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tv   Bloomberg West  Bloomberg  March 25, 2015 1:00pm-2:01pm EDT

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cory: live from san francisco and new york city today, welcome to "bloomberg west." i'm matt miller. cory johnson is at facebook's annual developer conference. we will head out to him shortly. first off, i want to get you a check on your top headlines. a major merger in the food business as to iconic american brands coming together -- kinds acquiring craft -- heintz acquiring kraft.
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craft shareholders will receive 49% -- here is the incoming chairman. "bloomberg west>> this combination will generate substantial synergies $1.5 billion and many revenue expansion opportunities domestically and abroad. matt: they will invest $10 billion in the new business. a french official says the audio has been recovered from the black box found at the site of the germanwings crash in the french alps. the case to the second black box was found today, but not its content. press will on says the casing -- francois hollande says the casing was found with nothing in it. they have arrived at the site today.
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the european central bank has increased the cap on emergency funds available for greek banks. it has been raised to just over 71 billion euros. the decision comes after policy makers -- shares of apollo education group plunging today, down the most in four years. the number of students registering for its online courses fell 13% to 28,300 in the second quarter. it cut its revenue forecast for the year. apollo once the for-profit university of phoenix. apple has acquired database company foundation db according to a person familiar with the matter who says the purchase will help apple improve its cloud computing offerings. apple says it buys smaller technology companies from time to time and generally does not discuss its plans. to the lead, facebook's f8
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developers conference is underway in san francisco. mark zuckerberg giving his keynote speech and moments. cory johnson is life outside of f8. what have you learned? what are we expecting? cory: what we might expect mark zuckerberg talk about are some themes that are specific to this developer community but maybe tie in the bigger things we have heard out of facebook in the last few quarters. especially around ads, video ads and the ways these developers might incorporate facebook's new tools in advertising and running video ads so they can take some of that cash and use the latest tools facebook has an ways to track which ads are working across multiple devices. these are vexing technological problems and there is a lot of money associated with it.
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if you look at the revenue from advertising well over 90% of the revenue base and it's growing at a massive pace. the idea that developers will they create new apps or stay within facebook while their app runs that is the kind of thing mark zuckerberg will talk about because they realize they will not all work at facebook but he can tap into many of them if he can inspire the developers here at the f8 conference that appeared matt -- conference today. matt: is it right in assuming that his end goal is to have everything happening on facebook? so that facebook replaces the internet? cory: great question. i have never gotten a straight answer out of facebook about it. it's a dumbbell approach.
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they want everyone to go to facebook and stay on facebook and do everything they can on facebook. if that is not going to happen they want everyone to go to a facebook app, whether it's messenger or instagram or whatsapp. they want to make sure wherever you are come you were on a facebook property. one of the things to listen for today will be development around those apps. are they going to allow developers to write for those platforms? allowing payments between users of facebook messenger. is that the kind of thing that will open up to other developers to offer other services? looking at this other platforms. matt: it's exciting to hear from his perspective that the new york times, national geographic,
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buzz feed may operate within the bounds of facebook. what other things do you think you would like to see inside facebook? cory: it's interesting the way he seems to think of his company as a media copy. people consume information. -- as a media company. thinking about something, calling it the new speed. -- news feed. i think that's an important developed for the company because it signals a direction in the way they think about things is a place people congregate to share experiences. that's an interesting development and the notion that some of these pure media companies like new york times and so on might actually be thinking about ways to present that on facebook but not
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wanting them to leave that facebook site to get it. matt: mark zuckerberg is stepping up to speak. is he taking the podium? let's listen in. mark zuckerberg: there are now hundreds of thousands of developers building on facebook's tools including more than half outside the u.s. more than 30 million apps and sites have been built using facebook's tools. last year, we drove more than 3.5 billion cap installs -- app installs. people shared 50 billion pieces of content on facebook. we have paid out more than $8 billion to developers in the last five -- last five years. 90% of apps are integrated with facebook. because of all the apps and services you were a that you
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were all building, the facebook ecosystem is stronger than ever. i want to thank you for being a part of our community. you are the ones connecting the world and we are proud to serve you. [applause] today, i want to talk about how our community is going to continue making progress. i want to start with the two major themes we introduced at last year's f8. the first theme is stability. to help you build, grow and monetize your apps, you need to be able to rely on our platform. last year, we committed to making our platform really stable. we even changed our mantra. we recognized when you are operating at scale, stability is how you move quickly. we introduced it to your stability guarantee.
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we committed to fixing all major bugs in 48 hours and i proud to say that we did these things. we had an internal goal to reduce the number of bugs in the system by more than 66% and we did that. this year, we want to go even further. we are making a new commitment to fix more than 90% of the small bugsy report within 30 days -- bugs in you report within 30 days. we are introducing a bug dashboard. when you submit a bug, you will know when you can expect to get it fixed. we are continuing to build on this important theme of stability for our community. let's talk about our next theme. in all of our products and our platform, we want to make sure we always put people first. we are all to serve the people using our products.
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we need to make sure we always put them first by making sure we keep everyone safe, giving people more control over their experiences. when people feel good about their privacy and their security , that's when they are open to trying new experiences like all the apps you all are building. here's how we are approaching this. with facebook login our aim is to get people complete control over the information they share with apps. facebook login continues to be the most popular way people want to log into apps. more than 80% of the top 100 apps use facebook login. last year, we introduced a new facebook login that gives people more control over the information there sharing with apps. we created a simple review process to make sure that developers are not asking for more permission than they really need. since making this change, apps are now requesting 50% fewer
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permissions none they were before and are seeing more than 10% increases in the rate of people logging in. over the next month more apps will migrate to the new login. we think these changes are going to make people feel a lot more comfortable and make the ecosystem a lot healthier overall. another effort we are focused on is helping developers protect people's security. last month, we announced a new platform that allows companies to exchange information about malware and cyberattacks. malware is getting more sophisticated. it is increasingly challenging for anyone, anywhere developer to keep up with the different -- mark zuckerberg speaking from the f8 developers conference talking to the developers. we will continue to follow this for you and have much more coverage from san francisco
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throughout the hour. "bloomberg west" will be right back. ♪
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matt: this is "bloomberg west." coming up, how important are developers? amazon tells the faa thanks, but no thanks on its latest drone permit. those stories and more in this hour. first off, here are some top headlines. the president of yemen has fled the country as a shiite rebels advance. he left his palace via boat selling off into the gulf. this comes after his defense minister was arrested by the rebels who just captured a key airbase in southern yemen. the fbi needs to urgently update its intelligence gathering capabilities at home and abroad. that is the conclusion of the new report ordered by congress. the review found the fbi has fallen behind the curve when it
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comes to keeping tabs on cyber criminals, foreign fighters and extremists. in new home sales -- new home sales rose in february, hitting a seven-year high. the ceo of homebuilder -- >> overall, it's a very positive trend. everyone is excited about one month's data. the data gets revised. what is accurate is the trend has been very positive. it is picking up steam, it is the springtime and that is the big housing market time. matt: the first time new home sales have top 5000 for two straight months since 2008. mark zuckerberg is on stage speaking to over 2500 developers in san francisco. cory johnson is live outside the event.
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cory: lots of interesting things going on inside. to understand what goes on inside facebook let's gather together some former facebookers who ought to know. the chief technology officer at facebook and -- i know you work a lot on mobile. when facebook looks at mobile you see these other apps popping up. when i look at this, i cannot figure it out -- do they wanted to all go to facebook notre dame -- or do they imagine a lot of apps? "bloomberg west it is a -- >> it is a dual pronged strategy. facebook is always realized that not everybody will use facebook all the time and they want to be part of any apps doing anything on mobile that can help
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developers build or monetize or grow. cory: when facebook looks at the big picture of technology they think their fundamental strength is advertising? >> no, i think it is a consumer products company coming media company fundamentally. the reason they have a strong advertising platform is because they reached summit people. -- so many people. it is driven by a really, really popular consumer product. cory: it is focused on media first, the ads will come later. >> you have to do that. if you look at yahoo! the advertising dollars follow a large audience. cory: i wonder if you see the acquisitions of facebook as it relates to advertising as a way to maybe create more of a mode around that -- even though they
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cannot keep users the revenue component of that, the machinery of revenue will be part of facebook the same way it is at google. >> facebook wants to be where people are, spending time on mobile. people are sending messages and sharing photos. cory: let's focus on -- there is an interesting development around media. may be partnering with the new york times and national geographic and buzz feed and so on. what do you think of it? >> it was interesting. the growth of mobile has changed facebook's platform landscape quite a bit. in the early days of the new speed was the sole source of distribution for a huge number of developers. since then, the gravity has shifted to apple and android providing distribution for a lot of developers. they are trained to reclaim that.
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there's rumors that they will launch a new platform with their messaging products. they are trying to develop that depth with developers they have lost with the growth in mobile app stores. cory: i want to talk about what developers -- how they think they will make money by working with facebook. stay with us. we will be right back talking more about facebook and how facebook is bringing money to the rest of the world.
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matt: welcome back to -- cory: welcome back to "bloomberg west ." we are at the f8 conference. i'm joined by the ceo of quip carl of shadow puppet.
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mark zuckerberg is talking about facebook messenger, now 600 million users. talking about it as a platform. what does that mean? >> you can imagine a bunch of interactions around that. they announced payments a few weeks of. figuring out where to go when i'm meeting up with a friend i can send stickers or other content to them. it will be interesting to see what direction they take it. cory: more than a mode cards or sending a location, i wonder if there's payments, put sharing annotations, things like that. >> think of all the services related to the conversations you're having with your friends. planning a movie or a vacation finding a place to me. cory: they are able to share revenue somehow? >> that's how it works in china
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where this is already popular. there is a large company called tencent. a lot of people anticipated this because it has been so successful for tencent. the revenue sharing is hard but the fundamental value developers are getting from facebook's distribution. -- is distribution. they are reaching 600 million people. that is a lot more than most of these developers. cory: more than twitter. you make an app that has become one of my favorite apps. i wonder, they are finding ways for apps to communicate with other apps through facebook. do you want to use -- turn over the keys to your kingdom to facebook? >> if it is done in elegant way, developers will embrace it because interoperability is
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pretty bad right now. in the age of the internet, you click a hyperlink in a page will load. now, you have to go to the app store and type in your password and 20 minutes later you will give up. the larger technology companies like facebook are trying to lead the charge on that aired part of it is all true a stick. -- all true atruistic. cory: when you look at this, you have a nap as well, one of the biggest revenue sources for facebook as been people clicking on apps to find new apps. do you want the other apps to know where you are and what success you are having? >> in this crowded mobile landscape right now, getting the word out about your app is one of the biggest challenges for a startup. we have been at for schools -- an app for schools.
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cory: thank you very much. lots more from the f8 conference when bloomberg west continues. ♪
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matt: you are watching "bloomberg west." i'm matt miller. this check on bloomberg's top headlines. the leaders of germany, france and spain arrived at the site of the germanwings crash today. they thanked those in the recovery efforts. french helicopters and 600 officials are searching for bodies and the wreckage in remote regions french alps. investigators are probing the black box, looking for clues as to why the plane went into its steep descent. the leader of afghanistan th
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anked the obama administration for its support. >> it was illegal to educate girls. today, more than 3 million girls in primary schools across the country are learning to openly and actively participate in the future of the democratic afghanistan. [applause] matt: yesterday, president obama said the u.s. will maintain its current troop level in afghanistan through the end of the year. he was planning on cutting that forced nearly in half. the oil glut keeps getting bigger as the amount of crude stored in the west set another record after -- the amount of oil pumped into the u.s. rose, too. the united auto workers union wants to eliminate the difference in pay between senior workers and new were hires. the group opposes a lower paid
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group. ford and gm are asking for a lower tier of union workers in their factories. negotiations don't officially begin until july. a discrimination lawsuit by a former ups driver may be headed back to court after the u.s. supreme court voted 6-3 to back the rights of pregnant workers. the driver had to leave her job at ups after a doctor recommended she not lift heavy items. ups has given temporary assignments to other workers recovering from on-the-job injuries. a federal appeals court had previously backed ups. facebook's annual f8 conference -- mark zuckerberg just finished his keynote where he announced messenger as a platform for developers. cory johnson is outside the event and joins us now. cory: messenger is so important to the future of facebook.
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because of a bigger change going on. this huge change going on the tele-commissions does tele-communications i -- sms messaging is falling. in some places, it is shrinking. there are messaging apps out there like snapchat and tencent and facebook messenger. facebook messenger now has 600 million monthly active users. that is a ton of people. they will let those users do more than just chat with each other. they can share other things and that application developers -- let application developers write applications to be used on messenger.
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matt: thanks very much for that. i wonder what else we are looking forward to out of this developers conference. what is up next? he just spoke for a short time. what do you expect? cory: one of the interesting things he talked about was the facebook log in, one of the most clever things i have seen in decades. facebook says to all the companies out there on the internet saying, hey knowing who your users are, keeping track of their passwords, we've got that for you. they created this facebook login with one click come your facebook credentials will let you get in to the app you want to use. facebook has used that together elizabeth mason across the internet -- boatloads of information across the internet.
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mark zuckerberg: since making this change come apps are now requesting 50% fewer permissions than they were before and are seeing more than 10% increases in the rate of people looking at. over the next month, more apps will migrate to the new login. these changes will make people feel more comfortable and make the ecosystem a lot healthier overall. cory: ecosystem is a good word for what they are trying to do here. inspire developers to do stuff on facebook, inspire companies to let facebook run their logins and let media companies publish on the facebook platform so that facebook is the center of the computing universe. matt: we will get back to you and continue covering this story throughout the hour. right now, amazon says federal approval for drug testing is too little, too late. the company's public policy
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chief told a senate subcommittee that the drone model approved by the faa for testing is no longer being used. is that amazon is testing drones in countries with looser regulations that encourage more innovation. joining us from washington is the ceo for the association of unmanned vehicles. thank you for joining us. how much of a disappointment is this as far as the slow pace of u.s. bureaucratic regulations is concerned? >> this has been going on for some time now. clearly, the technology is amazing rapidly. -- advancing rapidly. amazon is ample medic this challenge where we are trying to move toward -- it's exciting for consumers and many user industries. we have to move that quicker. cory: amazon would rather test
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new technology in places like europe or asia. i'm surprised that europe will have faster and more innovation encouraging regulations than the u.s. how did that come about? >> a great question. there is testing and then deploying. we want to field this technology as quickly as we can. the key is harmonization. even across europe, there is variability on how it's being allowed any permitted. -- and implemented. i was in montreal -- we were kind to figure out how to get this harmonized around the world. matt: are the safety concerns holding us back? that's what the faa associate director said. she said it is too complex and
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the safety concerns are paramount. >> some things are not complex. we have a proposed rule in the u.s. which is going through its usual statutory process for being able to fly under 500 feet within line of sight. that unlocks a huge number of potential applications and value but we need to be working on more complex business and safety cases like flying beyond visual line of sight flying in urban areas and things like that. the work has to move forward. matt: if you look at other regulators where do you think this technology is going to take off first? china europe, where do you see the best case for innovation and forward motion? >> is a global phenomenon. it landed differently in different markets.
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i don't think that is going to be as much to do with the civil aviation authorities or the faa as it has to do with how people want to utilize the technology. we had a good discussion on capitol hill with many of the agricultural organizations. farmers want to use this technology and they are a low risk case. we would like to think the u.s. is going to be the place where this route the quickest best route -- roots the quickest. matt: is amazon -- do they use suppliers or funnel revenue to those other markets rather than using u.s. companies? >> potentially. probably the more important thing is that amazon has a huge business opportunity in the u.s., as do many other suppliers and industries.
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this is the largest market. the uptake will be rapid once we have the ability to fly. we want to do this on a global basis and harmonize it as well. we can test these technologies and prove how safe it can be and will be and integrated into spaces where there is a lot of manned aircraft as well. matt: we will take a quick break and come back with more from the facebook developers conference. ♪
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matt: this is "bloomberg west." coming up, how facebook makes money. we donate digital ads on the social network and the twitter ceo is in india. why? back to the facebook f8 developers conference. cory johnson is back with us from outside the event. this time, we are talking about video ads.
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cory: why not? scott simmons joins us now. when you look at what facebook has done around video ads what are the underlying trends driving that? >> up and up. facebook is getting a lot more traction in video. it is building an interesting platform for marketers to use. mark zuckerberg said a few years ago we only used text on facebook. then we transitioned to images. now, we are transitioning to video and making it more of a platform for advertisers as well. >> they talk about so much on the conference calls. is this an area where the revenues are higher than textbased ads? >> they can be, for sure. that's a good thing for facebook.
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the more video advertising they can sell, the higher revenues they will be able to get. cory: when you look at it from the agency side of things, what these see them doing -- do you see them doing and what could they be doing better? >> is a proven format from television. we are in a post-broadcast world where you can aggregate huge audiences without needing to be on prime time television. we are seeing the new advertisers doing a great job putting advertising on their. -- on there. facebook is figuring out just now how farther reaches. -- how far their reach is. cory: it seems like from the early days of the internet, we talk about these issues. wouldn't it be great if you could measure advertising because you know who you are
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reaching? every time advertising has been measured, cpm's go down. are we going to see that with video? maybe they won't have the biggest video business -- >> it's very possible. we talked about the internet being the most measurable medium for years and we are getting there. they know who you are and what you like and what you are writing about and what you are interested in. they can measure the effectiveness of the backend. if you saw a video ad on facebook for a car in with your dealer ended up buying the car take -- they can know that the ad trigger that. cory: are there tools that facebook can offer? the way apps are being served to consumers we watched madmen and
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see a bunch of guys -- with this ability to real-time auction ads , one kind of tools does facebook cap that are unique? >> you talk about when it's measured it goes down -- it did hit a bottom but now with the right tracking, there are trends up. on the video side -- one of the most powerful things they have done was working with a company called data logic which powers the loyalty backend of grocery stores. they can tie real purchase behavior in a week or month's time back to your ad at the personal level. that has been a powerful 12 for them.
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this -- that has been a powerful tool for them. they can show the real incremental value of the added to you. -- ad to you. advertising to them will increase the return. >> that is absolutely true. wanting to know what the advertising -- them enable to target people and letting the advertiser know whether someone used the ad is pretty revolutionary in advertising in general. that is pretty exciting. >> a bigger trend right now. you can track things through the pure digital connection. as we have all these tolols stitching it back, we are sayi
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eeing brand advertising connected to a revenue return. cory: we saw this news that the like of new york times and buzzfeed would publish on facebook only. i got an e-mail for missing your media executive saying idiotic is exactly right. when you look at that as an advertiser, is the risk so apparent? >> it is not exclusively. it shows how are powerful -- how powerful. you talk about 600 million messenger followers. that is the power facebook has and the fear that traditional publishers have. mark talked about every time there is a splintering, many of
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them won't be good. facebook can be between better and best. that is really powerful and something even somebody like new york times will have a hard time competing with. cory: good to see you both. thank you very much. matt: we will give you a check on bloomberg's top headlines. twitter is expanding its india business development team. the ceo's book about the plans. -- ceo spoke about the plans. >> we are costly expanding the number of languages we support on the platform. i suspect us to invest where we are seeing growth. matt: twitter is partnering with the indian government, 16 government accounts will be able to send their tweets to indian
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citizens. india's largest suv maker in talks to buy an italian auto design company. negotiations could still fall apart but investors seem to like the idea. shares of the italian company rose as much as 10% today. christie's is banking on this picasso to patch the highest price ever. they're asking wondered $40 million for the 1995 -- $140 million for the 1995 painting. the seller is anonymous. the current auction record is $142.4 million paid by steve whynn for a francis bacon painting. ♪
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matt: this is "bloomberg west." the bwest byte is where we focus on one number that tells a whole lot. cory johnson is back with us from facebook's f8 conference. cory: how about 10%? 10% according to mark zuckerberg -- 10% of all of all voice over ip calls are made using facebook . there are the way to route voice calls over the internet. 10% of those calls are made on facebook. facebook has great aims to have you use facebook, including making phone calls simplifying the software and the issues. they have already commanded 10% of that market.
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that is a huge chunk of a growing -- rapidly growing market. matt: i do a lot of face time which is an apple thing. voice over internet, the quality never seems to be quite up there with regular phone calls. is that improving? cory: you make a lot of voice calls you don't even know -- a lot of the calls you make from your desk are connected over the network. there are a lot of calls wired that way that you don't know about. and to and across the facebook network is pretty interesting -- end to end across the facebook network. they're capturing data about those users. matt: i have a new favorite acronym. voip. thank you very much. you can get all the latest headlines all the time on your
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phone, tablet, and over ip or bloomberg radio. ♪
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mark: from bloomberg headquarters in new york i'm mark crumpton. this is "bottom line." to our viewers here in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this wednesday. cory johnson is in san francisco on day one of the facebook f8 developers conference. julie hyman and scarlet fu have team coverage of the heintz


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