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tv   Bloomberg West  Bloomberg  May 5, 2015 6:00pm-7:01pm EDT

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cory: live from bloomberg world headquarters in new york city welcome to "bloomberg west." i'm cory johnson. here's a check of your headlines. mike huckabee is the six republican to declare for the 2016 presidential race. he announced from his hometown of hope, arkansas. mike huckabee: the government is this this functional because it is becoming the roach hotel. cory: he also ran for president in 2008 claiming a victory in
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the coveted iowa caucuses. shares of herbalife are soaring after they posted a 5% gain in first-quarter profits. revenues of $1.1 billion. sales in china were strong, rising 21%. in every other geography, herbalife saw sales decline. bill ackman called the company a pyramid scheme. groupon posted a $14 million loss in the quarter. sales fell 1% in the first quarter compared to last year. they blame currency headwinds. electronic arts reports lower sales in the fourth quarter. the maker of fifa soccer says it is boosting its shares buybacks to $1 billion. two nevada residents have sued manny pacquiao and his promoters
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for not disclosing a shoulder injury before his big fight with floyd mayweather. they say they defrauded viewers and sports bettors for not revealing the injury. they are seeking class-action status and damages for all ticket buyers and pay-per-view watchers. salesforce may have potential buyer 800 miles to the north -- microsoft. they are bidding a possible bid of the company after salesforce was approached by another would be buyer. salesforce is working with two investment banks to respond to those offers. it sent shares flying again. what does this tie up mean? joining me right now from seattle is matt, partner of a venture group. there is a company in seattle called microsoft. matt: i have heard of them. cory: what is their aspirations
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in enterprise software? matt: i think it is to be a winner in both the infrastructure as well as software and service which is the big transformation that is coming about. i don't think either of those would be enough for them to justify buying salesforce. i think the bet on salesforce is this a can we build intelligent apps together? data-driven applications that will be for the future. for example, salesforce but a company last year that have technologies combining with microsoft technologies and that delivered intelligence services to companies. cory: i want to back you up. you say microsoft thinks salesforce has engineers they don't have and they need them? matt: i think that is correct, particularly around software as
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a service application. there are things that salesforce has done on a go-to market that microsoft has not fully figured out yet. together, they can build this next generation of smarter applications. cory: that is interesting. my spreadsheets have been burning because i have been trying to figure out ways this could make sense. i look at salesforce as a company that is what it is, but it is also a compilation of a bunch of recent acquisitions that have been very expensive or the company without delivering free cash flow after the cost of the acquisitions. anybody in the industry could see they are doing a lot of acquisitions to boost revenues but they are not getting the free cash flow as a result. they are spending it's on on marketing. -- eight on on mara ton on
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marketing. matt: it is very highly valued before the run-up we saw. it is a big bet if that is something they are trying to evaluate here. the rumors suggest they are. if so, it will not be just because it makes you better, but because the cloud where microsoft is strong and the data analytics you could embed would be the bet. that matters because there is a lot of usage and understanding in both what salesforce does in its own products that are built on top of its platform. cory: matt, always glad to see you, even on skype. thank you very much. facebook chief operating officer sheryl sandberg made her first public comments since the death of her husband.
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responding to a statement from president obama, she wrote on the facebook page "thank you president barack obama, for this beautiful tribute and your friendship. david goldberg admired you for your passion and deep love of sports." he died of head trauma in mexico. he was a friend of a lot of people. ben affleck bono and a friend of ours. the memorial service caused the movement of the earnings release to this morning. the numbers from disney show the company is doing really well. firing at all cylinders -- movies, theme parks. "frozen" still contributing. they posted a 7% gain in revenue and a top $2 million for the calendar first quarter.
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the movies are going to play a bigger role going forward. "tstar wars" seeing huge buzz. i talked about disney's business with rami and cynthia from los angeles. rami: people used to joke that maybe they shouldn't change their -- should change their name to espn. they were actually down this quarter. "froszzen" still having an impact on the business. merchandise sales were up 10%. although they had the dvd release and the same time. the film studio business was down but you are seeing spillover in other parts of the company. cory: what is your big take away? >> looking at the earnings i was not too surprised they came up better than expected even know there was guidance -- the analysts were saying buy or hold.
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nobody was saying sell. even before the earnings came out, a couple of video from people from citi raised their earning expectations and raised the price up over the next 12 months. everyone was saying it was going to pop. cory: i don't care about stocks. i'm interested in the disney business. theme parks doing really well. ramy: they rose about 24% in the quarter year on year. the number was $566 million. half $1 billion of revenue coming -- half $1a billion dollars. a lot of people are buying things while they are in the park as well. cory: is this disconcerting -- you mentioned espn. the programming costs and i call
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it college football. what was it that hit them in the quarter that was a bigger expense than espn would like? matt: they decided college football, thenn n nfl wild-card game and the sec netowork. cory: both play tough nosed games. i wonder at one point, to your point, espn was such essential business for disney. we see what has happened with sports in america. we see the rising costs of programming and one wonders if espn will keep the lead and continue to fight off fox and comcast will that come at a stronger expense for the profitability? chris: interestingly enough, they have posted really good revenue numbers. all of the numbers in tv which people think of now as in peril
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were really strong. so, it is obviously a concern for bob iger. he talked about these new skinny cable bundles. it is more of a programming cost issue that it is a revenue question. cory: coming up, target india. we will go inside the plans for global domination. yes. we will talk to one of the big shots. that story is next on "bloomberg west." ♪
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cory: this is "bloomberg west." top headlines -- hsbc reported profit of $5.3 billion in the first quarter. costs for bad loans and medications declined. the ceo criticized british policymakers for driving out banks.
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hsbc moved its headquarters of the u.k. the result of friday's elections may play a role in the decision. sprint surprise some people want posting again of 570,000 monthly subscribers in the fourth quarter. it is the second month of customer gains. tablet subscribers had a decline. the company posted a loss of $21 million. xiaomi is on a mission to dominate the world. xiaomi launched a new flagship smartphone in india last month. the company announced they will sell ta phone in hong kong that will cost $200. it is the leading smartphone maker in china based on the number of phones sold. they are trying to expand to india. angie lau spoke to hugo berra on their plans. hugo:.
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: this is our latest flagship device. it is also the first smartphone we designed specifically for global markets. angie: talk about that because predominantly your market has been china. it is 90% of your sales so far. you are expanding. that is why you are here. that is why xiaomi hired you away from google. how is it exclusively designed for a global market? hugo: we have designed it from the very beginning thinking about markets like india and indonesia. we wanted to design a very large battery into a five inch device. it requires breakthroughs in engineering. the result is we have managed to build the largest battery that you could find on a five inch device and it is as thin and light as devices that cost four times as much. angie: how do you sell it? hugo: primarily online on her
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own website. through some partners as well but primarily e-commerce. angie: you are selling it at cost. it is about growth, getting people drawn into the xiaomi story. what is the story? we have seen exponential growth. 240000 in the first quarter of 2011. you have grown to 73.317.3 million sold. that is next financial growth. hugoo: we are growing at internet speeds. people continue to see us as a smartphone vendor, but we are really not. we make phones as well but we spend as much time building software as we do building phones. we are building an internet connected platform. we have over 100 million users on that platform alone. we have to keep up. angie: you are also taking over
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the home apparently. this is part of the strategy of putting low-cost at-cost phones in people's hands, having them drawn into the xiaomi ecosystem. you are building that ecosystem now, right? hugo: that is a good way to look at it. we are an internet company. we are building a company for internet connected services. it is important for us to build internet connected devices and the home is perfect. it is a place where a lot of technology has not arrived yet. companies have not been able to build compelling enough products for the home in a way that builds an integrated ecosystem. we have launched a whole range of products for the home from a series of smart tvs which are beautiful, all the way to an air purifier, security camera, a weight scale, we have even designed a power strip. we have rethought what a power strip should be like so you are
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proud of having a power strip. these are all products that are connected together. we have also gone beyond and built a wi-fi ship that applies manufacturers. starting in china, building into the design like a fridge or dishwasher also connected together and be controlled from your smartphone. angie: you have a lot of investors, including from india. you have some new money. who is this? hugo: we have just announced an incredible, the most well-known business in india. he is excited. he came onboard recently. angie: what will you be doing with this money -- investing? hugo: we are continuing to invest in her own operations. we are also putting a lot of this money to work in startups. we have invested in dozens of
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startups to date. the idea is not only to be a venture investor. of course, it is always great when the company does well. but also build up his ecosystem. a lot of our products, the mi band the fitness tracker they were built by this ecosystem of startups that we helped create. in the way that we are actually multiplying the sphere of products we are building by getting other startups to do it for us. cory: huh. that was hugo barra with angie lau in hong kong. coming up, apple may be updating its design of the tv remote. how the company moving away from minimalism will affect the customer, next. ♪
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cory: i'm cory johnson. apple, some interesting items -- first, big changes on the tv business. the redesign of the tv remote. adding a touchpad being unveiled next month. apple is facing the practices of their music business. they have pushing music labels to take their music from free streaming services and that has prompted an investigation. what will the music service look like and will the remote even matter? we are joined from our guest alex. let's stick with the remote. i'm curious about this. is this finally the apple tv that was alluded to? alex: i'm glad you said finally because it seems like we have been down this path before when we had expected an update and only to be disappointed by a
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lackluster refresh or no change at all. this time, this seems to be enough anecdotal signs that we are coming into a new remote and new interface for apple tv. it is really about time for apple. it has fallen grossly behind in this market. you just had hugo barroa on. they are doing a great job of integrating home devices. apple needs to make some moves here. cory: one wonders what it means across platforms for them. the remote that they ship with their apple tv also worked with the computer and i'm sure you have enough apple products in the house it works with. i'm wondering if they gave up with this tv thing. alex: i don't think so. gmp securities really believes in this internet of things. cory: everyone there? you all get together and have a session? alex: we are talking about
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nearly 15 million connected devices today. it won't be too far away until we see the next 15 billion devices. when you see what apple could do around the tv and the interconnectivity with the pc and mac, all of these things come into play with apple. we don't think that they can give this up in the same fashion they came out with the apple watch. a device whose features have not fully matured, but they have to be in that market. yes we do think they are going to do some refreshes here hopefully this summer. cory: i'm glad to see you all get along there. let's turned to music. apple was, for a brief while, the dominant company in music. maybe no longer so, but interesting that their strategies would be garnering unwelcome attention. alex: we will have to see exactly what they are doing on
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that front. more than a year ago, thatey got in trouble in the e-books arena. as they go from going to transform the music industry yet again, they have learned something from that and can do it in a more elegant way. we'll know what they are doing. it is good to know there are watch guards out there to protect consumer rights, but it is also nice to know their art technology innovators like apple that are trying to improve services and get artists paid. cory: that is what they want. we will go to commercial in a minute. alex we appreciate your time. coming up next, periscope -- was that the actual winner of the fight on saturday? the video streaming service was a tool for piracy. could that be a risk for twitter? we will discuss when we continue. ♪
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cory: this is "bloomberg west." i'm cory johnson. let's check the top headlines. president obama nominates joseph dunford to be the next chairman of the joint joint chiefs of staff. president obama: general dunford is one of the most admired officers in our military. a native of boston joe is the definition of boston strong. the song of a retired boston police officer and marine veteran of korea he followed in his father's footsteps and
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distinguished himself for nearly 40 years of military service. cory: he is expected to be easily confirmed by the senate. islamic state claims responsibility for the attempted attacks in texas however no direct evidence linking the suspects to islamic state. they were shot dead by police afterr opening fire. eu competition chief says regulators will miss a self-imposed deadline to finish tax probes into companies -- apple, amazon. she told the european parliament that regulators would not sacrifice the quality of their investigation. apple raise the potential flag on the cost of the company. it was required to pay path taxes to ireland. hewlett-packard and former chief of autonomy, it is getting ramped up. mike lynch said that hp's $5
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billion u.k. fraud loss is a "desparate search for a scapegoat." hp bought metonymy in 2011 for more than $10 billion and was forced to put down $8.8 billion of that value year later. google wants to say automatic flight go beyond pilotless planes. the chief of the cargo drone program says they can be made safer. germany's air traffic controls suggest that aviation has been considered to let ground-based operators take over during emergencies. if you are trying to watch the anticipated fight between floyd mayweather and manny pacquiao on saturday night, there was one
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place you could have found it for free -- periscope. people turning to periscope to stream the fight from bars and living rooms across the world, some people even stream the video from the event itself. ihbo and showtime were trying to make sure if you watch the fight, you paid for it. dick costolo, whose company owns periscope, says the night was a victory for periscope. where does that leave periscope? what risk is there to twitter? joining me right now is joshua. this is interesting because it's issue of what the place where the pirating happened, is the owner responsible? joshua: that will be something that rights holders want to argue especially when you have someone like twitter who owns it and it is not a startup that has eight people. cory: there are some deep pockets behind periscope.
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do we have any sense of how big of a deal this was? joshua: periscope said they got 66 complaints about streams and took down about 30 of them. the rest of them were gone by the time they got to them. there is a question of how many of these people would have actually watched the fight, paid for the fight or whether people were just tuning it because they were curious. we don't have a good count on how many people watched those streams. cory: did you watch it? joshua: i did not. i'm more of a basketball guy. cory: it was curious to me because twitter has not been in this space before but other companies have like youtube. they had a long-running fight with the music industry. is there a parallel to be drawn? joshua: i think there is. you might remember that youtube was sued by viacom. eventually, they did not have to pay anything.
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they came up with a system called content id which identifies copywritten content and notifies the owners and lets them make decisions. that will be harder for something that is live because they can check it against the database with the id and contact someone. cory: to it down half of the things that were complaints. they check on monday morning there is nobody streaming the fight because it was saturday night. you wonder if this raises cost operations for twitter. that changes the business model a little for twitter, no? joshua: i think there is a question of how to do it. they have fielded incoming complaints in a did not seem like that was satisfying to all parties. they have to come up with some sort of automated solution and it is not clear how that will be. cory: i love dick costolo and that he says what is on his
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mind, but the comment from him -- yippee for piracy. the pirates on periscope won the fight. would that comment get him into trouble? joshua: if he could have that one back, i am sure he would. yeah -- cory: he tweeted it. here twitter is -- the best use case twitter has made about their advertising platform is in conjunction with movies and television and live events. these tweets about these events we can do crosspromotional. i would think he does not want to bite the hand that is feeding him. joshua: i think with periscope that could be something that twitter could offer as an added product. if there is a fight, you could have hbo working on periscope content that is not the fight itself. you don't want to ruin those relationships. cory: can you imagine a twitter
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ad sales person after dick costolo said that? joshua: it has to be a tough conversation. cory: joshua, thank you. up next what do the highest-paid women in america have in common? we will tell you who made what enxt. next. ♪
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cory: this is "bloomberg west." still to come, the highest-paid women in america. how much they are making. skycatch sending drones to aid recovery in nepal. first, a check on your headlines. directv, first quarter profit was 30% more than a year ago. revenue up 4%. the satellite-tv service added 729,000 subscribers.
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the at&t purchase of directv is awaiting government clearance. netflix is asking regulators to reject the deal saying it would increase at&t's ability to hinder online video providers. amazon is giving subscribers a new perk. they get axi access streaming movies and music on jetblue flights. google says mobile searches are topping desktop searches in 10 countries. google unveiled a new tool to help advertisers highlight their products in mobile results. what are theat do the highest paid women in america have in common? they work in technology. the yahoo! ceo marissa mayer was the top a woman last year with
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$59.1 million. this must have been fun. for a geek who reads proxy statements for fun, this must have been fun. guest: being able to work on a story with the highest-paid women was really rewarding because there are only eight of reads proxy statements for fun, this must havethem out of the top 100 executives in america. cory: tell me how they are paid. she came to the company and left stock behind and that boosted her up. we see that once in a while. is that typical in these highest-paid gigs for women? madeline: it is not typical for women but the same thing happens quite often because apple needs to say come work for us and how will they get people to work for them by paying for what she is giving up by leaving burber ry. cory: you mentioned melissa meyer. not so much this year? madeline: she is the
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highest-paid ceo right now but the interesting thing about her is most of the compensation is in the form of stock. yahoo! stock is not done that well this year so the current value of her pay which is another form of compensation that the pay index tracks is down below her $59.1 million compensation awarded pay. cory: safra catz ceo of oracle. how is he doing on the pit -- she doing on the pay scale? madeline: she is doing well. she is the second highest-paid female executive. so, that is because at the time of the proxy, that did not account for her promotion to ceo. it takes into account as cfo. cory: in your work, did you look at last year? madeline: we are imagining what is happening in 2014. the thing about safra is the
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proxy only accounts for her time as cfo. a few days before the proxy dropped, that was when she was promoted. maybe we will see a higher number this year. cory: she deserves it. i wonder -- oracle's market cap is about the same as ibm right now. how is genie doing? madeline: she did not make it on the list this year. cory: top 8 -- who else? we talked about marissa, safra catz. madeline: another one is marillyn hewson. some other ceos are -- cory: tremendous disparity between the men as well. madeline: what is interesting
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for angela is she makes more than tim cook. cory: tim had that big year when he got the job. part of the thing with this stuff is the executives hate these stories because it is an exact. inexact. they are all guaranteed to be in the money, but you cannot say that if it is just waiting to figure these things out. meadeline: we use that to price thatour options. we price the stocks based on the fiscal year end. we decided that was the best way to do it. cory: i think it is fair. madeline, thank you very much. coming up drones helping the relief effort in nepal but can ad drone do what a helicopter can't? that story is next. ♪
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cory: this is "bloomberg west." it is been two weeks since the devastating earthquake in nepal. the government is asking for all foreign rescue teams to leave the country.
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technology companies were the ones rushing to help. skycatch is a maker of commercial drones. they are working in partnership with unesco and the world bank. emily chang sat down with the ceo. guest: as soon as we found out, the team gathered up and we asked each other if we wanted to do this. i basically e-mailed the entire team and i asked for volunteers. very quickly, we got everyone to volunteer and say take me, i want to go. honestly, we have no idea what we are going to do on the ground. we knew this ability was very important. it is always important in disaster areas, especially search-and-rescue. we did not want to be too late. we rushed to get out there as quickly as possible. it was the second day out, we
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were flying the team out there. it was risky because we basically sent the most highly equipped people with backgrounds in first aid. we shipped them out to see how we could be of service. emily: what did they say when they got on the ground? christian: rubble. it was really depressing. i kept in touch with both of them on an ongoing basis because what they were seeing was scary. a lot of desperation. people pulling people off buildings. people sleeping on the streets. a lot of the stuff that you don't expect until you are there. both teammates had to work with local police and the u.n. and other organizations to actually start doing something which is
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today as soon as we landed, we were approached by the u.n. unesco and the world bank so we can start doing operations. emily: what can your team and a drone do that a normal recovery team cannot do? a helicopter? christian: what you can do is actually create visibility for search and rescue. you can send out a drone, map it out so when you send search and rescue people they have more visibility as to how many people are on the ground, assess the damage really quickly. honestly, we are -- everyone who got there were a little too late. you really need to be there a day after the disaster to actually do anything meaningful. today, we are mostly focusing on reconstruction. our maps are helping the u.n. and world bank to assess damages on hospitals, schools so that
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they can get things going and deploy resources. emily: who are you working with to provide this data? christian: the world bank, the u.n. and unesco. we are also working with team rubicon. it is a search and rescue effort. they have been there since day one. emily: what is jared letso's involvement with skycatch? christian: he is an an advisor. he helps conservation groups in africa, saving animals -- a bunch of humanitarian efforts that we are also involved in. emily: is the involved in the nepal effort? christian: not physically but he is providing us with connections and overall support. emily: you also teamed up with chevron. you are developing unmanned
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aircraft to check pipelines? tell us about that. christian: we just landed our authorization via the tsa to work with chevron legally in the u.s. it is focused on doing inspections of pipelines when they can be very dangerous for inspection. emily: there are legal issues surrounding tests like this. how confident are you that regulation will catch up with technology? christian: i have a very specific view about this. i think they will mold the regulations based on demands from companies. these markets are growing. chevron is involved. a year ago, they were not even talking to the faa. a you are go, one of the largest construction firms was not talking to the faa. they were all afraid to even mention drones because they do not want to be seen as using them for the wrong purposes.
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now everybody is jumping in. some of the biggest companies in the world. cory: that was christian sanz and emily chang who is off today but will be back tomorrow. the bwest byte is here right now where we focus on one number that means a lot. matt miller joins me now. matt: what a pleasure it is. a great number -- 22,000. that is the amount of miles away the satellite is away from jetblue flights that feeds bandwidth. jetblue is finally going to come out with a wi-fi that will allow you to download and watch movies or listen to songs or actually use the internet for anything that you want. cory: i fly virgin america. i get gogo internet which i cannot stand to use because it is slow. matt: it is horrible and
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hopefully that monopoly will be broken. although, jetblue is the only airline to offer this service. you will be able to use amazon -- what is that service? amazon prime. i forgot i bought it one time and i realized it later. you can get 12, 13, 14 megabytes per second. it is pretty fast internet. it will be a promising alternative to all of the other horrible internet services that most of the other horrible airlines use. cory: t we have had the ceo on the program many times. it is finally happening. thank you for that. matt: my pleasure. thank you for coming to new york. it is so great to have you on the office. cory: you can watch "bloomberg west" all the time on your phone, tablet, bloomberg radio and we will see you tomorrow. ♪
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♪ >> from our studios in new york city, this is "charlie rose." charlie: you begin with a story from today's news -- two gunmen opened fire at the sight of a prophet mohamed cartoon drawing contest organized by the american freedom defense initiative, a new york-based group that uses the name stopped islamization of america. the shooters, elton simpson, and nadir soofi, were shot after wounding an unarmed officer.


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