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tv   Bloomberg West  Bloomberg  May 20, 2014 6:00pm-7:01pm EDT

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>> live from pier 3 in san francisco, welcome to "bloomberg west," where we focus on innovation, technology, and the future of business. i'm emily chang. tabletosoft calls it the that could replace your laptop. they unveil its new surface pro 3. it has a 12 inch screen and $799 price tag. large and expensive to make a dent in the market? chad dickerson is here to talk about the new wholesale pot form and whether it will be going public anytime soon.
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worst is a check on your bloomberg top headlines. salesforce has reported a gain rst, aes in the -- fi check on your bloomberg top headlines. salesforce has reported a gain in sales in the first quarter. professional services and other revenues climbed. verizon ceo says reports of the company acquiring dish are a fantasy. speaking at a conference, they say there have not been talks and there will be talks with dish. speculation took off after at&t and directv struck a deal to combine. is suspending its involvement in a cyber security working group with the united states. this comes after the justice department charged five chinese officials with corporate espionage.
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now to the lead story of the day. tried again when it comes to tablet. the unveiled surface pro 3. >> ladies and gentlemen, this is the tablet that can replace your tablet -- surface pro 3. - weith other b- thought there would be a surface mini, but instead, a group. it will cost $799 and hits stores tomorrow. microsoft faces an uphill battle with its tablet. leading with more than 32%. cory johnson is at microsoft surface event in downtown manhattan. this is microsoft's last chance charm.rd time's the what this is about.
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they are trying to nurture these struggling devices. is rightt attempt here. it is a little bit smaller and lighter. cool and stylish pen or whatever. the most interesting thing is the way this device is being positioned. this isn't just a tablet. rather it is a productivity device to work with other microsoft software. could replaceg it the laptop. it puts microsoft in direct competition with companies like dell and lenovo. listen to what dell had to say about that. >> we're not interested in competing with them when it comes to hardware. create, our goal is to new categories and spark new demand for our entire ecosystem.
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that is what inspires us and motivates us with what we are doing with our devices and hardware. >> they may not be interested in competing, but with this device as the anti-laptop, they are in fact impeding with them. it is an interesting dynamic we will keep an eye on. >> you got to play with it. will people want to use it to replace the laptops for $800? an interesting device. people are using more and more their laptops -- i tablets. they say some i complain about this thing, they recognize this has a small market share that it is not hurting. coupleid, selling a million a year stressed out up to something. i think by pitching this is a
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productivity of ice that uses all of the other microsoft software on the cloud, maybe they have got a better shot. >> i read a report that microsoft lost money. why bother? >> i think they feel they have got to have something in this arena to offer to their customers are customers that want to be in tablets. they need to have something there. their partners are using other software such as chrome books. that said, that loss was not expected. they had to write down the cost. they had to eat so much of the costs by lowering the resale price to get it off the shelves. they will try it again with this new version. >> cory johnson, our editor at large at the microsoft surface york.unveiling in new
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with microsoft trailing and share, both apple and some sand --samsung tablets my guest joins us from boston. he works at a consulting firm. you do a lot of work, specifically on price. is this device price right? emily.t of all, hi, the pricing strategy is very strong. first, it is a great value to consumers. second and more importantly for microsoft, it leverages some of the assets that it has in a competitive way that will be hard for competitors to replicate. it is sort of a win for consumers and a win for microsoft strategy. it is a good strategy. make have seen microsoft some pricing mistakes when it comes to the xbox.
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they have priced it higher than the ps4. they have got a slim down, cheaper version. are we seeing a pattern here? >> they clearly made a mistake with the xbox. what is interesting is that they are moving to a razor blade model for their tablets. the razor blade model basically says to get the razors in just many consumer hands as possible and make money on the blade. ,icrosoft has come out and said we are knocking to make any money off of the tablets. what we will do is make money and cloud apps services. you have got a low price. $799 relative to the macbook air. they are positioning this as a savings. astead of buying elaborate -- laptop and a tablet, you can just get this. they're making money off of its other assets which is its apps.
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this is a strategy that competitors cannot replicate. it is an all-around win for consumers and microsoft. >> that is assuming that consumers believe this tablet is comparable to a macbook air. is it really? microsoft has lost money on every tablet it has sold. maybe there is a product -- problem with the product. >> that is a great question. from a pricing strategy, it makes sense. the big question is if consumers -- if microsoft can convince consumers this is a 2 for 1 replacement so to speak. >> interesting. are you convinced? >> i don't know if i'm convinced. the press conference was very innovative. there was a lot of height. there is a larger screen, 12 inches. it does make sense that in the future, tablets will replace laptops. betting to see if this
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is the product that makes it happened. what is good about it is that it really does leverage so that the office suite they are known for has a good chance if they marketed correctly. >> at any point today consider dropping the price? when dropping the price be an option? >> it could be an option. glance, it seems cheap. if i were them, i might have had a higher price. whenis interesting is that they came out with the xbox pricing in late november, they were very cocky and they thought that they could charge a premium. xboxerhaps lessons from has brought them to the pricing here. towas a very good value consumers if they believe that this tablet can replace both
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laptop and serve as a tablet. >> interesting. so much. a little later, we will talk with the corporate vice president of microsoft about today's surface announcement. ♪
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>> i am emily chang. stream "bloomberg west" on your phone, tablet, and on bloomberg tv. comcast and time warner cable rent at the bottom and customer satisfaction for companies offering subscription tv had 60% of comcast people and time warner cable just 56%. universe tiedat&t for the highest customer satisfaction in the industry. at&t just announced that it has reached a 48.5 billion dollars deal to buy directv.
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proposed at&t the and directv merger is one of the hot topics facing tom wheeler on capitol hill. peter cook is on the hill with more. we are hearing it from all sides. >> he was hearing it from all sides. they said that the chairman had picked up a dust storm in his brief months in the sec. he was hearing from all sides. -- both sides have worries. there are worrying that they might charge more for faster traffic. >> i don't want this to become an auction in selling off the best.
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some pay for faster lanes and others can pay get stuck in the slow lane. >> the internet has flourished under the current light touch regulatory scheme. >> wheeler is not satisfying either sides of the court. he weaved and dodged a lot of these questions. he made clear that he wants to make sure that internet stays open for everyone and he didn't rule out the possibility of the faster content deals. >> there is one internet. when the consumer buys access to the internet, they are buying access to the full internet. that is what our rules attempt to detect. -- protect. making clear to the lawmakers he will hear a lot
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of comments over the next four months before deciding along with other commissioners where to end up in the rules. it is still a work in progress. neither side is quite satisfied with what they are hearing. >> what about the directv and at&t deal? >> he was asked directly about it and the merger question about consolidation in the industry. he said he would review this deal as well as the comcast deal i would not weign -- and would not weigh in. he is not tipping his hand at all. >> peter cook, thank you for that update. what impact will all of this have on the companies creating the content? next onhear more "bloomberg west." ♪
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>> welcome back to "bloomberg west." i am emily chang. this company is giving programmers something to think about, including disney. we ask the disney cfo on the at&t and directv deal. >> whether it is that merger that might happen whether it is the comcast and time warner cable merger, it is no surprise to us there is some consolidation in that table space. we have strong relationships with all of those companies that are involved in those mergers. we are in the process of analyzing and understand how that will affect the ecosystem down the road.
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we do not have anything strong we want to say about that. we look for the implications to us. it is early days for those announcements. >> what about when it comes to acquisitions you guys make? you explain the marvel acquisition. there was integration. art of your job involves bringing these companies together. i think you have said in the case of marvel, a different of doing things versus the way you guys do. lucas films brought you the star wars brand. what goes into the behind-the-scenes process of bringing these companies into disney? >> we have done enough acquisitions and successfully integrated them to have a real point of view. first of foremost, there is a user interface. the user is either the end customer or the employee of that company.
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we like to leave the user interface in place as much as we can. andike to keep pixar pixar marvel marvel and so on. we like to keep them that way and not use what has been successful for disney or espn2 wash over them like a tidal wave. we buy companies that are already well run and that we can and move itp further through our ecosystem. and ther interface world and the employees of those organizations, we like to leave that in place. that has worked extraordinarily well for us. acquired 8 years ago. it still looks and feels the way it does when we bought it. we don't want to break that. that was the disney cfo with
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jon erlichman. twitter is in talks to acquire a music sharing site sound cloud. it has millions of users. musicri is eyeing other services. guest joins us with more. what do we know? are still these talks early stage with sound cloud. anyone is looking for can help them think about the future of the music strategy. they have their own wood or music app -- own twitter music app that has been shut down. they have to figure out who to bring on and whether they can build internally or externally. >> we spoke with the ceo of
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sound cloud last year. take a listen. broaderi look at the scope of what is happening with media online, the interesting thing is what youtube is doing on the video said. it is dramatically different from applications that apple does. --re are over is something that makes use of internet in a different way. >> sound cloud has more users than twitter. why would it make use for sound cloud to sell to twitter? >> twitter went through an ipo recently. they have to figure out what is the most efficient way for us? >> is this an efficient way? >> they could help them. twitter has been successful in the entertainment industry,
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especially the tv and celebrities. music is one of those things that has propelled other tech companies to greatness. apple with itunes and youtube has been very successful for google. >> and understand that a lot of users on twitter share their favorite songs and they do so via sound cloud. this sound cloud one to do this? >> it is hard to say. it is early talks. we would assume it is a little bit more than $1 billion. somewhere in the billion-dollar range. it is still unclear. twitter would help sound cloud with marketing. it is very widely used. >> how does sound cloud help with some concerns about user growth? >> i think sound cloud is more of a mainstream service like my
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mom would use twitter. she does how to stream music. twitter has become difficult for people to use. you need to figure out ways to get into this core usage of the mainstream. >> thanks so much. we will be watching those talks. >> thanks. >> instead of going smaller, microsoft is going bigger with a new tablet and a 12 inch screen. we will talk to the man behind the marketing strategy next. ♪ >> time for on the markets. i am mark crumpton. sportingnd dick's goods fell and home depot went up.
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let's check the boards. industrials fell. the s&p 500 was off by 12. the nasdaq rocked 28 points.
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>> this is "bloomberg west," where our focus is on technology and the future of business. i am emily chang. want to get back to microsoft's launch of the surface pro 3. cory johnson joins us with more. candace tablet really replace your laptop? -- can this tablet really replace your laptop? tablet --ion of this wenk you for joining us -- can assume it is the same device, but a little bit better. >> no, this is definitely a
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brand-new device built from the ground up. surface pro3 -- surface pro 3 is a full pc. it is this then. inch.a third of an it is super light an incredible screen and is a tablet. >> you are the marketing guy. the marketing is different for this device. tell me about that. >> what we have been trying to do as a company is to find out how to bring a unique point of view to really differentiate and address the issues that our customers have. have ange of people who ipad also have a laptop. we are tiny do something no one has ever done before and that is to create a device that has productivity to get things done. >> tell me about the productivity. i was talking to an analyst who has been covering the company
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for a while. it ties in with what? into our vision as a company that is focused on helping people do more and be more. it is around productivity that we say to take the power of the cloud software and devices and create an experience that helps them be more productive. style isk the intriguing. three eminent productivity scenario. you are a student or a business professional anyone to write down notes. many use pen or paper. screens.lots of watch what we can do. here is the tablet. one click. up.t one note popped i can take my notes. one more click and it is saved
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up to the cloud and it will upload to all of my devices whether it is an iphone or android device. you get this rich display of all of these graphics and beautiful pictures. all of that with this productivity so you can write. >> and the screen resolution. >> it is one of the best we have created. i guess -- high depth screen. anti-glare. that is pretty fantastic. when you go to the laptop factor, you have full windows. you have all of microsoft office. adobe photoshop. bringing great dividend to the device. bringing creativity to the device. >> where has the surface have the most success?
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we know the revenue numbers. what arenas have we seen the most success? surfaceost success for is the productivity. students of any kind of homework to do. they want to be able to edit and write notes. business professionals need to be on the move and take note to be productive. they can be architects. >> what is the number one channel of the surface and how might that shift or change? >> we do pretty well across the channel. we have microsoft stores. we do pretty well there. me -- is there any nokia magic in your? >> it is probably too early for this particular release. brings a lotokia
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of strength. we have had a lot of discussions with the new folks who have come over and the new ability team -- mobility team and how to work across phones. do you bring from xbox to this? what sort of experiences? best is it wasn't until we build the xbox that we understood the magic of hardware and software to really break through graining. -- gaming. that is what brings us here. vision as a company is to do the complete experience for any user productivity. includes the power of a laptop and the use of the pen and
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tools. politico from campus mode to consumption mode -- it allows you to go from canvas mode to consumption mode. >> what is it that makes this business so crucial to microsoft? thesewant to build unbelievable experiences that do not exist today. dot we are trying to do is something where uniquely capable of that others in the market are not. that vision of how to make people productive across the cloud and microsoft office and the hardware, that is a big product. >> intriguing device. thank you. >> cory johnson, our editor at large in new york. etsyandmade marketplace is scaling up. can they redefine handmade and keep its customers? ♪
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>> i am emily chang. ons is "bloomberg west" bloomberg television and streaming on your phone and on created an online community of artist entrepreneurs. they are on the brink of change with billions of dollars on sales it last year alone. is crackingcompany new strategies for wholesale platform and a mobile focus. i guess joins us now. now. guest joins us >> great to be here. >> how do you see yourself in terms of growth? in 2013 inillion sales across the marketplace represents over one billion --
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one million sellers. we are bringing more and more small artist to the marketplace. when you have one million sellers all around the world. it starts to add up to significant numbers. >> and you take a cut of everything. >> betake a very small cut. we sell something on etsy, etsy takes a tiny percentage. our sellers are all over the world in many countries. our platform is distributing money to artists all over the world. >> you recently redefined what in that to be handmade they are less handmade than they used to be. explain that. >> we updated our policy. since 2000 with etsy and eight. the finding had made was very difficult. it three principles and
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idea is whatever you make has to come from you. you had to take responsibility for the whole production process. if you use any help whether you hired people, you have to disclose that. what we have seen when updated , theolicies is our sellers vast majority use production that is fairly local to them. 80% of our u.s. sellers are using outside production in the same state. we see this as part of our community building strategy and really making community stronger. >> you are also looking into wholesale. -- could this change in a bad way when it means to come to etsy for me as the buyer? >> we are supporting our sellers and helping them grow. our sellers on etsy have always done wholesale deals.
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online retail is really strong, 90% of retail still happens off-line. the way we see it, we are helping sellers bring their goods to new customers off-line and in neighborhoods and communities and supporting local boutiques. what we're doing is take a special interest in etsy and distributing it out into other retail. madeviously this stuff is with love and care. you cannot always get what you want right away. >> right. it is important to know that etsy is not impeding purely on convenience. we leave that to the other e-commerce incumbents. people on etsy are worth waiting for. yes, you will not get the wooden watch i'm wearing right now overnight. when you get it, it will be incredibly unique and something that you cherish forever. >> talk about some of the e-commerce players. i wonder how you see them. as competition?
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entary?y complim aswe see pinterest complementary. they have done a good job of inspiring users. etsy is the most re-pinned domain on pinterest. we see it as being a couple mentor he ecosystem. etsy is incredibly popular on pintesrest. >> what about facebook and twitter? they have been trying to do commerce. some say will never happen on facebook or twitter. >> facebook and twitter, i don't see them as e-commerce platforms. on etsy, easy a lot of traffic from social platforms like facebook and twitter -- you see a lot of traffic from social platforms like facebook and twitter. in terms of etsy, it is good for
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us. the things that you find on etsy are very unique and shareable. they contribute to the ecosystem that we represent. youne of investors says will be ready for an ipo in a year. is wellsaid etsy positioned for an ipo. i agree. we have been profitable for five years. we are in no rush to go public. we want to build a company that builds 100 years or more. years or more.00 possibility, but not something we're focused on this year. >> you are also becoming a b cor p corporation. you could be the first b corp that goes public. tell me what that means. it is a third-party based out of new york.
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they test you basically on how you treat the community, employees, and the environment and you get a score. we are a certified b corp. it means we believe business can and should create business goods. -- the social good is built into the business model. 3.5% goes to etsy, but the rest goes to the community. you can become a legal benefit corporation. it is distinct from the certified b corp. >> you guys have done so much to grow the maker movement. how much do think the maker movement can help the overall economy? >> when we look at etsy, etsy represents a whole generation of mike -- micro entrepreneurs.
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they are generating an economic impact. it is billions of dollars around the world. what we see is that with largelys like etsy, women come 80% of our sellers are women, are able to start their own businesses and reach a global market and generate supplementary income for their families. 18% of etsy sellers sell full-time. it is an important economic impact. >> all right. etsy ceo, we will keep our eyes on you. thanks for joining us. coming up, ever wondered what ofpened to the original car this model? a chinese billionaire says he you will die to bring the brand back to life. -- he will try to bring the brand back to life. ♪
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>> welcome back to "bloomberg west." i am emily chang. this company eventually went bankrupt. now a chinese billionaire house about to burn every dollar to resurrect the fisker brandon even challenged tesla on its own turf. we find out about this international alien or battle going on. llionaire battle going on. >> the person story is great. owns ane billionaire auto parts business in china. it is a huge business. he has over $3 billion. he is really excited and vowed to not only burn every last dollar, but he is 59 years old. if you dies, his son will take over the fisker brand.
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and if you dies, the grandson will take over the fisker -- if he dies, his son will take over the fisker brand. and if he dies, the grandson will take over the fisker brand. maybe he is not as laser o.p.s. -- focused. >> tesla -- >> that is true. i have driven a tesla. i really enjoyed it. a quality built car. there are pictures of me flying around in a model s. but it does not look as cool as the fisker. a designr was phenomenon. a lot of people were fans just from that standpoint. look at how many people loved the delorean and it was a horrible car. this chinese billionaire him if he can find a way to make these cars perform well, i think he will have a lot of success. >> what can he do differently?
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>> one of the interesting things is he can make them in china and probably can rely on help from the chinese government. elon musk wants to -- >> right. >> it is a bigger business for him than in the u.s.. tends to back it hometown heroes more often than foreigners coming in from abroad. he might have the advantage. the other interesting thing he can do is with the purchase of the fisker brand, he also gets an abandoned auto factory. he could be the first chinese automaker to produce successful cars. it would be an interesting story on its own. a chinese carmaker coming here and creating jobs? >> when does the showdown start? how long will it be before he has a new car on the road? toit typically takes a lot
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develop a new car. that is a process that could take five years. he has got a head start. he is a lot of patents that he got from fisker. dozens of patents that hums from -- he has got the design. he needs to make the car work better. as the technology progresses and people learn more about what makes tesla great, it is easier to copy that technology and use it to make other electric cars great. bmw has the v8. there are a lot of different options he could look at for inspiration for the technological aspect. >> it will be fun to watch. matt, hang on. a bwest byte, one number that tells us a whole lot. >> how about 800? thisis the weight of
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device, the surface. nds?00 pou [laughter] >> a little bit heavier than matt miller. >> it is lighter than the macbook air. is this a comparison to another tablet or comparable to a laptop? microsoft is trying to change that story today with this announcement. >> 800 grams. >> but if you add the weight of the operating system -- >> what about that? the software. >> the apps are issue. withs is easy integration the microsoft office. it is a big deal to those he is microsoft office. use microsoft office. there is nothing like it. this stuff runs things a little bit better. it is a selling point for sure.
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>> i haven't gotten a chance to see this new surface pad first hand. i know a lot of people who love it dearly. >> you do? >> yes. them.l crompton loves 1e operating system of xbox that i have and use a lot, it is incredibly difficult to use. it is a clunky os. it is an absolute nightmare. i do not know where the back button is. it does not work as well as xbox 360. hopefully they have improved on the ground. >> i'm actually in shock. i had to ask the person what the expense was like hearing they were like him it is great. -- like, it's great. there are very few people who have it. that is the problem.
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that is cory johnson in new york. thanks, matt and thank you all for watching the show. ♪ .
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>> welcome to "money clip." i'm adam johnson. taking a look at today's menu. medvedev has says the new cold war is at stake. go pro is going public. it is a great opportunity for us to show you some videos that will make your stomach turn. gender at work. how the new york times shows there is difference for women and men in the office. katie couric's food fight, taking on the industry. we will close it out with some brew.


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