tv Bloomberg West Bloomberg May 1, 2014 1:00pm-2:01pm EDT
>> live from pier three in san francisco, welcome to "bloomberg ." t-mobile adds more subscribers in the first order than verizon and at&t combined. i will speak with the ceo of the carrier about how his company made such a huge turnaround and whether a merger with sprint may be coming. facebook plans to buy oculus rift -- it may not become a reality anytime soon. a company out of maryland is now claiming rights to the virtual-reality headset paired we will dig into this brewing legal battle. there could be another major merger coming in the pay-tv
business. at&t is approached directv about possibly acquiring the satellite-tv company. the wall street journal says directv would be open to a deal. alibaba is in talks to regain a stake in payment affiliate which processes roughly the same number of payments per day as paypal. according to a person familiar with the mental, giving a stake would give -- gaining a stake the paradealibaba -- of celebrities looking to buy the la clippers now includes the queen of talk. oprah winfrey is talking about a ellison. with larry magic johnson and floyd mayweather are also interested should the nba for us dollar sterling to sell good -- donald
sterling to sell. our lead story of the day. on hise's ceo delivering promise to shake up the wireless industry. carrier -- added more than verizon and at&t combined. t-mobile is using cheaper plans to work customers. to $6.9yrocketed 434% billion. the company posted a loss of $155 million. all of this coming aspirin is r bid.ing for a takeove i spoke with the ceo of t-mobile and asked him about the booming subscriber growth and whether he thought it was medication. -- vindication. >> one year since we started with the merger of metro pc a spirit we added not only 2.4
million customers this quarter, but 6 million in the last year heard 1.3 million ads and 3 million in the year. we added 12 times as many phone data adds as our nearest competitor. comether two competitors of the copulation is infinity. even smart people like you can figure out how to do that math. it is a vindication that the on ncarrier movement is the right one. we're really excited about it. along with the fact that the wireless industry grew. it was hard to see because of all the growth going to t-mobile. >> how long do you think you can sustain this? how many customers on the margins that at&t and verizon are that unhappy with that they will switch over to you? justrst of all, we have
approached 50 million customers. last time i checked, both have over 100 million. we are just focusing on changes that consumers appreciate. that they understand and love. at&t and verizon have been making changes to respond to us. they are temporary. bureaucratic,of short-term trickery. it is not working. i don't really care what they do. i'm focused on making the changes that's all consumer points -- that's all consumer points. i can't see any reason why we can't continue this momentum. story. is a true i was in a car with a driver and he had just switched from verizon to t-mobile and he said it's a lot cheaper but the network coverage did not
compare. what about those customers? was your driver cory? , is anddriver now come i n't he? the 700 bandal of acquisition from verizon. our network improvement over the lte year from zero pops up to 20 and the deployment of the 700 megahertz band which will be penetration and rural edge coverage, we have work to do, but this line of sight to it -- i would tell you that the improvements in the network were directly correlated to why we had record turnout 1.5%, which is part of why, along with
moving to 26%, turn moving down to 1.5 is in a contract player, that suggests that these network improvements are working. we will continue to invest. i'm hopefully -- if you send me the name of the driver, we will find out what his issues were and we will solve them. that is what i do every minute of the day on twitter and my phone. work on individual people's issues. that is working. >> i will see if i can track him down. you say you're going to continue to invest. you are still losing money. more money than some people thought. how long are you going to continue to do that? >> let's put that in perspective. when people say, we are losing money, more than people expected , we shifted our own guidance from what was a range of 5.7-6 billion and changed to 5.8. that is mainly because coming in q1, the volume of business coming in was huge. that is a trade-off anybody
would make. any shareholder would make. it's not sacrificing profitability over the long term. it's not buying. this is an acquisition game. it the cost per customer acquisition that we have is wonderful. we have front end loaded a huge amount. flow isum-term cash completely intact. if not, better than ever. especially with the metro pcs merger going weighted schedule on all fronts. >> sprint is planning a formal bid for t-mobile sometime this summer. were the leading candidate to run a combined company. i tweeted this yesterday and you tweeted back at me. am i? what does that mean? mean? i am proud of you. it took you approximately seven minutes to get to this mileage i think is seven minutes more than i thought would. when you say bloomberg reported
the story, i think it was actually you. if i could have caught you directly, it would have been other than smiley face. you and i have talked about this before. consolidation is one path or word for this company. i'm not going to comment on any individual talks that may or may not go on. with the growth that we have and the options we have come a consolidation is one good option and our shareholders and our owners would consider any opportunity. i'm not privy to any of what you learned there. the individual speculation about me -- you know my own opinion of myself. it would be easy for me to comment on that. credit to our team for breaking the story. , from aou think competition perspective, that the industry has changed since at&t tried to buy t-mobile? you are making t-mobile stronger. by making them stronger, doesn't that undermine the argument that
at&t and verizon are unstoppable? >> there is a few things. it what we're are seeing right now that is really fun -- i'm having a ball with it -- a glimmer of competition. this is what it looks like. big guys are nervous and restless and trying to figure out what to do. consumers are celebrating the people against each other. that is competition. it's great for america. it's great for the industry. in order to keep that competition, which is a big goal things havea lot of to happen. you have to find a way to make due that the doo-wop list -- opolis -- consolidation is usually thought of as one way of scale. back when the at&t possibility, before i was here -- that was a different game. there was an amount of time and people were looking at
consolidation purely to aggregate spectrum. aght now, t-mobile is thriving, fun entity with a great path forward. when people look at t-mobile, we look at our path forward, how to take this maverick approach revolution and keep it going. one way you do that is scale and spectrum. this is just one possible, theoretical way forward. i think is a very different time and a very different environment. those are things you said about sprint. what would you do differently if you are running sprint? >> the things i would do differently at any of these companies is run them. focus on consumers. idiocy off the looking at each other and just very humble way of serving customers and their needs. diding aside, what you just
with some of the hash tags we use, social media is nothing more than another way of touching individual customers and listening to them. the difference with me is, i listen to them and then i walk in and i use that as the strategic input as to how i run my company. it is individual customers on twitter, telling me what to do, creating the next phase of the uncarrier. i would do that in any of these big companies. i don't know what those companies are ready to change. whether it's sprint or at&t or any company, this is what we do. it's not just me. it's all of the employees, all of my management team. that is all we are about and we are having a ball doing it. , the president and ceo of t-mobile. facebook is paying $2 billion for the virtual reality company, oculus. does the technology that powers oculus belong to someone else?
>> i'm emily chang. this is "bloomberg west." this but agreed in march to buy oculus four $2 billion. -- one videosher game publishers try to get a piece of that deal. they say it has rights to the technology powering the oculus rift headset. that's according to the wall street journal. they claim former employee john intellectual property when he left that company and later became the cto of oculus. innocuous spokesman said it's thereunate, but when is this type of transaction, people come out of the woodwork with these ridiculous and absurd
claims. we are waiting on a statement from the videogame company. bloomberg news tech editor -- when you read the wall street journal story, it's incredible the way they lay this out. john met with the founder of oculus. --y took six other employees it does not sound too good. >> there is regular correspondence between the two. thatknew the technology oculus was trying to build and he was tried to build the technology and then leaves and goes to oculus and oculus goes outcome.s huge all of a sudden, what may have a smallseems like discussion become significant. >> they're not a small company in the middle of nowhere. they have less moon bets on their board. jerry bruckheimer -- tell us
zenimaxut cinemax -- media. >> they're rapidly boosting they're trying to blame to this game of multiplatform games. from the content side and the platform side. a lot of what they're doing is still under wraps. >> what makes facebook's latest acquisition unique is theis in a matter of weeks. mark zuckerberg has the huge stock valuation to play with. most companies don't have that. when you look at the multiple stock, it is so high that anyone who is advising him probably be saying, look, this is not going to last forever if we are going to d.
the interesting thing about the statement that we got was that people coming from out of the woodwork, when you think of a board with jerry bruckheimer, you're not out of the woodwork type of guys. this is just that one of those things where they're trying to get a few million bucks employ. this may actually be a pretty meaty case. >> thanks so much. coming up, could in home soda technology be a threat to pepsi's bottom line? we go inside pepsi to find out how the company is fighting the threat, next. ♪
>> all come back to "bloomberg west." pepsi and coca-cola have one of the most storied branding rivalries in history. new technology is posing a threat. at home soda companies like soda stream are pressuring them to re-examine their business. our in the loop an anchor when inside pepsi. betty, your interview with the pepsi ceo made a lot of this. i want to talk about the diy soft drinks because they are all the rage right now. what did she have to say about that? >> she made some of the most direct comments about pepsico embracing the technology. she said, look, yes and no in terms of yes, it's a growth market and it's something they want to plan. she said she will keep her options open eared they want to
look at all of the technologies out there, including soda stream . at the same time, she said, no in the sense that there is some worry about pepsico and coca-cola that these technologies are going to eat into their market share. i want to play for you a bit of what she said about this in home, diy: market. >> in-home soft drink manufacturing could be something that is a significant force into the future. we don't know. i think our goal is to create all types of machinery to make sure when this category becomes a factor in the market, we are playing with all of the machinery manufacturers. it's an open system. we can supply great tasting products for all of these people so consumers can get pepsico products with whatever machine thereby. >> investors took those comments to mean that pepsico may be
interested in buying a stake in soda stream. use all the stock spike immediately after those first headlines came out on bloomberg. -- sodaup one dollar stream's stock price. that company has been at the heart of lots of speculation about possible acquisitions, including by starbucks. you can see that that stock is very volatile. >> did anybody ask you about the technology that goes into this? isn't tech part of the reason you can customize your drinks these days? >> one of the biggest tech innovations has been out of coca-cola with the freestyle machines. i don't know if you have been -- seen them your self. you can put over 150 different varieties of cola combinations. considered possibly a game changer in terms of how soft
drink companies are going to serve customers. pepsico says they are working on their own machine. cap and testing those out as well. there is a good and the bad. you get a lot a variety. machineso to the and mix all these soft drinks together. that part of it is, something she does not want to copy coca-cola and is that too much customization or too many -- that could end up confusing consumers. she is on that same path of using technology for customization, but worried about that as an answer to the beverage market problem. >> in terms of the social media rivalry come i just take their put her accounts. they are neck and neck. >> pepsico has a bit of an edge. 2.5 million twitter followers.
coca-cola has 2.4. according to one benchmark, coke has rapidly generated more followers than pepsico. they have a lot of work ahead of them. >> betty liu, our in the loop anchor inside pepsico. thanks so much. one of the most highly anticipated tech ipos of the year may be delayed. that is still ahead on "bloomberg west." you can watch a streaming on your phone, tablet, bloomberg.com, apple tv and amazon parity be. -- amazon fire tv. ♪ >> is 26 minutes past the hour. bloomberg tv is on the markets. let's get you caught up with where the markets are trading. markets are swinging between gains and losses today. high.w near a record
>> you're watching "bloomberg west." i'm emily chang. ipois holding off on an until at least june because of the downtrend in the tech stock. it's march 24 ipo minted could've have gone public as early as last month. leslie is in new york. tell us what you know about the conversations that happen happening behind the scenes and how they came to this decision. >> box and the bankers are looking at today's markets and goneg, we could have public this month. why not wait until the markets are a little more stable? ,e're seeing a lot of the ipos
especially the tech ipos, perform down after goingpublic. untilbox's case to wait there is renewed favor for tech stocks in general. >> would've the markets aren't stable by then? nobody knows how this will play out. >> that is the risk. depends on what a company needs to go public for. for box, it could be beneficial for them to wait. wait until the market stabilizes. we've seen the tech stocks run out -- calm down a bit before box decides things are more calm and investors have a renewed appetite for cloud companies. andhey can afford to wait afford to do their ipo wind that does happen, that might see them better. other companies do need to do their ipo sooner than later. for example in aries doing their
ipo this week. weibo before that. they had to do downsize ipos. they got the deal done. a date wasaying never set. what do you make of that comment? >> typically what happens is these companies will close their perspectives, which they file confidentially. they have less than $1 billion in revenue. it is able to file confidentially. when those financials are disclose, they have at least 21 days to start their roadshow. the key words there are "at least." that gives the mets much time as they need. they never planned an official start date for that roadshow. they never set a schedule for when they would begin. there was no official delay. they're just technically holding off until the summer, when things look a little better in the market.
>> leslie of bloomberg news. thank you very much for that update. stripe, a growing number of players and digital payments. there are many of them. check is one of the mobile payment apps that is quickly gaining traction. it it could be an acquisition target. is it possible the $20 billion bubble payment industry as a whole is actually losing steam? joining me now is an early investor in tech. thank you as always for joining us here today. >> pleasure to be here. >> tell me more about check. it helps you pay your bills, right? >> 10 million people have downloaded it. millionmise to and 50 -- >> among the competitors come into it -- >> we do not comment on rumors
and speculations. we are excited to be the largest investors in check. check'sdo you think is future? it sounds pretty simple. payments sound simple but is quite compensated to make sure that you can pay your bills from any account you have in a very easy way. is make theas done easiest way for you to pay your bill from anywhere. >> what about the broader mobile payment landscape? >> the challenge -- there are $15 trillion of transactions going through their. three percent gets lost. everybody's trying to go after the space. you have big banks and beside mastercard who all have leverage? stageot clear how early
competition can win this case. >> there have been reports that square is looking for a buyer, but maybe can find one at the valuation that it recently raised. what you think about a company like square? >> square is an innovative company. they have a great design and came out early. what they're trying to do is side with players, like banks and beside mastercard. it's going to be a tough battle. >> what is so tough about it? i see a lot of merchants out there with their little square. >> there is existing system in which people are able to make money. keep their want to economic spirit square has to figure out a way to displace one of them to create value for the consumer as well as for themselves. >> who wins the mobile payment business? would always be paypal -- will it always be paypal? integrate aho can
full value system so that from a consumer to the merchant is a very integrated experience, it will be similar to the music industry. when apple came out with the ipod, they created an experience that was beneficial for everybody. we need somebody to do that mobile payments. >> has anybody come up with the ipod for mobile payments? >> not there yet. people -- paypal has an early lead. >> what about apple and google? google wallet has not been super successful so far. they are the two giants. >> my bet is that apple is very well-positioned to this -- to do this. i think apple is an eventual winner here. when it happens, i don't know. >> why? >> they own the consumer experience. they already have the phone, the wallet.
they will be able to come out and figure out a way to work with the banks just like they did with the record labels and figure out an experience that creates valley. notome record labels were too happy about the way it worked out. thanks for joining us. how can the government disrupt the technology? elon musk is fighting bureaucratic battles on three fronts. we will have the latest, next on "bloomberg west." ♪
>> them emily chang. this is "bloomberg west." suing theays after federal government, space x has won a temporary injunction from blocking the air force from buying russian-made rocket engines from the joint boeing-lockheed martin venture. they reached the decision after considering published -- public interest. excuse to the government of
creating a monopoly by shutting it out of the market for satellites. -- you on musk is only one of the bureaucratic -- challenging also various branches of government with tesla. all three of these companies have benefited from substantial government support for the development of the technologies and ongoing tax incentives. cory johnson spoke with the co-author of big bank disruption love-hate's relationship with the u.s. government. he asked that they should be government subsidies for merging technologies like those musk received for tesla. very early technology, and
make sense to fund that because otherwise it might not get started. once it has gone commercial, certainly solar has reached that point, it does not need this level of government involvement anymore and is now actually becoming counterproductive. neededhis businesses government support? >> they have all used it and he did it. you can imagine doing space exploration in the 1960's without government. >> he is doing it in 2014. receiving hundreds of millions of dollars in nasa grants to get the business up and running. now, we have reached a point -- certainly not solar and electric vehicles. there's no need anymore for government incentives. if they are getting in the way. tesla is best known for -- they make a cool card.
.t is for millionaires car.very cool it has benefited from hundreds of millions of government grants. >> now, the fight has come down to how it gets sold and distribute it. he's running into these regulations that were put in place 100 years ago to protect car dealers from aggressive manufacturers. we all know, the car dealers are not protecting consumers. better the slightly loved than cardio is. it has gone from protection to protectionism. that is what is behind the fight. he's fighting new jersey and other states as well. the grants they have gone from nasa and tesla, what about solar city? >> this is an example where
asar energy, when it was expensive as it was an carbon fuels were not as scarce as they have now become, it needed some help. needed research help. that has long since gone. we don't need the grants or the tax incentives. we don't need the direct svestment in things like olyndra. these are not any longer good interferinghey are because you have companies like solar city that are so focused on maximizing the tax breaks and subsidies, they have built their entire business around that. than selling the materials to consumers. they are so focused on maximizing the revenues from government that they are no longer really in the business of disrupting energy. that is what we really want them to do. now that solar power can be
built cost-effectively and carbon fuels get more unpopular and scarce to use, there are trajectories -- they don't need that much help. >> doesn't elon musk run the military for the the way the award the contracts to lockheed martin or pursuing pieces of the car industry when trying to get his car sold in places where it is not allowed to be sold? >> it only takes -- part of the government you're dealing with when you are litigating and the part of the company were fighting are so far were moved. it's not a big risk. it's a necessary evil to have to litigate. it's part of the way disrupting these industries -- technology is a big piece of it. you have to go the other route as well if you're going to break it open quickly. of big bank
>> welcome back to "bloomberg west." google is try to make it easier for advertisers to reach their target audiences on youtube. the company announced a new product, google preferred. youtube's new front. a presentation to advertisers in new york. jamie explains what it is. >> advertisers have always told us they want us to help them. advertising on youtube easier. we created google preferred, which is the top five percent of channels on youtube in 14 different categories.
what that does is help advertisers find the content shapingmost popular and pop culture and the content that is growing faster. >> youtube also says it is going to invest heavily in building up the brand of its various youtube stars. string service who also presented to advertisers this week and announced its own model. -- hulu. youtube, alighted lu.l, yahoo! and hu it's about different ways you can advertise, including this initiative between pizza hut and hulu. you can actually order pizza by watching hulu. here's how it works. youn the case of pizza hut,
can be watching your show and the ad pops up at dinnertime and you say, ok, let's order pizza and you don't have to click away. you don't have to open another browser. you place your order and when you're done, you close that up and you resume watching hulu. >> i imagine you guys have done some testing. want to make any early guesses on how much pizza is going to end up getting delivered through hulu sales? >> it's about serving the on-demand audience. they want the content when they wanted and want to be able to buy what they want, when they wanted. it's going to be a popular unit. >> when you guys hold an event like the upfront, very clearly , because offront your ties to television and the belief that the shows you guys are doing our very high quality -- deadbeat is a show you guys
extended for another season today. isthe language we're using all about the fact that we are competing for television dollars. the majority of our content is longform. we get content from broad cast providers. conventional, longform television competing with elevation competitors had to head when we go and chase marketing dollars. that is why we are saying up front because that is the model we play in. >> the number of people who are paying for a subscription to hulu has been climbing. you focus a lot of your time and energy on the advertising dollars. in 2012, the goal had been to work with 1000 advertisers. last year, about double that
amount. what is the goal now? >> our current number, we are over 1600 advertisers. toon't really have a goal grow the amount of advertisers. i do have a goal to grow the amount of volume we get out of those advertisers. we work with the fortune 500 and fortune 1000 marketers that you see on broadcast television. i don't need to go deeper into a mix of advertising. i want to go to the biggest marketers in the world and continue to earn their share. the adou guys bring supported version of lulu to mobile devices, that does open the door to try interesting things. tell us about the steps you're working on. the 360 appearances. ♪ the 360 at is something we are partnering with a company immersive media on. that is something you are consuming lulu on a tablet --
hulu on a tablet or a smart phone and the places you in a virtual world. it the first proof of concept we have places you in the front seat of anonymous be a law and when take your device and seems as if it you're looking through the lens of that device and see the interior of the car. it's an interesting way to take advantage of the mobile devices and present a form function commercial that fits the device. >> at the end of the day, would you say we are now at a point where you are in a position to take advertising money that would have traditionally gone to a broadcast network -- you have a very strong ties to that world. is the money coming to you guys that in the past might have gone to traditional tv? >> i think companies like hulu -- we are taking money
from conventional television budgets. are beinge budgets sandpaper away from segments like display advertising. even from print to a certain degree. i want to talk to you about the latest on the clipper situation. i know you have a bike for us. us. byte for >> it will be five. there are no fewer than five big names that have come up in the potential bidding for the clippers. the latest name, a very well-known player in the name of music. a longtime manager of the eagles. confirmed that he would be interested in bidding. you see pictures of oprah
winfrey and magic johnson. everybody's positioning themselves for the potential sale of the clippers. >> any fan favorite so far? may be that is what they're doing. putting it out there so they can see what the reaction will be like on twitter and to gauge who should team up with who. it does feel like you might see a variety of names who team up in one powerful bid. it might not be unlike what we saw with the dodgers where you had some big financial investors and some big names in the community like magic johnson. still early days. >> game six tonight. the clippers are in the lead. we will be watching. jon erlichman, thanks so much. aggie will for watching this edition of "bloomberg west." we will see later. -- we will see you later. ♪
>> from bloomberg world headquarters in new york come i am mark crumpton. this is "bottoml line." today change in the driver seat. alan mulally announces his exit from ford. then, janet yellen says we are not done resolving too big to fail. today bloomberg tv takes you inside pepsico. to our viewers in the united states and those of you joining us from around the world, welcome. full coverage of
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