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tv   Bloomberg West  Bloomberg  May 20, 2015 8:30pm-9:01pm EDT

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oh! i can't believe it! [cheering] hi, grandma! ♪ emily: salesforce raising its forecast. i am emily chang. it is "bloomberg west." . it's a woman. we will tell you what it means for the future of amazon. spotify adding video and podcasts to take on google and fend off apple. you may want to keep an eye on your robotics engineer if google is around. -- if uber is around.
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we begin with breaking. salesforce raising its forecast. the biggest first-quarter they have had. this underscores their attractiveness as a takeover target. cory johnson is in san francisco. we heard no comment on the deals. they are 1000% focused on customer satisfaction. corey: that's a lot of percents. here is the big take away. if you want to compare it to what the analysts expected it's better than that. the reaction and market trading is muted. last quarter, the stock jumped 12%. the next day it's down 5%. we will see how it shakes out in trading.
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while better than expected it has dramatically slower growth. the biggest first-quarter they have had but only 23% bigger than one year ago. compare that to one year ago. 37% a year ago. they went from 37% to 23% sales growth. that is a lot slower. it is different growth potential than what we would have expected a year ago. one of the reasons from that is that they spent less on marketing. the big knock on salesforce is that they spend a lot on marketing, 52% of revenues. think about that. that is what they are putting in the tank to make that thing go faster. they lightened up a little percent, only 49% of revenue. sales growth dramatically slows down. any potential acquirer it's barely profitable for revenue
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versus profit. the business with less marketing spend grew at a slower pace. there is slower growth. that would be a concern for a potential acquirer or equity holder. emily: i do want to bring in our panel of experts. we have gilt groupe founder joining us. pat, you have been covering salesforce for years. what kind of deal is going to happen. is the deal going to happen? -i don't know. >> i don't know. they got a call. there is more than interest. who might that have been? the three choices i'm sure we
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will get into more, google microsoft, and oracle. katie, tell us your theory. ->> they would have to acquire mark benioff. does he want to be a vice president of a huge company after running salesforce? emily: it doesn't seem like he would want to do that. >> the choices are that he wants to step away from salesforce and go into politics or philanthropy , or he would go to oracle to be a successor to larry ellison. i'll>> our sources have told us that talks are dying down. what do you make of that? >> it would be super expensive. it would be the biggest deal we would have seen. if you're one of those three
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players and someone is considering doing it all of a sudden you need to consider whether you should. it would totally change the competitive landscape. if you are microsoft and google is contemplating buying salesforce you've got to be all over that and figure out what it means for your business. the same thing for oracle. emily: what's going to mark benioff's head right now? how much of a distraction is this talk? kevin: it is a distraction. i just think it's a very unlikely transaction. until this happens, we have to put the odds at very small. it's just so big for those large companies. nobody wants to make a $60 billion mistake. those are not the type of typical transactions that google does.
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a double-click or youtube or android, they bought core technology early on and build it from there. i think it is not very likely. emily: on that note, bill mcdermott said that you don't buy companies where prices are going to drop and revenue will be under pressure in the future. you have always been beating on salesforce. what do you think of that statement. cory: i am always loving salesforce. it is not growing like it used to. in the latter stages of growth they have been field by bigger acquisitions. this is a company that has grown lately not because of their software, but growing because of buying growth and that has its limits as well. anybody who gets involved in a merger with this company starts to pull away the covers and see these things and it's hard to imagine where this grows in the
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future and where that growth is going to come from and the pace of that growth. it's a great big copy that's growing, the revenue -- but what's it going to grow like in the future? these growth rates are coming up fast. that's going to be a disconcerting note to a potential acquirer. kevin: the growth rate may be slowing, but it's faster than oracles. cory: it would be a massively diluted deal. emily: you guys were nodding vigorously. -if>> if you look at acquisitions to get into areas that's been a mixed bag. hp is spinning out compact -- compaq. using the ebay-paypal breakup.
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you're seeing a lot of mergers being undone now. kevin: they have a ton of cash. these companies are sitting on huge rows of cash. google has 65 billion. microsoft has $95 billion. if you are oracle, you got a salesperson in every company. you can cut out all that expertise. number three, the world is moving to the cloud and people have to adjust to that. emily: pat, katie kevin, cory johnson. thank you always. in today's attention of drive, uber has indeed carnegie mellon's robotics lab poaching 50 employees from software developers to high-level executives, all of this according to the verge. in february, uber and carnegie
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melon announced a strategic partnership. uber set up shop next door to them. uber is moving into the advanced technology center. it looks like that partnership may have been a job fair. we reached out to uber for comment and have not heard back yet. up next, meet jeff bezos's new shadow. we will take about the elite job and in the woman who is filling the role. ♪
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emily: a developing story we are tracking today. senator rand paul protesting a renewal of the patriot act. is it all for show? the senate has not taken up the bill yet. it technically is not a filibuster. they are set to vote tomorrow on legislation that prohibits the nsa from collecting phone records in bulk. to a big shift at amazon. for the first time, jeff basis is right hand band is a woman. renz was named as technical advisor to the ceo. she has been at the company
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since 1999. she has worked on her an array of projects. what does her appointment mean for the future of leadership at amazon? i'm joined by my guests. jeanne, what you make of this? what can you tell us about maria renz and what she will be doing? -she has one of the top us jobs working for jeff bezos. >> it has got to be a real learning experience. she has the tools to get there. at the core, she is a retail person, which means that she will be groomed to have some sort of ceo job that is retail related. emily: this is great.
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she's a woman. why is this important? >> first of all, i don't see jeff bezos -- i see it as genderless. i think jeff is likely to treat women as brutally as he treats men meaning in the best possible way. i think it is suited to a certain type of individual. emily: why do you say that? >> i started my career at amazon. jeff bezos early on was setting on women. from my perspective, amazon is a culture of go get it toughness. maria is rising in those ranks. emily: what do you think of the term "shadow?" emily:>> it is an odd term.
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they call it technical advisor to the ceo. i think it provokes. at the end of the day everyone has run big businesses at amazon and have gone on to run bigger businesses. that role has teeth. emily: some of the former shadows are running businesses in their current roles. what can you tell us about the people sitting on amazon's bench? there is always the question about who can succeed jeff bezos. >> it's not obvious. jeff wilkie has been with amazon since close to the beginning. he runs their retail. if you're going to ask me to replace a non-replaceable person, it's probably him. i don't think there is anything in the queue.
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i think maria will be ahead of a major business. i think jeff is probably the heir apparent at this point. emily: what you think? >> i think that i will agree. emily: you come from the e-commerce business. tell us how important it is to have diversity in leadership when it comes to e-commerce. >> one of the key reasons that women are emerging as e-commerce leaders is that -- there is investment in fashion, beauty, premium merchandising experiential types of commerce. in those types of areas understanding the female mind in perspective, is something that a female leader brings to the table. emily: it's great to hear about maria's promotion to this role. the term shadow is debatable.
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thank you. in today's edition of out of this world -- -we have ignition and lift off. >> we have liftoff -- emily: as successful liftoff from cape canaveral. what is cool as the payload. it's caring a highly secretive military space plane developed by nasa and built by boeing. they say it's being used to test a technology that can fly autonomously. also is a kickstarter funded satellite project that is trying to use of solar radiation rather than rocket thrusters to propel itself through space. it won't be in deep enough space to test solar sailing just yet. the society will launch that mission on spacex's falcon
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rocket in 2018. spotify is video muscle, but will it went over advertisers and beat back competition from apple. we discussed that next. ♪
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emily: it is time for the daily bite. today's numbers 20,000, that is how many websites may become unreachable as engineers from the biggest tech firms try to fix a bug named logjam. a paper published this week disclosed the existence of the bug. logjam allows hackers to see or change information on a website that looks secure. when it's fixed, some older websites may not work.
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patches for other popular browsers will be released soon. today, spotify and asked it is getting into video. the company is now streaming video. they will be served up based on what you have watched. spotify is also getting into original content. >> what is cool is the way it complements and extends the core music experience. we believe it will keep users happy and engaged, but that they will listen to more music as a result. plus, it's really awesome content. it adds value to the spotify experience. emily: spotify is feeling some heat. jay-z relaunched tidal and
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says he has 770 thousand subscribers. we are weeks away from the apple development -- development conference. will this be a game changer for spotify? we speak to the director product marketing for iddo shai and kevin ryan. is this a place for ad dollars. his spotify admitting that they can't survive on music subscription. iddo: we've seen mobile video increasing last year. if you want to make money online video is the way to do so, especially on mobile. advertisers love the mobile experience and no viewers are engaged with their mobile devices. if spotify was to make more money, especially from users who don't pay for the service video is the way to go. emily: i recently spoke with the founder of pandora and we were
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talking about the difficulties of working in the streaming music business in general. we were talking about why they had to give it to an ad driven model. i want you to take a listen. >> we had the idea that we would be ad supported. we thought we would be a subscription business initially. clearly consumers did not accept that. we had to invent the ad supported business. it was touch and go for a long long time. last year was our first profitable year. emily: the founder of pandora there. kevin, i want to ask you. how big of a pivot is this for spotify and why now? kevin: i don't think it's a pivot. i think they're just adding to their product offerings. that's very different. spotify has incredible distribution.
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the number one by far streaming service. my kids only use that. there will be more products there. making money and music is incredibly difficult. they are as well position does anyone fit i don't think they are worried about jay-z. i don't think that there is a momentum there. it takes billions of dollars and a commitment to the internet for a long time to be successful in this area. emily: what about google? youtube? facebook? even snap chat is getting into video. can spotify compete? iddo: i think they have a good suite of applications. i think they can compete. i think this is something snapshot does not have. it remains to be seen about how they will push this visio -- video offering across the devices.
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it's easier to handle audio files. video -- if you want to get into real-time ad selling, these are pretty tricky. we have seen big companies that wanted to get into the video business, like facebook. also yahoo! and aol before that had to buy because they wanted to play in that game. emily: some of the original content looks interesting. a video series is showing a new dance move every day. i want to take a look at that. thank you so much for joining us. kevin, you are staying with me now. i do want to talk to a little bit about something new that you're working on. you've had a lot of experience launching and building up companies. you just announce her latest startup called kontor, for office design. kevin: there is a $60 billion
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market every year of companies buying furnishings. there is no website to see the entire selection, get inspiration, so were building that right now. we will launch in a couple of weeks. it looks very exciting. i think it's going to be a huge opportunity. it's exciting that you can still find enormous opportunities in the internet where no one has launched yet. this is one of the areas where you can find big things. i think kontor is going to be a big success for signing up the architectural firms. it will take a subcategory and make it bigger. emily: startups used to be started in garages. now we are seeing companies spending a lot of money on their offices. is it assignable bubble? real quick. kevin: the biggest increases the large companies the traditional company then need to spend more
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on their offices to compete to get workers per that is where you are seeing growth. emily: kevin ryan, startup founder and veteran. thank you for joining us. thank you for watching us today from san francisco. ♪
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announcer: from our studios in new york city, this is charlie rose. charlie: the founder and president of the political risk consulting firm, eurasia group. his new book is called "superpower." i'm pleased to have him. a lot of people think about where america goes from here. i read from you, many countries including china, russia, india brazil, have proven they can reject u.s. leadership where it


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