approach. what we realize is to be ready and resilient for whatever comes the way of a soldier whether it is a movement to another station or a war in another part of the world, you have to focus
comprehensively on their fitness. >> talk to me about that self-assessment, how it happens. >> it is a noble assessment tool -- global assessment tool and an annual requirement to do and it is voluntary and offered to the family members and the department of the army civilians. >> it sounds like paperwork to me. tell me i am wrong. >> it used to be a check the box and go in and to questions and get some barred graphs and we did not hear from them until they had to take it again. >> we have gone from 42 seconds average per visit on the last website to about 24 minutes . it's going into a commercial world where sharecare lives. how do get the soldiers engaged and so we have built on this skyscraper that is engaging soldiers and family members. we have 2000 soldiers take the real
age test. we have had 300,000 take the real age test. >> i have seen these things. >> these used to be blond. they called them want. -- them blond. what is the big difference if i were to look at the competitor. >> think about sharecare as a skyscraper for health and wellness. you take the real age test and get on board onto a safe social life or more we deliver content from everyone from the cdc to dr. oz. we are doing fun stuff with the devices. >> this has helped me with fitness quite a bit. >> the idea, today was a cardio day. your phone would wake up and say
i see that you are in san francisco. i have looked at the weather and i have gone into your account and i will play you music were you get your best times and when you finish i will give you a micro-payment of today's on your real age. >> that was dr. dan johnson and the ceo with cory johnson who was in san francisco at the time and is in new york. who is here in san francisco but matt miller. a very special guest. why are you here? >> i am racing around a private racetrack at napa. i thought i would drop by the office and say hello. >> he is getting awfully comfortable, cory. >> i feel like i belong here. >> i am enjoying it. you have the byte. >> 1.4%. the amount of internet usage on
the web that this company twitchtv is occupying. some of the top users of bandwidth, it is up there near the usage of facebook or amazon video. more than hbo go. there are reports that google is looking at this company. >> i am not a gamer. >> mac is. -- matt is. >> i spend a lot of time playing games. twitch can broadcast yourself laying video games or you can watch other people laying video games. >> is it really that cool? >> it is for complete nerds. it is not that cool. as videogames games and movies mesh together more and more, it it is on the fringe for the geek , crew. matt, glad to have you.
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