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tv   Bloomberg West  Bloomberg  April 11, 2014 1:00pm-2:01pm EDT

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>> live from pier three in san francisco, this is "bloomberg west." it has been a rocky time in the market with tech and media stocks selling off big time. will it cause some companies to have second thoughts about going public? the latest edition of the samsung smartphone goes on sale today and we will look into whether they galaxy s5 will be a game changer. let's check your top headlines. alibaba is buying chinese map
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and navigation company for $21 per share. pointkeover value is one $5 billion and alibaba has been trying to expand its services. it will allow alibaba to pete withbaidu maps and other services. sales tour is believed half of the office space in the tower. it will be renamed cells first tower and the company will pay an average rent of $85 per square foot which is higher than the rent in the peak of the.com era. it will be the tallest building in san francisco once it's completed in 2017. sony is telling consumers to laptoping the biofit because the battery can overheat. there have been three cases where the panasonic made battery caught fire and this comes as sony prepares to sell its bio
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business. been bouncing around today. it is flirting with small gains and losses after huge selloff yesterday and it has been a very rough month for technology stocks with the nasdaq topping about six percent. we have seen a wave of techipo's but the question is, will the selloff give other tech companies pause before going public? cory johnson has more. companies like alibaba and others are preparing to go public very soon. will this hold them back? marketvoid the stock show a lot because we focus on the businesses. when we have a significant change in the market, it will affect the way companies invest in themselves and whether they decide to do an ipo. if you are a young company and you are flowing in,
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thinking you can build your business and spend. conserving cash can expect the entire technology community. >> we have been talking to investors and we are hearing they are starting to pay attention to the ridiculous amounts of capital flowing in and the public markets could slow them down an earlier stage company ceo's are looking at this, too. >> does that change this week with the public markets cracking the whip and saying the days of this kind of money is going away. . >> who has been hardest hit? the drops and some of these stocks i went through today and some of the names are a dramatic list of companies. these are companies that have seen dramatic falls in their stock. the big names like china mobile, splunk is down a lot
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-- thatr city, pandora is just 30 days of selloff between 30%-50% for these companies and these are significant companies that have market caps of over $500 million. >> we also took a look at the companies we talk about most often like ogle and yahoo! >> they have had significant drops. google is dramatic because it is such a cheap stock. look across the hot sectors like 3-d printing and electric cars, both are down significantly. netflix has fallen in the last month. n is down 21%. really dramatic drop-offs in the last month exacerbated by yesterday's selloff. been, as the markets have three percent yesterday might
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not seem like the biggest the client. when you talk about 30% for the most exciting names and technology, it's staggering. >> we've got a special roundtable to discuss this. leslie packer is with us as well as max wolf. both of them are in new york. how worried are you about this? is this the beginning of something worse? >> we are paying attention as everyone else is. we are seeing a big correction and some of these names are in technical bear territory. the growth story does not look like it has rapidly -- it has radically altered. these selloffs are against market record territory where people were breaking records. we think there is a macro structural element. risk money ran out of the market in 2013 and found its way to momentum and now it is finding its way back out. we don't think that is great news in the short run but it does not really signal a
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structural shift. >> talk to us a little about the psychology of the momentum and the psychology of losing momentum. >> with the ipos in the tech sector, a lot of them have no earnings and little revenue so investors buying into these companies are doing so on the prospect of growth. especially momentum, they buy in thinking they will get that pop. they might get a 50% return on one day of investing. you see the momentum come out of the market with amazon and yahoo! that sends a signal to companies looking to go public that think they can convince investors to buy shares on this momentum play. it is easier to sell off with the momentum on the downside than to return it on the upside. it will be interesting to watch. it is a little clues -- too close to tell where we are in terms of the ipo market. signal.tainly is a
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>> to say the least>> season, we have so many big deals about to come down the chute not least of which is alibaba. will the market look at these deals and not be able to digest them? it's difficult in terms of pricing. a lot of these companies look at their publicly traded comparables. commercere an e- company, you will price your shares based on where amazon is trading. amazon is down tremendously. that will impact the amount you're able to raise in your ipo. it will also impact the ipo discount to get investors to invest in shares. this is a cheaper way to value shares in order to get investors to buy in expecting the first date pop. when markets look like this and volatility picks up in the market starts tanking come you have to give investors a bigger
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ipo discount which cuts into your proceeds. for the very first time, we have been asking investors and entrepreneurs if we are in a bubble. one venture capitalist finally said yes. that was george zachary. do you think we are in a tech bubble? >> there are some valuations that are impossible to defend and there are some great deals out there. leslie makes a great point. there have been some enormous valuations applied when large public tech companies use their expensive stocks to make acquisitions. what we see happening is when the expensive bid up stocks like facebook are used to make somewhat outlandishly valued acquisitions, it has a ripple effect that pushes up the ua shins. -- pushes up valuations. valuations are consistent with strong growth stories that are attached to better names but maybe not stratospheric on all the names and not quite as stretched in
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the first few months of 2014. big companies using their stock to make ridiculous acquisitions -- facebook does not come to mind at all. >> certainly not. >> if you are a private company with a startup ceo and you see the public markets reacting like this, should you ignore it? what lessons might we have from the past? should you change your capital allocation plan? >> that's a great question. the best answer is you should be focused on your business. if you are focused on the multiple and a pie in the sky billion dollar strategy, you're probably not running the company as well as you should be. great growth stories and great ideas will always have a market. they may not have a 40 times havengs market or they may
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25 but we are nowhere back up to the 50 times revenue we saw during the dotcom zero. the best stories will win out in the end but the also-rans in some of the estimations of value which should be a casualty of any return to earth. we can always get ahead of ourselves. even if the process is not fun, it's good to get back to your feet on the ground. so -- thank you both and we will continue to follow what is going on in the markets throughout the day. coming up, from tv shows to priceline commercials to mobile apps, william shatner has done it all. the legendary actor will join us to talk about his new project coming up.
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"bloombergback to west." bug has beenity
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found in hardware connecting homes and businesses to the internet. cisco and juniper networks internetworking products are susceptible to this encryption bug all heart bleed. -- called heart bleed. this flaw could allow hackers to gain access to personal data and logins and passwords and other sensitive information. we are joined by jordan robertson. a new development is that this bug is in millions of android devices? >> every day we learn about more devices affected by this bug. what people did not know initially as we thought about this as a web server bug. facebookd google and needed to pass their service but what was not known is that a lot of pieces of hardware uses vulnerable software. yesterday, cisco and juniper their hardware and software and today is android phones. it's an older version of the software but many people still use it.
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the even -- they either have not upgraded but it affects millions of devices and it's the responsibility of the handset makers and the carriers to push out the patch. >> are they on the hook for damages? >> the way android works, except for google own devices is if you have a samsung phone, google puts out a pass for android, samsung is responsible or your wireless carrier is responsible or posting that to you. >> -- for pushing that to you. let's imagine that my phone got hacked and i have a samsung phone that did not get an update, our samsung and verizon going to be on the hook for losses? >> is an interesting question. google was asked about updating their own services. this is the weak link. it's harder to attack a phone versus a website. you have to do it one by one but it means that samsung and
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verizon and at&t are the ones responsible for fixing these devices. >> what about the cisco juniper? >> these are the guys whose equipment are the guts of the internet. the things go wrong with devices, those need to be fixed quickly. >> how do you fix them? >> you have to apply a patch and it is a similar situation. you have to do the patches one by one. one person has to download the patch for a device or one router owner to download the patch for his or her router so it takes longer even if you are diligent. it is manual labor to do these updates. onco and juniper are working patches and google already has the patch for the android but it takes a long time to get the patches out. user, are an android upgrade to the latest. >> thank you so much. keep us up to two. -- keep us updated.
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goes onung galaxy s5 sale today in 125 countries offering lots of incentives, up to $600 in freebies including a linked in premium account and paypal vouchers. the company's time to stand out among its competitors including apple. >> also chinese phone makers. it will have lots of free stuff and we have sam grovbart. >> this is an incremental improvement over the s4. take any feature in the previous version and expect it to be faster, eager, better, lighter. there are new features as well like a fingerprint scanner which by all accounts is not working that well. it is waterproof which is pretty cool. it can withstand up to one meter
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submersion for up to 30 seconds. the general take on this fund is typical next step everything is a little better but nothing extraordinary. >> it's getting mixed reviews so how do we think this thing will sell? how will it do against the iphone? is theiphone definitely stiffest competition but the other big competitor is the general slowing down at the high-end of the smart phone market. al numbers indicate this is shrinking portion of or any smart phone sales growth will come from. given the fact that the galaxy a was considered kind of success but maybe not as amazing as the galaxy s3, the numbers on the galaxy ws5 may not be as stellar as years past. >> samgrobart, thanks so much. we are going to have more on the samsung galaxy s5 debut coming
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up and we will sit down with one of the makers of a fitness app that is using samsung's biometric sensors. you can also on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. and apple tv. ♪
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"bloombergback to west." >> i am well rested. >> good for you. >> i measured it. >> we are talking about fitness apps. samsung is turning to fit is biometrics to take on the competition. they've got a heart monitor and low sensors that monitor heart rate activity in many apps are plugging into that. >> i am all about these patches. >> i am not about them because i
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cannot handle having my life analyzed in that way. >> an interesting company has been going after this idea of how people understand their sleep and activity patterns and improve their health. there has been interesting twists and turns. you guys used to sell a thing that strapped on your arm to measure sleep. now you're built into this phone, tell me about that. >> on every single samsung s5 phone, you can have a personal coach that uses your phone as your activity tracker and then figures out what is the easiest way for you to be healthy and actually coaches you on your phone. >> show us how it works and tell us how it's different from all the other tracking apps? >> there is a lot out there. we are different at a few ways. the first one is now you don't
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need something strapped on your wrist. this does everything. it does not kill the battery. lark is your personal assistant. we call it that because unlike others, it does not just track and monitor your data. it also has a conversation with you to get you motivated to become healthier. >> i need motivation. how does it do that? >> it's having a conversation with me and it says you are doing well so far today. i can say great, what does that mean? >it looks like you did more walking in the midmorning than you usually do on weekdays because i was running around to come here. starts having a conversation, teasing out the most important things for you. >> talk to me about the partnership with samsung. >> samsung came to us about a year ago. our collaboration started then and samsung thought that health was huge in their next device. they said there is so much data that will be out there but who
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cares about the data and what can you do more? we have been working with the top experts in behavior change for many years and we know that if you can coach people at the time they are making their decisions, then you can actually help them. >> do i need to walk more or what do i need to eat for lunch? i did about two years on the fit bit. i examined my life through my workouts but i know i am weird in that regard and most people discard these things after six months. >> even shorter. people will might do that with your phone so is that a competitive advantage? >> there is a crazy statistic that said 90% of people have their phones tethered to them within three feet of their body 24 hours per day.
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that is huge. if we can use this phone and it does not kill the battery to track your walking, running, hiking, driving, then we can understand information about you in real time and coach you at that moment when you're making a decision. should i walk a little further today to that nice restaurant or should i drive? that is what makes the difference. these are everyday things. ceo, thanks so much. up next, william shatner will be joining us. are you a star trek fan? >> i was back in the day but i am a big fan of his priceline as. >> he will be here to talk about his new reality show. that is next. ♪ >> its 26 minutes after the hour which means bloomberg tv is "on the markets." stocks are trading lower again today. the dow is the biggest laggard. it is off by about 3/4 of one
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percent and the nasdaq is down by about 2/3 of one percent. more "bloomberg west" coming up after the break.
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>> this is "bloomberg west," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. rent the runway is on a tear, quickly growing and expanding, opening brick-and-mortar scores -- stores in new york and las vegas. jennifer hyman is the ceo and we asked her how the company is harnessing mobile shopping. >> our mobile business has exploded since we launched our app in october. 40% of our traffic is coming through mobile and the engagement of mobile users is seven-10 10 times the engagement
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of people just on the web. we see it primarily as a browsing platform. tois easy between meetings daydream about dresses and accessories for five minutes when you are online at starbucks and the other thing is it is a seamless way to track your order. women are going on and figuring out when exactly my order is going to show up at my house. >> you also opened to retail locations in new york and las vegas. how do you balance the physical retail side with the online side of the business? >> our customer is this ogre woman. -- our customer is this go-getter woman. we built the stores as technology first storage. she is is coming in and trying on 15-20 dresses for her upcoming occasions and that information of what fit her and how to accessorize the look is being stored in a virtual closet
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which she can access on her phone or the website. with one click, she now has all the outfits she needs for the year. >> do you see doing more? >> we will definitely do more. >> where do you see this knowing? do you see it going beyond dresses and accessories? >> we will have really exciting news within the next few months about the further disruption of the closet. >> you are not the traditional e-commerce company. we have seen e-commerce companies that were once hot like fab really struggle. one entrepreneur thinks the e-commerce companies will be down and there will only be a few big great companies that rise to the top. what do you think of that? is very tough because traditionally, the margins are quite low. in our business which is a rental business, we have very high margins because we can utilize inventory dozens of times.
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because we control the entire operational process from end to end including dry-cleaning, we know how to preserve the lifetime of our garments and how to buy more efficiently. >> how is it going on the making money portion? >> the business has exploded over the last few months. we have seen almost a tripling in orders and our loyalty rate has doubled and or bookings have doubled primarily because we discovered that women would rent for more occasions and would consider us for date nights and saturday nights out and bachelorette hardee's if the price was right. >> when it comes to social platforms like facebook and twitter and instagram, does one offer you more unique opportunities than the other? >> platforms that are of photo-based art incredible for us. enables women to build their personal brand
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therefore instagram and facebook have been massive channels for us in terms of word-of-mouth and how people find out about rent the runway. >> what about instagram as a platform for advertising? they are rolling out more ads. do you think instagram could be useful for e-commerce businesses? >> i'm more excited about pinterest rolling out their advertising platform because when women are going on pinterest and building boards for their weddings are bachelorette parties, they are in the mode of either dreaming of shopping -- or shopping. >> you wrote a blog post in "the wall street journal" how you developed as a young ceo and you have your own personal board. who were on it and what did they do for you? >> one of the great things about being a young entrepreneur is that there are all of these
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other young entrepreneurs and we are all doing this for the first time. >> you said being a ceo can be really lonely at times. do you think it can be even more lonely being a woman ceo? >> i think it is really difficult to be a female ceo because the only role models i have had a my life of what a leader is have come from men. typically, when a man asked tough, he is viewed as being competent -- confident but when a woman asked tough or she has a point of view, she can be considered aggressive, bossy and other negative words. >> other negative b words. >> how can you be authentic who you are as a woman and how can i be warm and loving in the office as well as being tough and as well as being aggressive? initially in my first few years of rent the runway, i was kind of trying to model what i had seen in the past. that was totally inauthentic to i am.
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over the last two years, becoming more comfortable in my own skin as a leader and feeling that i can laugh with people in the office and hug them and start crying in a meeting or i can dance to madonna which i have in the office and at the set reallywe can hard-core priorities for the business and meet high objectives and be tough and aggressive when we need to be. >> that was jennifer hyman, ceo and founder of rent the runway. coming up, william shatner, captain kirk himself. >> among other things, tj hooker. >> there he is. ♪
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>> you're watching "bloomberg west." actor, bestndary
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known for his role as captain kirk on "star trek," but a new generation of fans know him as the rice a negotiator and william shatner is an author, recording artist, and the owner of his ownios and android app. it allows you to say almost anything in his voice. on april 24, his one-man broadway show hits theaters for one day only and he will be the start of a new home renovation reality series on diy network, legendary actor william shatner joining us from l.a. how do you say it? howtoetry is very imaginative. there is nothing like it out there. , you the owner of the app choose the words, choose the delivery and then you can send it as a message that you
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want to send but with my voice. >> throw out a few at us. >> what? >> i can do the voice, maybe. >> throw a few words out. >> your voice is too deep and around and volume in us. -- you have to go through your nose. .> i can wiggle my nose >> now you've got it. turn to your left and say i love you through your nose. >> i think she will slap me. there is something about your character from even before star but this whole reality thing is interesting. you bring out this comedy and it works and connect with people. do you have a sense of what that is so you can re-create that in
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your different roles? , do i have a sensibility about what i do? yes and no. an actor should be both conscious and unconscious of it. aree but unaware but if you too aware, you are self-conscious and of you don't know what you are doing, it's happenstance. you work on multiple levels. >> why this reality show and why now? >> it's really interesting. they came to me and asked me to update my house. much to my chagrin, the house needed updating. it was like a wish fulfillment. my wife said we need new appliances and i said we will get the appliances. she said i wanted to break this wall down. all of a sudden, there is diy
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saying we will do all of this for you and put it on camera. and they did and it's fantastic. the result is every homeowners dream. they say ok, done. gets it and puts it in and makes it work and somebody else cleans it up. it's wish fulfillment, really. that is the show titled " shatner project" and that will be on in october. plus, there's something more relevant and more progressive than that. theater 24, at a movie in your neighborhood and wherever that neighborhood is across the country, this one-man show that i did on roadway where i toured canada and most of the
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united states is on movie theaters. at a movie at 7:00 theater near you, for the price of a movie ticket, you can see this acclaimed one-man show. you can find how to buy tickets at the theater near you, you can go to shatner's the websites will let you know how to buy a ticket in your neighborhood. it's really worthwhile and you will have a great evening's entertainment. world of apps and websites and smartphones -- "bloomberg west" is all about technology and business and i suppose you have given a lot of thought to this because of what -- touched aep nerve with so many people and it has been almost 50 years. why do you think people love technology so much why do they
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see the future in gadget so much that's a fascinating subject to which i am applying myself. i camemoment before here, i was arranging something and the moment i leave here i am arranging something. i stumbled over the words app and website. in a business venture i am starting the results of which will be out to the end of the year, an app that ties to a website that feeds you pictorial and verbal information so that all those separate applications combine. there's this whole technology. when bloomberg began was right spanking new ideas. it is -- it has now matured and you guys are progressing. there is so much more out there. i sat at a table last week with three kids who were popular on i
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hadn't doing a lot of tweaking. tweaking. these kids were the most popular people for their six seconds of communication on vibe. they did not know who i wasn't and i did not know they were. there is such a turmoil going on in this industry, and this communication. there is such a burgeoning thing going on that we are barely able to see the horizon. are big on twitter and you recently quit titter and came back u andnquit. what happened there? i came back so i could tell my twitter audience that april 24 is an important date.
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there was a terrible mixup and the story is to disorganized to tell you except that i quit and then came back on within moments of it and i got away from me. i never intended to quit. it's too important. >> last question -- of all the roles you have played, what is your favorite? >> [laughter] that's not a progressive question. that's an old question. talking to you -- how's this? talking to you this morning is my favorite moment of the day. >> oh, that's wonderful, thank you. >> and the day is not over. turn to your left and say i love you through your nose. >> he is trying to get us to do that. >> are you ready? legendary actor, william
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shatner, thank you so much for joining us. coming up, we will talk about wine and a new app? >> i love you. ♪
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welcome back to "bloomberg west." have you ever had a really rate bottle of wine but had no idea where to find it? i'm sure you have. >> you mean i lost it? >> you can't buy another one. >> both have happened. >> and you can't tell anything from the label. >> i have a neat app i have been using. it is called delectable. it is great for wine lovers with a shopping application to it. is fun to talk about it with
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a lot of wine. >> and the delectable ceo who by the way used to work at palateer where he chased down terrorists. how do you get from big data to wine? i i love that company and believe deeply in it but i wanted to work on something relevant for our culture, something -- >> terrorists are not relevant? to the foundation of our society protecting our borders and making sure our institutions work and i wanted to do something for our culture so i started delectable with the mission of making the world a more delicious place. >> i will put the app to work right now. we went to the wine merchant next-door and bought a bottle of wine and let's see if we can do this. >> how does it work? >> delectable will identify the wine with extremely high levels of accuracy and tell you more about the wine.
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it will keep track of the wine you are drinking and if you like it, you can buy it again. >> does it help you buy it? >> i can show you. just push a button on the wind profile and it will show up at your door a few days later. >> when facebook bought instagram, it was an imagination of what the revenues could be but you guys are doing this but this is a big data problem. >> there is a lot of wines and they're made by a lot of different people. even just assembling the data side of everyone is a technology challenge. >> did you have to get everything cataloged in your system? we thought mobile was going to be big for the wine industry. when you look at a bottle of wine, the label tells you little. maybe if we can tell people about what the wine is with their phone that that would be valuable. >> i got it. great, we built it and
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started to see if people would like it and it turns out people really like it. if you look around and restaurants, you see people taking pictures of wine with their smart phones. >> you gave yourself a strong pour their. >> that's for you. cheers. i collect wine a little bit and wind has a lot of data so the competitive set is to enter all this information -- you guys make it may be too simple? >> i think it is one of these low bar -- high feeling things. we built delectable for everybody and every one has a moment in their life where they say this one is awesome, i want to know why. that's what delectable is for but the way you answer that question is by having the thought leaders of the wine industry constantly recording the wind slayer drinking -- they are constantly recording the wines they are making and recording them. >> how can we get to a point
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where wines are like rated? >> it's going to take a long time but that's what we're working on. we are building a collective brain that everyone who is smart in the wine industry is contributed two. >> there is so much margin that goes from the time the grape is picked and to the bottle by the time the consumer pays for it. 70% of the value is the middleman. >> it's incredible, there's a lot we can do to go direct to consumer which helps you transact with wineries and that hasn't and enabled -- and that has enabled the product. >> this wine has not shown up yet. >> it is still being identified. >> from my experience, it usually finds what i'm looking for but it might take a while. it's a fascinating app and we wish you a lot of success. >> alex fishman, thank you so much. e. is time for the by byt
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jon erlichman is in l.a.. >> 17 billion dollars. cost of thecurrent 19 billion acquisition of whatapp. that price could just as easily go up. most of the deal is in stock, not in cash. >> have you been watching the selloff? >> yes, the media stocks are getting hit, too, and disney bought maker with incentives that they may performance, they get more money. i spec more deals like that because of the uncertainty. erlichman, cory johnson, we will look at the markets throughout the day today and will have an update for you
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later. >> it is driving a lot of people to drink. ♪ .>
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worldm bloomberg headquarters in new york, i'm mark crumpton. this is "bottom line" the intersection of business and economics with the mainstream perspective. president obama nominates budget director sylvia mathews burwell to be the next health secretary. investors ensure strong appetite for greek bonds. in the golf industry swings back. to our viewers in the united states and those of you joining us from around the world, welcome. we have full coverage of these stocks and stories making headlines today.

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