tv Bloomberg West Bloomberg April 25, 2014 1:00pm-2:01pm EDT
>> welcome to "bloomberg west." hear fromnding by to spacex ceo elon musk who is holding a press conference momentarily that was announced just last night in a mysterious e-mail to reporters, all happening in just a few moments. we will take you there live. is it game over for google plus? their efforts in social networking have not been wildly popular and now google plus googlect is leaving but says its strategy isn't changing. first, check out the top tech headlines. shares of amazon are down about
nine percent, hitting a six-month low. the selloff comes after expenses rose 23% in the first quarter, limiting amazons profit. the ceo is pouring cash into the business for shipping and services, including media content, a new prime entry business, and cloud business. microsoft takeover of nokia handset is official. the deal was completed today, seven months after the $7.5 billion purchase was announced. may beal price slightly higher. thousands of employees are transferring to microsoft as part of the deal. heavy spending has investors questioning pandora despite a 169% gain in first-quarter revenue. shares in the online music service are falling about 13%, the most since 2012 him after the company said it would spend aggressively this year to improve its service and fend off competitors like spotify, itunes radio, and others.
lead story of the day, elon musk, founder of spacex and tesla has called a mysterious press conference. we're waiting for him to speak at the national press club in washington, d.c. right now. we do know the event is about spacex. the invite calls it an important announcement. it comes after spacex successfully tested a reasonable rocket for the very first time in texas last week. reusable rockets could dramatically cut the cost of space travel and are one of his key goals. our editor-at-large cory johnson is with us from new york as well as peter cook with us from washington. peter, you just listened to musk speak earlier in the day. you have some ideas on what this could be about. what are you thinking? >> first of all, i heard elon musk this morning, one of the star attractions at the annual conference gathering about 1000 business leaders from around the country i'm all interested in exports abroad.
xm bank has helped spacex in terms of some of its business overseas. he was there to sing the praises and talked both about tesla and spacex. my sense is, from everything we've heard so far, the announcement will have something to do with spacex's interest in getting into the military satellite launch business, which right now is controlled entirely thenited launch alliance, partnership between lockheed martin and boeing. he is been trying to crack this for a while. spacex has a deal, talking to the air force about it, but they need to clear certain hurdles before they can truly be considered -- and this is just a guess -- that that will be what you on musk is talking about shortly at this news conference. >> speculation has been rampant and extreme. cory johnson, i've seen ideas that maybe has figured out how to launch rockets on tesla batteries or had his first contact with aliens. with elon musk tummy you never know. isi think the alien thing definitely true.
it would explain so much. i think this tells you a lot about the business model for spacex. we know a lot of the payload for the business -- the business waiting our military and security payloads. those are things that right now the go to his russian rockets. they don't want to do that right now. they want an alternative. d.c.,ss in washington, contracts ready to be had for elon musk and spacex. clearly, that is a big focus for these guys. otherition to the satellite business. one of the big drivers of the industry over the last five years has been through the tv. satellites were required to requiringthe signals a satellites. the 3-d thing did not take off as many had hoped. the satellite industry seemed to slow down. their hopes for a new hire def tv would lead to more satellite launches. reasonable rockets could
potentially cut the cost of space travel by a factor of 100. this could also allow manned vehicles to have sustained time in space to do things like he has talked about, potentially explore, colonize mars. peter, when you look at the latest launch, it is still in very, very early stages. savings, but it is a angle, a savings argument that elon musk is always telling when he talks about spacex's business. he did it again today at the conference. he talked about the launches they're doing right now with nasa up to the space station, the cargo launches, manned as well, but the cargo launches. he said, listen, we are not being paid as much as our competitor orbital sciences and they're not even bringing stuff back from the space they should like us. he is saying spacex is a savings for the taxpayers and that is ultimately the best business case why the government should
spacex specs eggs -- long-term. >> we spoke to an astronaut, they're very much about the research that can be conducted in space that cannot be conducted here on earth, things like trying to cure cancer. i am hearing elon musk has started speaking at the national press club. let's take a listen. feed,also have a video although the link was very weak. for the video feed, we are trying to clean it up and have it be something where you can make sense of it. we are going to clean it up as much as we can on the spacex side, then posted on our website and try to crowd source and see people out there can actually make it look even better. i know there are people out there good at fixing video streams. milestonereally huge
for spacex and certainly for the space industry. no one has ever soft landed a liquid rocket boost before. i think this bodes very well for achieving reasonably, as people maybe have heard me say, i think what spacex has done thus far is evolutionary, but not revolutionary. make -- if wecan can recover the stage intact and relaunch it, the potential is there for truly revolutionary impact in space transport costs. the cost of propellant is actually only about .3% of the cost of the rocket. $60 million,n cost the cost of repellent is only $200,000. there's potential therefore ultimately 100 fold improvement in the cost of access to space.
with the information we have learned from this flight, we know we can soften the rocket. we are taking additional steps with the upcoming flights, which will be a commercial mission for greaterata much probability of getting to the stage in time and recovering it. we called every boat owner on the east coast and it turns out most that can take heavy seas or in the gulf and elsewhere, but apparently not in the greater florida area. this time we will have much more careful -- i think we will also -- i'm lucky that we landed the stage in the middle of a big storm. hopefully, we will not have to do that. it will also be splashing down or landing in the water much
closer to land the last time. hopefully, we will avoid some of the deep ocean stuff. each successful launch, and we have several more this year, expect to get more and more precise with the landing. if all goes well, i am optimistic we will be able to land the stage back at cape canaveral by the end of the year. so that is all the crazy stuff. if something like that happens, we should be able to reflect the main boost stage sometime next year. somewhat of a huge day because we've been trying to do this for some time and it has been 12 years. we sort of finally did it. now we just have to bring it back home in one piece. any questions about that? have you identified the
landing site at the cape to bring it back to? >> we have worked with air force range safety and identified several locations at cape canaveral where we can land the stage. they have been really helpful. at first we were concerned the range would object to this, but they have been really helpful and supportive. there are several places we can land. it kind of depends on how tightly we can control the landing point. i think if we can demonstrate tight control by there are a lot of places at the cape that we can land. >> [inaudible] >> elon, was anything cited or
recoverable or was there just nothing left but you could see when you tried to look for the stage? >> the recovery operations were challenging because we cannot get a boat out there for two days. willing not find anyone to go out there. we even call the coast guard and they were not willing to go out. soon as we get out there it was two days later. we have been able to find pieces of the interstage, so is the carbon fiber structure that reminds the first and second stage. that is something that you would expect to get destroyed. >> elon musk of spacex confirming the successful soft launch, soft landing of a reasonable rocket. speaking at the national press club in washington, d.c. what do you make of his comments? he regretted the importance of reducing the -- he reiterated the importance of her dissing the cost by factor of 100. >> i'm always skeptic about
numbers. we will see. , theotential for that devil is in the details. god is also in the details. and the notion of this being a successful reentry. the fact it did not go where wanted to and are only finding pieces, suggest maybe wasn't the success they hoped. it is interesting. they could be getting closer and closer to something that is actually reasonable. >> they believe part of it disappeared in the ocean. peter, what are the implications of what he had to say for the future plans? the military connection they were talking about, but what does this mean going forward? militaryare still the component to this in the sense that if they can actually nail this down and allow these fuel boosters to come back to earth and be used again, the cost savings there is significant and also applies to the military side as well, potentially.
right now the competitors, those boosters disintegrate as they fall back to the earth. this is something that is a key part of their business plan going forward. if they can succeed, and there are many skeptics, they can prove a lot more not just to investors, but to the federal government as well because it will be very hard to knock off the combined forces of lockheed martin and boeing in the military side of things. it is a powerful competitor who is ready to take on elon musk, you can be sure. >> and the fact that landed in the ocean, does that raise questions about the reasonability of the rocket? >> i think that was their plan all along. and the fact it was destroyed by said it was the bad luck it landed in the middle of a storm, it does raise the possibility had it landed in a calmer place, would it have been a more successful reentry for the soft landing? we will have to wait to see. august the, elon musk feels good enough to stand in front of cameras and talk about it,
assign that that confidence in the future. >> the way this works, the land and the water uses less propellant. the rocket basically tries to slow down the weight comes into the atmosphere, so it needs more energy, more propellant meaning less payload, lessig can deliver. it's always about the payback and the decisions about balancing how much they can deliver and how much propellant they need. >> cory johnson and peter cook, thank you both. still ahead, what happened to google plus now that the man who led the social efforts is leaving the company? you can watch a streaming on your phone, tablet, bloomberg.com, apple, and amazon tv. ♪
the head of social network is leaving the company after eight years. google says this does not signal the end of google plus. a spokesperson telling us this has no impact on our strategy. michael kim joins us via skype from seattle. he worked at microsoft to launch the dot-net cut services and also brad stone with me in the who wrote a new story about google and facebook's fight to control the future of technology. brad, what happened here? is google plus dying? googlee are elements of plus the continued to be very important to google. , hangouts. those are growing products. there being more integrated into android. i think the identity aspects are
being closely integrated in the search. the original promise of google plus as a social network did not work out. we all know that. perhaps from an acquisitive, vick is leaving after eight years at google. the promise that product had, which you really staked his name and reputation to, did not work out. >> you worked with them at microsoft. what kind of guy is he? t was similar anywhere trying to get information about people into the cloud, right? >> yes, i had a chance to work with vic while we were launching the industry's first personal computing platform, which was called dot-net services. codenamey the terrible hailstorm of the time. a lot of what we see today with google plus and even facebook platform and even with the apple icloud, our efforts in many ways to go back and hopefully relearned or learn from the past mistakes we have made back with dot-net. an attemptvices was
to convert the computing model and the consumer space by taking the users data and putting it in the cloud so your contacts, calendar, and most important your wallet, and then allowing other orchestrated web services and applications to personalize their experience to you. it is really ahead of its time. vic was responsible for developing and iran product management. we had over 100 partners at our launch that all signed up to use services including american express and ebay. i think there were key problems persisted with that but i think a lot of companies including google plus, are still encountering. was ahead of its time, maybe google plus was behind its time. brad, i've seen some speculation that maybe part of this has to do with google missing out on whatsapp and the huge messaging
social product, maybe google is throwing up its hands and saying, we are going to do something different. >> that may be true. i would not lay that at vic's feed. sapp could've been integrated nicely to the android program. facebook paid $19 billion. that was an aggressive buy based on facebook's at the time heidi lee -- highly valued stock price. >> brad stone and michael kim. we will continue this conversation after a quick break. ♪
we are talking about the architect of google plus now leaving the company. with this is michael kim who worked with vic in earlier days at microsoft and brad stone. you just wrote a piece about google versus facebook and acquisition strategies, making big, crazy, unpredictable that's. how does this play out." >> a week and half ago, google acquired titan aerospace, a drone firm. we asked the question, what is going on? i think are equal parts inspiration and anxiety. inspireion these bets employees and allow larry page at google, mark zuckerberg at facebook, to forge a future. we talked about elon musk earlier in the program. i think everyone is inspired by what he is doing, but that anxiety is turmoil in the transition to mobile phones. these guys are looking to see what is next, what is the next
platform after phones. outside, tofrom the these kind of accusations make sense to you or are they totally crazy? >> some are certainly totally crazy, but this is the kind of time in the market where you can take these crazy bets with .airly minimal financial risk i don't think they're totally crazy. i think these are placeholder bets that could grow into saving the company in the next 10 years . i think that is a worthwhile bet to take. andll right, michael kim brad stone. thank you so much. we will be right back after this quick break. ♪ >> we are on the markets. let's take a look at where stocks are trading right now. we do have declines across the board, particularly acute in the nasdaq will stop we're the worse than estimated amazon earnings.
>> you are watching "bloomberg west," where we focus on technology and the future of business. chang i want to focus on elon musk speaking about the successful landing of a usable boost stage in the atlantic. it was destroyed by high waves, but it bodes well for the ability. i want to get back to peter cook in washington, our chief washington correspondent. >> he has also had more news at this news conference, elon musk, announcing that spacex will
legally challenge the contract awarded to you l.a., the partnership between lockheed thein and boeing, consortium that launches military satellites into space. they had a monopoly on that business. spacex is being considered by the air force for future contracts, but before they are certified and open to that competition, they are challenging the most recent contracts being awarded to ula. they are protesting, as other contractors have the right to do in these instances, but they are taking a risk in the relationship with the air force going forward. elon musk has tried to challenge in the past but they were told they do not have the legal standing. now the question is do they have the legal standing, and grounds for protesting the contracts that have been awarded to ula going forward. that is perhaps more news than that word of the reusable
booster and the somewhat successful soft landing in the atlantic ocean. >> thank you, peter cook, for that update. you have heard of conflict diamonds, but some of your favorite electronic devices might have the same issues -- laptops, game consoles, smartphones, they are made with a variety of precious metals and a handful have been designated as conflict minerals. cory johnson is back from new york. >> this is a big deal. armed groups like in the democratic republic of the congo have earned millions trading the minerals that are at the heart of your smart phone like tin, tantalum, which restores electricity and battery life. gold is used in some of the connective wires. is trade of those minerals helping to finance armed conflicts all over the world. the giant intel is becoming first company ever to ship
conflict-free. carolyn durant joins us now. if theyou even find out are conflict-free? how can you audit all of that? >> it is a challenge we have had and we have been tackling for the last five years. first thing is to understand technically where they fit. they are a technical supply company -- intel is a technical company and we make our processors, so the first up was straightforward. then comes the investigative reporting, understanding how to get down to the mind. the supply chain did not know. we did not know. foundt down the chain and smelters, a place in the supply chain where you can do auditing e to the smelter.
we have worked with other injuries -- industries to put an audit program in place. >> i have never actually wondered before how you audit a smelter. tell me, what do you do? >> we do it in three straps -- steps. we want to make sure they care about the issue with a policy. at the second is a mass balance -- the transitions over time, and how much mineral, ore, or recycled material came in and how much product they sold in understanding the scope of what came in and out. if a smelter said they took in enough order to make 25 tons but they sold 40 tons, there would be an obvious gap. once you have the -- .o ahead >> we have a map that shows the places you have to trail through in the supply chain.
talk to me about the global nature of that. >> for our supply chain, we have different 150-to-250 smelters into our product line. part of that found smelters in over 80 different countries so smelters,different excuse me, in 21 different countries that we have personally visited to look at the supply chain, how they process materials, and the transactions coming in and out. why the conflict is focused in the drc, the supply chain is literally around the world. >> what is the message you give the smelters to care about this because fundamentally it is a commodity business where it is about the cost of the input? >> from our perspective, that has been one of the biggest challenges. -- fortunateanet that in the 10thwe had several early adopters that worked well with us.
it is supply chain pressure put upon industries to help join the cause and drive forward. it took a lot of tenacity, and in many cases, when you get down to the fundamental audit, the supply chains actually do those transactions and mass balances as part of their inventory anyway, so asking them to demonstrate where it came from was a smaller leap once they understood the issue. >> do they really care? it is a fundamental, human rights issue, and it does not always play well in business. >> i would say it is a mixed bag. there were some smelters that truly do care and i am confident they are doing it because it is the right thing. others, supply chain pressure. one companies like intel and others said we need this to happen, it became some they need to do for their own business sake. >> weekly, why does intel care? >> we care because it is the right thing to do. we are a global supply chain and
>> welcome back to "bloomberg west." i'm emily chang. all week long we have been looking at how technology is changing hollywood. moviemakers like to say content is king, but what if you cannot find the content? is investing heavily in the user interface. jon erlichman has more. >> i think a lot when i'm sitting in front of the tv about what i am going to watch, so the user interface becomes an important part of the story. epix is the home of this, onking on -- working a lot
this. the ceo joins us from new york. before we get into the user interface, tell us how much content, how many movies you have at your fingertips and how many your subscribers have? >> it is great having partners in mgm, lions gate. with the studios, we have exclusive rights to about 35 titles in every year. and on our digital website, we are close to the 3000 of the 15,000 titles in the library of the three studios. we are able to offer an incredible breadth of content of what consumers can get access to. >> it is an amazing amount of contact. -- content. what about navigating through it -- what are the things you are doing to make sure people are watching a lot of that stuff. >> there are always people that prefer the linear experience, just like tv right now, hoping
to curate and bring content people want to see. there are always people that want to do that. onalso have a set top box demand. but with the 3000, you have to find interesting ways to do search and discovery. my wife and i love watching romantic comedies, but my kids will get upset with us if we watch "it's complicated" one more time. you can go to our website, and you will see there is like the old blockbuster stores. there is the new releases, and you could go into the different categories and genres. you can find other categories for search, define it by years, categories, actors, actresses, directors, but the most fun thing we do is six degrees of separation. we take two actors and see how they are connected in a filmography. what is fascinating to us is when people do that, they find
something new, and 90% of the people watch one of the movies we have recommended. in that duration, search, and discovery, we are trying to find easier ways. we will go old-fashioned, which is linear, here is comedy, here is drama, or more fun things like how to connect. >> explore this. i said he factor for the subscriber -- explore the curiosity factor for the subscriber. speaking of search, amazon has in making a deal out of this voice search for fire tv. >> the amazon product -- we connect to your years ago, and they do voice-activated as well. a lot of this is a fun, cool, hip and to do. 1.5 millionid downloads of their app in 10
days. people are into finding new ways to play with these devices. is it into the nomenclature that we all know how to do it and it works perfectly? no, but the amazon product, i have played with it, it works really well. >> you mentioned the amazon product, the xbox product. it is a different experience if you are watching through traditional cable on your television and using any of these life forms. -- platforms. would be another. does it change what people end up watching on epix and these platforms? >> new release titles are always the big drivers. games," have "hunger trek"all," and "star those are the things people are immersed in. we are finding that people are getting more engaged into the libraries if you find an easy way for them to get their.
ar country has always had love affair with movies going back for almost 100 years. our job is to find a way to make it available for them. we are on 450 different devices today between the xbox, the ps3, the ps four, the ipad, the iphone, and we have to use a technology these devices allow us to use to enable the search and discovery. >> no doubt. mark you, margaret berg -- , talking, ceo of epix about the home viewing experience changing. what about going out, seeing a concert, like here in los angeles where the l.a. forum spent 100 million on a new renovation to be current and modern. here is what we find out. has hosted every big musical act you can think of, but in its older years it
has battled with attention with its younger crosstown rival, the staples center. the l.a. forum reopened in january after a massive makeover. let's check it out. the here you have some of eagles equipment, the first performers in the new l.a. forum . the madison square garden company has spent $100 million on renovations. >> it was arguably the most important music venue in the world at one time. than msg,s it better as you see at the garden, and they saw an opportunity to return it to its original splendor and more. >> we came in, took the seats out, basically gutted the building. >> if there is one thing that really makes this the premier concert venue, maybe not just in the u.s. -- >> i got it. one thing, the sound.
don henley says it is the best sounding building in the world, coming from a guy who knows. >> it is no accident. they put sound baffling everywhere you >> top -- everywhere. top acts are noticing. case will make a stop. they will host the mtv music awards where miley cyrus made a splash last year. roomsan play in stylish or the fitness room. >> i get to test my fear of heights. we are in the tension grid. if you are a leading expert, somebody who has to get harnessed up here, you can walk -like. "star wars" i also noticed you have your own mood lighting here at the forum. >> we have the led lights. we call it our starry night. >> pretty incredible here at
silicon valley has helped to fund the push. lytro ceo jason rosenthal is here with me with the new camera. tell me all about it. >> thank you. this is a big step forward. we have rebuilt the camera from novel --d up, a huge level of capabilities here >> show us how it works. >> i will get you framed up. i'm using depth access, which captures all of the depth in the scene. we have a beautiful shot of you. >> that is not a beautiful shot of me. i look awful. ok. there is my face. -- >> if youpping try tapping the background you should bring that into focus as well. >> ok. interesting. oh, there you go. wow.
so, why are you guys going after the professional market versus consumers? >> the professional camera market is large, about $22 billion a year, 22 million cameras shipped. towardks that gravitated a technology where this group of creative pioneers, people that want to stand out with visual differentiation in their work, produce pictures you cannot get anywhere else. it was a natural evolution to move up the chain that way. >> would a professional photographer need refocusing technology? don't they take perfect pictures? more thans refocusing. we are evolving camera 3.0. 2.00 was about film, ism-to-digital, and 3.0
captioning rich data, and applying powerful algorithms to do things you have never been able to do. >> remind us how the technology works. >> when you are taking a picture with lytro illum, you are getting all of the depth data, the three-dimensional data in the shop. that lets us do things like create lenses and have zoom and light capture that you have never had before. of things youot always had to get right at the time you took the picture. all of that goes into software post-processing. >> the camera is $1600. >> that is right. canon ever tried to buy you because it seems like a feature? >> at our core, we are a software company. we are using rich data to bring this new capability to cameras. it is a different way of thinking. >> could you license the
?oftware to canon or nikon >> we absolutely can. our focus is building the fast for-- and to end use consumers. >> what kind of people are buying this? >> it ranges from the top-end, professional photographers, to creative professionals, all the way down to mass consumers and aspiring professionals. it goes back to people that want to differentiate their work and do something you cannot do with any other camera. >> i want this on my phone. that is what i want. >> you bring up a great point. our vision overtime is anything that has a sensor with a lens in front of it will benefit from camera 3.0 technology. , film, medical imaging and television production, security surveillance -- over time we hope that you will see lytro technology in every device like that. >> fascinating. i can really use it because i'm not a really good picture taker.
, jason rosenthal, thank you. time for the bwest byte, one number that tells a lot. cory johnson is in new york. jon erlichman is in l a. cory, what do you got? >> this is a picture. astronaut steve swanson with an orbit when he snapped this selfie. very cool stuff. >> i love how his partner tweeted it is really hard to take a selfie in a space suit. they tried several times and this is the best they got. >> maybe yours will be better that way. you should try. >> the selfie thing is getting out of control. >> i know. i am trying to limit myself. .t is getting uncool
>> from bloomberg world headquarters in new york this is "bottom line" the intersection of business and economics with a main street perspective. the u.s. and european union says russia is not honoring the geneva pact on ukraine. elon musk discusses the future of reusable rockets. is there a way to protect your credit card from hackers? to our viewers here in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks in