tv Bloomberg West Bloomberg May 30, 2014 11:00pm-12:01am EDT
>> live from pier 3 in san francisco, welcome to "bloomberg west" where we cover innovation, technology, and the future of business. i am emily chang. ahead this hour, steve ballmer has reached a deal to buy the l.a. clippers for a whopping $2 billion. shattering the record for an nba team. the sterling trust agreed to sell after owner, donald sterling, was banned from the nba after making racist comments. ballmer has vowed to keep the team in l.a. elon musk showed off the capsule saying it should be ready in two
years. it is reusable and it will have legs allow you to land anywhere on earth. nintendo is hoping a partnership can help it with slumping sales. they launched their mario kart and players will be able to drive a mercedes for the first time. the mario character appears in a mercedes commercial in japan as nintendo tries to make more money. to our lead story of the day. steve ballmer is going to have something new to get excited about in retirement. the former microsoft ceo known for his emotional speeches, jumping up and down, has reached a deal to buy the l.a. clippers for $2 billion and that shatters the record for an nba team. the previous high was $550 million paid for the bucs. ballmer said i love basketball
and will ensure that they win big. ballmer signed the agreement when the sterling trust moved to sell after donald sterling was banned for life for making racist remarks. the big question has ballmer overpaid? jon erlichman is in l.a. and former president of the golden state warriors, thank you for joining us. first of all, what kind of owner will he be? >> i cannot wait to see the clippers play the mavericks. to see cuban outjump ballmer on the front row. that is what this is all about. these are people who have billions of dollars who want to sit on the front row.
he bought a ticket for 2 billion dollars. >> he promised to keep them in l.a. do you believe him? he lives in seattle. >> definitely. i think financially it would make no sense at all for him to even try to attempt to move the team and that has a lot to do with the financial power behind having a team in los angeles with a tv rights deal that is expiring after the 2015-2016 season. we saw when the dodgers were acquired for a huge price tag and they were able to turn around and cut a huge deal and a channel where there is a huge opportunity to make money and that is how you ultimately get to the $2 billion price tagged. >> larry ellison trying to buy the team. >> he is 0-4. >> what do you make of more tech people trying to get in? >> i do not think it has anything to do micro but this about macro.
i totally agree. you are buying the l.a. market. this is an incredible move forward. this is speed dating in franchise. i spoke to a sports bank investment and said he has never seen anything like this. donald sterling goes off the deep end in two or three weeks later it is done for $2 billion. talk about an asset appreciation. sterling, 9100%. when is steve ballmer going to realize -- >> you do not think it is worth it? >> it is like art. he is a member of an exclusive club. >> can we point out the irony that donald sterling probably made more in this deal than he would've had these marks not been made public? >> and he just said it. it happened so quickly. people have to do get their bids in quickly.
that means a higher price. i would entirely agree that he got more as a result assuming everything goes down this road if he had otherwise. not to say that steve ballmer is overpaying because, as i mentioned earlier, when this new tv rights deal is worked out, all of a sudden we might say, hey, it is introduced -- interesting. the clippers have massive cash flow. >> do you think they could take on the lakers? >> i think they have already taken on the lakers. the verticality might be greater. this chapter of dunk dynasties - >> what you mean about verticality? >> everybody in lima my land is talk about the clippers. -- everybody in la la land is talking about the clippers.
dunk dynasty is spectacular. there may be more to come. yesterday, apple, or the day before, bought beats by dr. dre for $3 billion. we go all crazy about $2 billion for the clippers. a headphone company, 3 billion dollars. >> what are fans feeling like on the ground? are they more excited than ever? can they can challenge the lakers' supremacy? >> no, they cannot. people are excited. the first question people asking is would he live here? steve suggests that he would spend more time here. to answer your point, the cuban/ballmer games are the ones to watch. >> andy dolich, former president of the golden state warriors. thanks so much. coming up with facebook and google with back-to-back
>> welcome back to "bloomberg west." i am emily chang. google is taking steps to comply with a european decision to remove certain links. they set up this form to fill out with a link they want removed. they set up a committee of experts. with us now, ben ling, a former director. he joined a year ago and has
invested in over 80 companies to date. thank you for joining us. i want to ask about this right to be forgotten that is happening in the eu. links to articles about you and me make up the backbone of google's business. do you think it will hurt them? >> they have always taken privacy seriously. >> you moved from facebook to google which is almost the reverse of what most people do. >> i was at google first and went back to google after that. >> why? >> youtube is a huge destination and at the time it was not to the site it was today. it was a huge opportunity. >> you've been a venture capitalist for a year. where are you placing your bets? >> mostly on the consumer side. data. >> what are the trends that are exciting you?
>> one thing that is obvious to everybody is mobile. one of the things we have seen more and more of our consumers expecting the mobile devices to be the remote control for their life. click on anything and expect it to arrive. companies that are exciting to us is tapingo. this is mobile commerce starting with the universities. starting with food ordering. you and i are in calculus class and we are hungry. i order and and go. we go to our calculus class and i skip the line. i pick up my food and you are waiting. what happens the next day? you use it. it is on large campuses like santa clara, nyu. >> what happens if everybody is using it? >> on average, half of the student body uses it. increased efficiency for
everyone. total revenues goes up. also, the students are extremely happy with this. it is one trend we are seeing. another local commerce we are excited about is the hunt, a search company. it starts with the search. women's fashion. where did you get it? women take photos from pinterest and facebook and instagram and put those photos on. and they say, where can i find this outfit? >> we know khosla. he is famous for his investments theory. he likes to invest in companies that have a high chance of failing. how does your philosophy align with his? >> we like to invest in companies that have good initial traction and the ability to have great success. that is generally our theme. >> having worked at google and
facebook, you are trying to find companies that can disrupt the big companies. is there anything that can disrupt facebook at this time? >> the question is more about innovation generally. when you look at innovation, it it comes from places you least expect. we are looking at companies that are solving a real problem for consumers and solving it well. >> 10 years from now, are facebook and google as dominant as they are now? >> you will see just like microsoft is dominant. google is dominant. facebook is dominant. you have seen new goliaths emerge. >> where do you think they will come from? who is an up-and-coming goliath? >> square. >> square has been facing a lot of challenges lately. >> they have been doing well from a product standpoint.
getting consumers adoption. >> how dominant you think they will be? >> time will tell. >> ben ling, thank you so much for joining us. we'll be watching for those goliaths. the network that brought us "mad men" is bringing us the rise of the pc era. and remember, you can watch us streaming on your tablet, phone, bloomberg.com, apple tv, and amazon fire tv. ♪
carry astronauts into space within 2 years. elon musk showed off the capsule saying it will be able to carry seven people and up to four tons of cargo and will have legs to allow it to land anywhere on earth. here he is in the cockpit. >> we aim for something for the interfaces and overall aesthetics, something very clean and simple. >> musk said space x will deliver astronauts for less than $20 million. it is currently as high as $76 million a piece. amc has had a string of hits with "mad men" and "breaking bad." now their latest drama is
banking on the pc era one year after ibm cornered the pc market in the early 1980's. you have probably seen many commercials for "halt and catch fire." jon erlichman spoke with the creators and asked where the idea came from. >> my father, who moved our family from chicago to dallas, when i was about six weeks old for an opportunity in computers. he started working in system software in the early 1980's. i watched his career evolve from systems software to application software to the internet and then finally to security software and about two weeks after he retired in the mid 2000's, i had graduated from college. his company was acquired by ibm. ibm was a presence in his career life and also our personal lives where it was always nipping on the heels of what everybody else was doing.
>> writers in los angeles looking to do it. chris and i were working together in social media at disney. we were getting interested in technology in our lives whether it pushes us further apart or brings us together. we thought the genesis of the story was 1983 and the rise of the personal computer. and we saw an opportunity to tell people the story they did not know. any time you can do that as a drama, that is a pleasure for us. >> we talk so much about silicon valley and silicon alley and silicon beach. you are focused on silicon prairie. tell us about what was happening at that time. >> silicon prairie deals with the swath of area between dallas and houston and austin. compaq was the first company to
reverse engineering of the ibm pc. they were out of texas. michael dell was building computers in his dorm room. we also have texas instruments. there is speech synthesization technology. you have people like charles, who was a leather maker at first, and then he acquired radio shackand built his own ibm-compatible machine. >> texas was appealing where it was traditional hubs like new york that people came for their second chance, their last chance. in a lot of ways, that is what you are looking for.
people taking redemption to do right. he gave us a modern western. >> in recent years, there've been so many tech themed stories. movies about mark zuckerberg. the modern day silicon valley. how do you think the themes compare to the themes you are exploring in the show? >> i think the themes are similar across the board because it is about humanity's relation with technology. when chris and i came up with the idea, we wanted to tell the story of how do we get to where we are now? there is no going back. technology is completely interwoven into our lives. what does that mean? what does that symbiosis look like? as we look back through history, personal computing became a watershed moment where we can explore that relationship. the flavor is different from another show or another movie, but the parable seems to be the same which is, humanity created the technology, but technology is a reflection of humanity in all of its imperfections.
>> we are becoming increasingly aware of the individuals who made these things and put their personal imprint into the machines. i think we see the great creativity of steve jobs. and the social network show you how mark zuckerberg put some of -- and his demons and his brilliance into the facebook product. in the same way, we wanted to capture the way our heroes, make their problems into the machines they are building even in 1983. >> it sounds like you have gotten approval from people who worked in the business at that time. you have been showing your program to the modern day players in silicon valley. some of the feedback i have heard from people is they are impressed. is that feedback from the people who are the influencers in the
world of technology, is that important to you? >> i think so. i really love that people are responding in that way. people who are working in technology now and are not as familiar with the history are looking at it and feeling like it is plausible, feeling like it is real. in that way, they can appreciate the drama and enjoy the story. >> the work itself has changed, but the dilemma is of the same. can you have a work/life balance? can you iterate something fast enough to get something on the market before something eclipses it? am i a visionary? the challenges on a personal level are kind of timeless. i think we are finding modern audiences can connect. >> chris cantwell and chris rogers, creators of "halt and catch fire," with our jon erlichman. with the massive growth in
chinese social media companies, will censorship end anytime soon? you can watch us streaming on your tablet, phone, bloomberg.com, apple tv, and amazon fire tv. ♪ >> bloomberg is on the markets. we see where stocks finished the day. a new world record. in fact, a universal record for the s&p. a gain of 0.2%. even though consumers' spending fell. men's wearhouse and joseph a. banks are closer to combining. the ftc has finished their probe.
>> you are watching "bloomberg west" where we focus on technology and the future of business. i am emily chang. a check of your top headlines. it appears a class action lawsuit over apple's e-book price fixing will go to trial to determine damages. apple had challenge a decision that in the case, class action status had rejected that. apple is still appealing last year's ruling in which a judge said that they violated. twitter engineering head has stepped down and will move to an advisory role.
frye who will be replaced, is the latest executive to leave following the departure of an product development head. he has made no secret he wants to speed up innovation. facebook's ceo mark zuckerberg and his wife make another major donation to schools. the couple is pledging $120 million to help low income schools in the bay area including east palo alto. they previously donated $100 million to schools in newark. as chinese internet companies go global, how fundamental has the internet become to chinese citizens and how much of a threat is it to the communist party? evan osnos joins us. he is the author of the book, "age of ambition."
you lived in china and saw many of these changes firsthand. one of the most interesting things about this book, you talk about china as contradictions. it is a confusing story and often does not make sense. the government has fostered the internet and at the same time censored it. how has the internet changed chinese society? >> if we think the internet has changed our lives in america, it is that more transformative in china. for somebody living on the hillside, they do not have the technology to feel connected. you go online and you have half of the population online. it has gone up 60% in the last 4 years. people change the way they think about themselves politically and financially and socially. how do you get married? >> they cannot see the whole internet.
they cannot see facebook or twitter. is censorship something you think will end in our lifetime? >> the goal of this book is to put these things face to face. chinese is growing enormously fast but censorship is a fundamental fact. the chinese communist party believes they needed to limit information if they are going to count on political survival. i feel they will mess around with the edges and allow certain topics like pollution to the, a subject to this -- to become a subject to discuss more freely. it is based on information need to be controlled -- i do not expect they will relinquish. >> do you think the internet can challenge the communist party in the longer term? can it bring democracy to china? >> it is probably too much to think it will be a force against the chinese political party. the truth is it has exerted pressure on the government and forced them to respond in a way to public pressure they do not have to. they go online every day and use
it as an intake facility to understand what people care about and the issues. i think in the end, the communist party, see it a threat. they will keep it under close watch. >> what about facebook and twitter? you are visiting those companies while you were here. do you think they will get unblocked in china? what path do they have? >> they do not need advice from me. they recognize that in the future for facebook and twitter is a long game, not a short game. they have been over there a lot. they have seen there is a potential for them to get more chinese businesses advertising. that might be the beginning of a long-term relationship. the chinese government does not see any incentive to change their ban.
>> the chinese counterpart, weibo, they are getting bigger and bigger. are they true equivalents of what we have in the united states? >> they are not. they are a composite of different products. weibo does have elements of facebook in its product. it has been successful. from far away, we misjudge how idiosyncratic chinese tastes are. there is something about weibo which is enormously successful. they are chinese products and responsive to the chinese government. for the foreign internet company, it will be a challenge, it is better to boost and allow domestic competitor than a foreigner. >> do chinese people care? do young people care? what i learned was many students did not care about politics. do they care about censorship? >> they do. that has been evolution that
people who have grown up in an environment in which they can go online and complain about the fact they cannot get a job or complain about local political issues. they find it hard to realize that i cannot complain about the central government. they have acquired the experience of skepticism. they love it. if you are young chinese person today, you have to distinguish yourself by your opinion. that is one of the ways to get a job and get ahead. and it puts them in contradiction with the state. the younger generation is raised with a different set of values than their parents. >> do you think any of these chinese compass like alibaba can it be a truly global company? >> it has global aspirations. what i am interested in is how people see their parameters. alibaba has every attention -- intention of being global.
we learned there are products that work in america that do not translate to other countries. it will take work. >> you speak to so many different people. will it be published in china? >> it will be published in taiwan. >> evan osnos, author of "age of ambition," thank you for joining us. what will camping gear look like in the future? our series, the great outdoors, next. ♪
devices to social media. some of the biggest inventions could play a bigger role in camping and hiking. michelle orr worked with the outdoor product brands to pick the products rei sells in its stores. for a non-camping person like me, what are some of the high-tech products that would make my experience easier? >> i think it is about taking your technology into the outdoors. some of the really cool products available at rei are our bio light stove where you can cook your meal and charge it to your smart phone. the go pro helmet camera is a really great way to share your memory and capture your memories and share them with your friends. those are two examples of the great products we have out there right now.
>> you were pretty instrumental in pushing the go pro to be sold in stores. why is that and how is it sold? >> yeah, rei and go pro have a long-standing relationship dating back to 2005. the go pro camera, the company continues to innovate every year. that is what we love about of. the cameras are super lightweight and more compact than ever. they have great mounts that allow you to mount the camera and capture great experiences. they make it really easy. >> in general, how would you say the technology has changed the way people experience the great outdoors? >> well, it was only a few years ago when we would talk about the fact our customer would disconnect when they got in the
outdoors and that is not the way people do the outdoors anymore. they stay connected in a lot of different ways. one way is wearable technology that allows you to navigate via gps on your hike and track your calorie count, your vertical feet. that is one great way to integrate technology. another really fun way is after you have been outdoors all day and you want to cozy up in your sleeping bag in the tent, there are opportunities to show movies in your tent like entertainment loft, for example. it is making it easier and more fun. >> what is the next go pro and generation of high-tech outdoor gear, equipment? >> it is really about multi functional devices.
everybody is looking for the single device that will do it all. i mentioned the stove that has dual functionality. we can imagine that same stove, you can cook your meals, plug your smartphone in and light up your camp and play music. the proliferation of the multifunctional tool. >> just curios, when you venture out doors, what is your must-have? >> i love to have music around the campsite. it is a great facilitation for fun with your friends. there's a great rock out speaker system. you pair that with a solar powered battery pack and you can listen to music for the entire weekend. that is one of my favorites. a little secret, i bring along my ugg boots. if i get cold, i can put them on. >> good to know.
matt miller was at the world store. did you take a test drive? >> i drove it for hours. the mercedes element is only in japan. nintendo wants to branch out and find new revenue. they will sell the services of their characters. mario in japan with mercedes advertising when he steps on an evil mushroom. they have a mercedes you can use in the game in japan. it is not in the u.s. version and they would not tell me if they have upcoming partnerships here in america. they have a really fun eight version of this old favorite only for the new console. it is a very interesting and adds to the line up of a number of games they have built up so far. >> is it a good strategy?
can mario help save a nintendo? >> it is really a sad story if you look at the profits over the last 5, 6, 7 years. they used to make billions ofdollars a year. they are losing hundreds of millions of dollars a year. you can see a big loss this year. they used to make for a good 10-20 years solid, every year, 30%-40% margin and some years even more. what they are hoping to do is to sell more of the wii console. they sold over 100 million wii. it was so good that people ask why would i bother to get another one. it does a lot more and it may help to boost their stock prices which have come down 15% this year. it is flat. no movement. as far as the shareholders are concerned, this is the great white hope. the one thing they hope will get people to buy the new console.
you cannot play it on your old wii. >> i am not a gamer. mario is even a game i play. >> i was going to say even non-gamers play mario, especially mario kart. my mom will sit down and play it. everybody from the age of 4 to 94 understand and that has been the appeal. since video games were invented, mario is the biggest selling franchise of all time. it is sold almost 500 million copies of some kind of mario game whether super mario world or mario kart. kart has contributed 100 million copies.
it has destroyed pokémon or call of duty as far as the unit sales, nothing comes close to it. that has been the bonus. they have harder games. i played some mario 3-d on nintendo today. i played the new donkey kong. it is really a step forward that a lot of people would be surprised to find for nintendo. if you go in the store, you would be surprised. it is not the type of gamer you shoot and kill people all of the time. maybe safer for the kids. >> and did you enjoy it? >> i lovee playing all kinds of games. i had the most fun playing the donkey kong game. the fun of mario kart is playing against other people. you can play against four people. you can sign up online for their live version and play against 12 other people. you can have really big rallies and that would be the most fun. >> matt miller.
>> i challenge you, jon erlichman, and cory johnson. >> i am going to lose. is it ok if i throw it out? >> you can be the princess. >> thank you. it is time for the bwest byte where we focus on one number that tells a whole lot. what you got? >> based on what matt said, it is 1.7 million. it brings me great pleasure to present you with fun friday bytes. more than 1.7 million views for a youtube video that brings together the opening sequence of "game of thrones," which i know you love, reimagined to your last segment of mario. it is two geek worlds wrapped in one in a slick video. >> oh, my gosh. i love this video. the man behind it actually with us right now via skype from
kansas city. nick, what inspired you to do this? >> oh, my gosh. "game of thrones" because their opening sequence is the best opening intro ever. i love it. i look forward to the intro as much as the show. i was watching it and thought it would be a great video and easy to do and it really was. >> let's take a closer listen with the sound up. >> ok. ♪ >> now, you have a contract with the video entertainment network. did they help you make it go viral? >> no, they said you have a idea and you post it and they help to promote it. they leave it open to the creators to do what ever want. you have a great pass.
the sky is the limit with it. they help you promote it and get the ball rolling. it helps with other websites and blogs and whatnot. >> for people who do not know what it is, it is based here in l.a. and warner bros. is an investor. what is it and what does it help to do? >> it is one of the largest youtube networks. they find people like myself and others who are interested in content. they say if you want to join our network, our youtube channel, we will help promote your video and we will advertise. such as mario kart 8 and the things i would like to advertise anyway. they put you in contact with others to exchange ideas. they are great with helping people interested in the youtube channels start one up and gets more publicity than they could on their own.
>> you are getting a lot of attention. what else are you working on? >> i am thinking, how do i top this? i always make these videos. you have no idea how they will do and how they will react. for this one, people went crazy. "huffington post" and "wired," all of the main sites. and now i am on legitimate sites like bloomberg. you have to subscribe to my channel and pay attention and i am always like what ever i come up with, i will work on. >> i am glad you think we are legitimate. nick joining us and jon erlichman. thank you both and thank you for watching this edition of "bloomberg west." you can get the headlines at the bloomberg radio and tune in on monday where we will be at
>> this week on "political capital" -- nancy pelosi on benghazi and immigration. >> they would test an immigration bill. -- pass an an immigration bill. >> peter roskam on ukraine and the select benghazi committee. obama's big week and margaret carlson and megan mcardle debate guns. we begin the program with the house democratic leader nancy pelosi of california. thank you for being with us. the president accepted the resigna