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tv   Bloomberg Technology  Bloomberg  July 20, 2017 11:00pm-12:00am EDT

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alisa: i am alisa parenti in washington, and you are watching "bloomberg technology." let's start with a check of your first word news. o.j. simpson will be paroled after serving nearly nine years in prison for armed robbery and assault with a weapon. a nevada parole board decided today that the 70-year-old former football and movie star will be released in october after serving his minimum term. jeff sessions announced today he has no plans to resign his position as attorney general. that, despite president trump expressing regrets about appointing him to the nation's top law enforcement job. robert mueller is expanding the probe into russia and the trump campaign. that is according to people familiar with the matter who say the special counsel is examining a broad range of business
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transactions by president trump and associates, including apartment sales to russians. the senate gop's revised health bill would increase the number of people without health coverage by 22 million over the next 10 years. the nonpartisan cbo also finds the bill will raise costs for people in private insurance coverage, reduce medicaid spending, and cut the deficit by $420 billion. a senate judiciary panel has approved the nomination of christopher wray to lead the fbi. now, the vote heads to the senate. if approved, he will replace james comey. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am alisa parenti. this is bloomberg. ♪
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emily: i am emily chang. this is "bloomberg technology." coming up, microsoft's focus on the cloud pays off as revenue , soared past the highest estimates. we will break down the tech giant's fourth quarter scorecard. elon musk says he got the green light for his underground tunnel project. we will dig into the hyperloop he says can get you from new york to d.c. in under half an hour. hulu steps up to the plate in the streaming battle against amazon and netflix. a guest joins us on the race to rule content in the golden age of television. first to our lead. microsoft shares are rising in extended trading, up as much as 2.7% after reporting sales that topped estimates in the fourth quarter. almost doubled for the azure cloud service. it points to the company's turnaround plan is working
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lately to reshape microsoft as a cloud computing powerhouse with new services related to azure and office 365, a shift that led to a massive sales restructuring. rose.sales other software increased 43%. joining us now to break it down is our editor at large, cory johnson. we have to talk about the cloud first. big progress. cory: it is amazing growth. one of the biggest businesses out there in the cloud. only amazon web services is bigger. emily: how much bigger is amazon? cory: we don't really know but probably five times bigger. nonetheless, it is a big business and growing. you mentioned 97% year-over-year growth rate is really terrific for them. it shows you they have used strengths that they had, particularly microsoft office to , move corporate customers from just office to office and the cloud.
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a lot of their dedicated office customers were already storing stuff using office 365 and other things. they were already using azure and add comfort with that. they are benefiting from the and existingd relationship with customers. emily: i am curious how much microsoft is actually a threat to amazon in this business because obviously microsoft cloud business is going, but so is the cloud business overall. cory: absolutely a threat. when you look at the big offerings for this industry, it will be amazon, microsoft, rackspace google, ibm, and , oracle. those are the big companies out there. what is amazing is prices keep coming down. amazon has been aggressive about cutting prices, and that is probably the biggest worry they -- microsoft has, going forward. they want bigger margins. can amazon continue to cut prices and have the big offerings? the other thing amazon is doing is adding more and more services and more and more type of
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offerings and compute solutions to really make it a competitive business and stay in the lead. emily: microsoft is spending a lot to expand its business, spending a lot of money on data centers. how much is it costing them? cory: the collapsing margins is where you see at the most. traditionally, microsoft had a high margin business. it did not take a lot of reinvention for the r&d costs to minimize compared to what the recurring revenues were like. now, microsoft is spending a lot more on r&d to keep up with microsoft and google and others. emily: last quarter, they have rolled out some new devices. how is the hardware line doing? cory: the hardware business is not very big for them. it was a way for them to lead and show by example. the computing business, the pc business, they call it more personal computing, which is ridiculous. more personal. intelligent cloud. if they had a stupid cloud business, i would allow them the adjective "intelligent cloud."
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can we strip adjectives from business names? i am done -- soapbox, i am done. pc business down only 1%. that is a home in victory in this environment were only apple is seeing growth in pcs. emily: speaking of personal, pc shipments continued to fall. what does that mean for microsoft overall given the windows news? cory: this could have been a lot worse. we talked about over the course of a pc industry once growing, falling 6% growth in certain quarters. down 1%, they would happily take that while they grow this new business. looking at wall street estimates , not what the business is doing. what this move to the cloud and this rapid growth in clouds mean quarters are less predictable for microsoft.
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they do not know what to do because they have this tiger by the tail in the cloud. and the results can be surprising. we saw that when we have had two quartersst four falling below estimates which , shows how unpredictable the business is. emily: cory johnson, our editor at large, thank you for breaking it down. more earnings we are watching out of europe. sap fell 1.3% in europe. it raised its revenue outlook and sales forecast and said it would buy back up to half a billion euros in stock. ubs said the higher guidance and buy back may balance disappointing margins. sap ceo bill mcdermott spoke to bloomberg earlier today. >> we have invested very heavily in two areas in the first half of the year. one is hiring the very best people at a real accelerated clip because we want to get the leverage from those hires in the back end of the year.
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you will see us slowing down, because we went fast. the second thing is is we , invested in the cloud. emily: coming up, elon musk's hyperloop project may have cleared a huge hurdle. we will explain next. "bloomberg technology" is live streaming on twitter. check us out weekdays at 5:00 in new york, 2:00 p.m. in san francisco. this is bloomberg. ♪ emily: shares of qualcomm fell
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the most in six months. the stock slid 5% in friday session. the biggest maker of chips used in mobile phones forecasting steep declines in licensing sales and profit, underscoring its dependence on the royalties that apple has stopped paying.
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elon musk sent the tech and transportation world into a tizzy earlier when he tweeted "just received verbal government approval to build the underground hyperloop." new york to d.c. in 29 minutes. musk later set the record straight, saying still need formal approval. joining us now is max, who has covered elon musk's "boring company" for bloomberg businessweek. elon took you into the tunnel. what do you make of the idea that regulators would actually give elon musk approval at all for this? >> saying verbal approval can mean any number of things. if i am reading the tea leaves here, it could have been some kind of a positive signal from the federal government. we know he has had some conversation with the white house about the idea of digging tunnels, assumedly as part of some infrastructure project.
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it could also have something to do with the government of d.c. these projects would involve a tangle of different regulations, local, state, federal. it could be any number of things. verbal seems very small. what it really sounds like is musk is serious about our getting more serious about digging these tunnels and trying to build support, both political support and thinking about how to raise money for this. emily: as you have been speaking, i got a statement from a boring company spokesperson saying the boring company has had a number of promising conversations with government officials. with a few exceptions feedback , has been positive, and we received verbal support from key government decision-makers for tunneling plans, including a hyperloop from new york to d.c. we look forward to future conversations with the city's and states along this route and expect to secure the formal approvals necessary to break ground later this year. what is your reaction to that? max: i mean, it sounds like they are basically fleshing it out.
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the key thing here is that, you know, first of all, it is very early. there is a lot of steps, especially when you are talking about the actual hyperloop, a superfast train. a lot of stuff, technical hurdles they would have to cross that have nothing to do with regulation. that said, what elon musk is keying into here is, number one, a lot of these big megaprojects have gone very poorly. obviously, the 2nd avenue subway in new york took something like 100 years. the subways in los angeles have cost billions of dollars. seattle has a problematic project called big bertha. i think elon musk thinks i will , be able to use some of my know how, some of the same playbook i used to make rocket travel a little bit cheaper. he has managed to cut the cost
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of a launch by quite a bit at a time when it recently a lot of enthusiasm on both sides of the aisle for some kind of infrastructure spending. emily: any chance elon musk is trying to drum up enthusiasm by tweeting right away that he got verbal approval? max: yes. i think he almost sort of came out and said it afterwards. if you care about this, you should talk to your legislators, your local governments, federal government, state government. i think that is 100% what he is doing. if you remember back to when he started spacex, it was similar. it started with no special expertise, and i think he had this initial plan when he was going to build a greenhouse on mars and use that as kind of like a way to attract attention. this kind of attention grabbing move is not something that is totally new as far as the musk playbook. he is a guy who has a track record for doing this sort of thing. some of these projects that he undertakes do not end up coming to fruition.
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they do not really go anywhere. he has said as much, saying he thinks a lot of people are acting as if this is going to fail. on the other hand, it is where his expertise is. he seems to be most comfortable when he has as many balls in the air as possible so i guess that is what he is doing. emily: i want to ask you about a story you have in bloomberg businessweek. more news coming out of washington residents have rebuking his attorney general in an interview with the "new york times." the scoop that bob mueller's investigation is moving to cover president trump's business. meantime, you have a story called "trump's washington is kicking silicon valley's butt." how so? max: there was a meme in february that silicon valley is going to be this key source of protest. what happened last week while no one was paying attention, the trump administration killed this
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international entrepreneur rule. it was a modest bit of immigration reform that would have allowed an entrepreneur to stay in the u.s., visa-free. something that people in the valley have been pushing for since 2009. it is one of these inoffensive measures, noncontroversial, had bipartisan support. with barely a whimper, it was killed. it is possible that the silicon valley was able to move somewhere on immigration reform, but right now, it seems like a lot of these efforts that they have put forward, there is a new thing for mark pincus and reid hoffman. have not caught much traction. that is the point i was trying to make. emily: the former ceo of twitter was on the show a couple weeks ago and said, look, trump may be meeting with tech leaders, but it does not appear that he is actually listening. would you agree? max: at a certain point, why are you going to these meetings if it is just resulting in a bunch of humiliating photos and not
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much else? i think if this thing that elon musk were happening, you have to look at that as well where engagement has paid off, but so far, it seems like silicon valley has come to the trump administration wanting to talk about immigration, and they have gone nowhere. trump has gone the exact opposite direction. emily: thank you so much, max, as always for stopping by. you can read his story in this week's edition of the bloomberg businessweek on newsstands now. coming up, hulu is taking a victory lap after its original show "handmaid's tale" snagged 13 emmy nominations. we'll hear about how the company is getting noticed in the crowded streaming space. this is bloomberg. ♪ emily: in media news
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negotiations to acquire media , companies networks are grabbing that a deal could be announced as soon as this month. this according to people familiar with the matter. both discovery corporation and viacom are vying to buy the company. hulu with a big push into original content. we talked with the ceo about how the company is going directly up against amazon and netflix thanks to its latest success ,"th "the handmaid's tale which just received 13 emmy nominations. >> you know, we started original programming at hulu five years ago, and our most recent batch started a year-and-a-half ago. we have been in business with some of the best out there. but this one is really special. it has broken through in a way nothing ever has for us. so we are really excited about it. emily: how do you get people outside of los angeles and new york to watch it? >> they do. a large chunk of our viewership
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is in the middle of the country. we do a lot of marketing all over the country. it is a story that resonates not only in new york and los angeles, but all over the world. emily: what is a mix of originals versus licensed content? mike: from a number of titles standpoint, it is very small. we have 3500 series of tv across the whole platform and about 20 originals. consumption is a different matter. they over perform licensed content as a general matter. emily: netflix is spending billions on original content. what is your programming budget like? mike: we spent an awful lot of money. obviously, we are not spending as much as netflix is this year, but we are aggressively investing. i think it is important we are selective and thoughtful about our content strategy. emily: you seem to be licensing a lot of reruns. i am curious what the strategy is there. mike: we are trying to have your favorite show. when we look at licensing content, we're focused on certain genres and content types consumers --t
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customers want. emily: given how aggressively netflix and amazon are in the market now, i wonder, how hard is it to get a pension for these shows? we are in the golden age of tv, but more is not always better, right? mike: when you look at the competition, there are 300 to 500 scripted shows on tv every year. so we are looking to break through the clutter of those shows. when we saw "the handmaid's tale ," we saw a great script, great cast and we started seeing the , episodes come in and thought we have to put our weight behind this. we started the campaign out with two ads in the super bowl. that is that level of advertising we have to do now. emily: are you only as good as your last hit? is all about finding the next hit? mike: it is important. you cannot just launch want and not have any more in the future. for us, we believe this is the first of many. we are excited what we have in development and are in production on this year. we are doing another show called "castle rock," with jj abrams
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and stephen king. we are doing a show called "looming tower." a lot of interesting shows coming. we hope this is not the last. emily: you do not know what makes a good show. you just have to give it a try, but there has to be more to it than that. you guys must be doing some sort of experimentation and research into what works and what people want to watch, right? mike: we certainly do. there is a lot you can learn, but ultimately, it is about story, characters, and world. if the show does not have two of those three or three of those three, it makes it tough to break through. emily: will you ever release a movies in theaters, like netflix and amazon are doing? mike: we have not gone into the original theatrical business. never say never, but that is not part of our strategy today. emily: you rolled out a live tv service curious about early , results. mike: it is going really well. we launched it two months ago. we roll it out to new devices every week. we are updating the service. we have 145 affiliates on board across the country. the demand has been really high.
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we are going to push hard in the fall as we get the rest of our devices rolled out. i think you will be hearing a lot about it in the fall. emily: what networks have been the most popular? mike: you know, it is interesting. when live sporting events are on, those seem to be the most popular same as on regular , television. we have been interested to see lifestyle programming is doing really well. of course, big scripted shows. we launched hbo two weeks ago. "game of thrones," is pretty big. not abnormal from what you would expect. emily: any network you had to leave out that you regret? mike: well, for us, what we looked at as we try to put together a package that starts with sports. we started out making sure we had a compelling and competitive sports offering. we started there and have added script networks, a&e, so we are comfortable with the packaging we have today. we will see what happens in the future. emily: what is it like running a media company with four of the
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biggest media businesses and bosses? mike: you get a lot of benefits. we receive a lot. not only are they funding us and our ambitions, but they are great partners, very smart people that we lean on. it is a great organization. they are powerful and helpful. emily: do they ever disagree, and is that a problem? how do you handle it? mike: i would not say everyone agrees all the time, but i knew when i came in that they were aligned. i was on the board of hulu as a member of the fox contingent, and when we reinvested, everyone was largely on the case for the last four years. emily: you said you are interested in international expansion. when and where? mike: we have not settled on that just yet. we are looking at a lot of different ideas. when you look at us, we can stream for free. we have a variety of things we can do internationally.
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i would not be surprised if within a couple of years we are not talking about a few more markets. emily: people say we are in the golden age of tv. do you agree? what is next? mike: it is interesting. if you go back 30 years and look at what existed 30 years ago, three or four broadcast networks. over the last 30 years, you have gone from that to 500 cable channels, and all of this stuff is happening digitally. i think we are in the golden age, but i think choice and genres is going to be the future. you can find everything you want, every show that has ever been made on your phone right now, and i think that continues over time. you will be able to see what -- whatever you want wherever , you want it, and that is exciting. emily: my conversation with the -- with mike hopkins ceo of , hulu. coming up, swedish-based phone carrier reported strong earnings this week. what is behind their growth, next. this is bloomberg. ♪ >> i am paul allen with the
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latest first word news. the second round of brexit talks wound up with key divisions on display. negotiator refused to give the ground, telling the u.k. team to come back next month with more detail. a suggestionff that flexibility is needed on both sides. the first round of talks with about organizations, presentation, and clarification. britishrvey says exporters are sleepwalking into brexit, unprepared for leaving the e.u. of 550from lloyds bank
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percent have yet to review their plans, more than a year after the referendum. that is despite the e.u. for being a trading power for nine companies out of 10. they are concerned about a wait and see approach is not an adequate strategy. arends explained as have removed biological samples from the remains of artist salvador dali in an attempt to settle a paternity suit. died in 1989 and was buried in catalonia. a woman claims she is his daughter, claiming he had an sheir with her mother when was his housekeeper. samples will be analyzed in madrid. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> i am sophie kamaruddin with a check on the markets. equity investors ready for the weekend after we saw the boj end ecb behind us.
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the aussie dollar plunging 1%. sliding,nd yields losing eight basis points. of the three year yield has its steepest i've since march. the aussie was already on a theyrend on speculation were looking to contain the echo -- currency's rally. -- bets on a rate hike at the rba in february have fallen to 34.2%. that is no higher than 18% probability we saw at the end of next week. we see the aussie continuing to slide. pulling up this function on the terminal to show you that context. the aussie dollar the worst performer globally by far, given the near 1% drop for the currency. the korean won is sitting 1%,ty, gaining 1/3 of gaining for the seventh day of
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eight. the kiwi is at the highest since september of 2016, gaining 2/10 of 1%. the kiwi currency is not too much of a worry, reflecting the economy's strength. ♪ emily: this is "bloomberg technology," i am emily chang. microsoft reporting sales that topped estimates. sales still up and adjusted trading, sales rose 9%. demand for its azure cloud services almost doubling. by thers are pleased turnaround strategy, his efforts to turn the company into a cloud computing juggernaut are paying off. joining us now from new york, rana.on ron a -- anarag >> a very strong results from microsoft. it is tough to find holes in it.
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we have to see what the estimates are for fiscal year 2018. especially the discussion among investors that as we look at next year, what type of growth we could be. emily: data centers are really expensive. microsoft ismount investing in growing this business. anurag: one of the most important things you have to see, microsoft is one of the few companies that did not worry about legacy products and invested heavily into the cloud business. back in their gross margins were 2010, around 80%. now they are hovering around 60% or so. a large portion of that is their effort to move their product portfolio to the cloud. in your infancy you need to invest more. those products are not as profitable. as time goes along, the growth margins should improve, which is what we have started to see now. this is very special for microsoft.
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emily: let's talk about some of those legacy products. windows is one of them, pc shipments are falling, year after year. what does that mean for windows? guest: at the end of the day, when you look at microsoft windows's franchise, it could be a service business. it would just be the foundation of what you do, similar to their cloud platform, azure. where if you need rock computing power, you can use it. they kick will become a what services do you add on top of that? which is one of the things they are pushing very strongly right now the new hybrid cloud , product, azure stock. we think that has the potential to drive, increase sales for the upcoming years. emily: what about surface? the hardware line has been struggling, it is a small portion of their business. they have come out with a new devices. do you see potential for the surface line to be truly reinvigorated?
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anurag: the surface line at should improve in sales as time goes on. but for microsoft, hardware is not so much -- it is not that they are going to make billions of dollars in hardware alone, this is one way for them to show their leadership in technology. and leadership in design, and what their partners can do with the technology they're building. it is all about the software. hardware is just a way to showcase the strength of their software products. emily: how worried should amazon and google be about microsoft? anurag: the cloud market is so big there is a place for everybody in it. one of the things i talk about regularly is, if you look at the cloud spending, it hovers around $200 billion. total tech spending is about $1.5 trillion to $2 trillion. cloud spending is still a small portion. as the market grows, there is a space for a lot of players to be.
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emily: thank you so much for joining us. swedish telecom operator tele2 reported impressive earnings. the phone carrier with operations from kazakhstan to the netherlands rose the most in three months. this, after raising its guidance and reported accelerating subscriber growth. caroline hyde caught up with the tele2 ceo in london and started by asking what the secret sauce is to their recent success. >> secret sauce, focused on productivity. we are a very simple, focused mobile operator. our mission is to liberate our customers to live a more connected life. it would be very much pushing connectivity. for a number of years we saw over-the-top consumption has increased. we take the opportunity to think about, how are we going to monetize that over connectivity?
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that is what we are focused on. onoline: the focus has been disrupting certain countries. in particular, you're in the netherlands shaping different packages. how are we seeing people move on to that? are you managing to draw them from the competitors? are you striking any price war? allison: whenever there is a great example where the consumer has been badly served for many years because pricing has been held high, versus the average consumption in sweden up until recently has been 4.5 per month. the netherlands was less than one. we have challenged the other companies in the market, you have seen it increase in the last year. we think consumers get a much better experience when they are 4g networks than when they are on wi-fi. not just from a speed point of
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view but from a security point of view. we are very much stimulating demand on 4g networks. once you get consumers onto the 4g network, they stay with you longer, become loyal. that is what we want, satisfied customers that stay with us. caroline: and you want them to trade up into bigger and bigger packages. how do you do that when you are in an unlimited package? allison: in finland, the average consumption is 10 or 11 gigs per month. it is an advantage. there will be a technology change. there will be new ways of offering the opportunity to trade up. caroline: when you look how other companies have reacted in the netherlands, how have they -- is it like we saw in the u.s.? is it something you are seeing, and how do you keep a step ahead of that competition? allison: the vodafone merger is
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focused on pushing converged services, the bundle. they are pushing mobile and tv. we are pushing a great mobile product. we are focused on an individual rather than a household. so far, that is working for us. caroline: why not go for that triple player? it seems to have been the golden goose for a lot of the other players in europe. why does it not make financial sense? allison: the consumer does not need it. they only go for it if the operator discounts part of the service. the individual is more connected to the mobile device. whereas the household is connected to the tv and fixed broadband. we think there are two very different purchasing behaviors. we focus on the individual and first pushing mobile technology. we believe we have the best
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mobile technologies to push. we have not invested in our fixed network in the netherlands and we are just pushing mobile. caroline: you are interested in security, big theme. as to why you would want your customers to use 4g. is it security prominent in your customer base's minds? particularly as we see hacking become more a regular occurrence? we see: absolutely, and it in their enterprise thenesses and b2b for all big swedish banks. they are looking increasingly for us to help them develop products around securities. with gdpr and the new legislation around privacy, it is a huge responsibility to protect individual's private information. caroline: are the regulators getting it, are there the right incentives to help people become more cyber-focused? guest: it is not an area of the
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-- that the regulators are focused on with individuals. they are putting more pressure on industry to hold private individual's information. be, -- becomeser more aware of hacking, they are focused on that information and expect us to treat their information with high-security. caroline: talking of regulators, we have seen in sweden the top telecom company starting to investigate -- the e.u. commissioner seems to be everywhere. how do you deal with that? guest: we were recently approached under the investigation. you just accommodate all the questions and give them the information they need. we sit and wait and see what they come up with. caroline: you are sitting and waiting at the moment. they were recently visited in april for an investigation.
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we had them on our site for three or four days. we fully accommodated all of their questions. caroline: are you worried about it or are investors worried about it? allison: no, there is nothing to say that we have done anything wrong. we run our business with the highest of ethical standards. there is nothing to say, that the investigation was triggered by any one allegation. sometimes they can be triggered just because they want to do some testing or want to test one legal aspect. we do not know. but time will tell. emily: tele2 ceo allison kirkby there. one more story out of europe. the british government needs a few more weeks to decide if rupert murdoch's 21st century fox to take over sky. that is according to the culture secretary, karen bradley. she may still refer it for an
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investigation of murdoch's media influence. coming up, see how chrysler revs up for its electric minivan. where the auto giant is focusing its push. this is bloomberg. ♪ emily: a reassuring sign for
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retailers who have been battered by e-commerce. sears has agreed to sell its well-known kenmore appliances on amazon. the chain will also integrate its smart appliances with alexa, amazon's speech-activated assistant. that means the company's air conditioners and other devices will respond to voice commands. fiat chrysler is setting its sights on tesla's home turf with a minivan that can run on a rechargeable battery. they will rethink marketing strategy.
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fiat chrysler is calling the pacifica model a hybrid and is leaving out the second part. jamie butters joins us now from michigan. what is your take on their marketing campaign? jamie it seems smart. clearly, their research shows that most americans, especially minivan buyers, who are not the most high tech or gear-headed consumers, get a little bit of range anxiety from the idea of a plug. it fills them with dread, the idea they will get stuck by the side of the road with a car full of screaming kids and they do not want that. the california market is the california market is different. it is much more familiar with electric vehicles, with plug-in vehicles, battery hybrids, fuel-cell vehicles. they got feedback from their marketers that this market was different, and please help us sell the plug. a state-specific campaign charges against -- across
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california. are they that much more amenable to electric vehicles? jamie: i think so. you have teslas, which are very common in your neck of the woods. i hardly ever see them here in detroit. two or three of them. it is a more advanced market. we always said about toyota and honda, they first broke into the u.s. market in california. very popular there. then worked their way to the , middle of the country. we definitely saw some of that. the thinking is within a few years, everyone will become comfortable with plug-ins. at this point, it is mostly a california thing. emily: you also have apple tech companies encouraging their companies to drive electric cars. jamie: absolutely. so many employers, especially in the bay area. but up and down the california coast, where you see companies that have ev charging parking spots and you get better
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parking, you get the charge up your car, then you do not even have to have a charging unit at home. that is where they are focusing a lot of their initial effort, going to these employers. about 80% of this across california tour will focus on workplace events where they can have people come down during their lunch, show them what the vehicle is like, let them have a test drive. emily: talk to us about the long-term plan for the pacifica and how it is selling more broadly. jamie: it is a brand-new vehicle, kind of a breakthrough. the old chrysler, four generations ago, really invented the minivan. they have done well, but since been eclipsed by toyota and honda with the honda odyssey and toyota sienna. they still let -- sell it at higher prices and are similar to the chrysler minivans.
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they still have the dodge as the lower-priced vehicle. the regular one that is gas burning can cost $50,000, which blew my mind for a minivan. but it drives nicer, it is better put together. they are winning quality awards over toyota and honda, which you never used to see from a chrysler. it is not their strength. neither is fuel economy. they are trying to move upscale, stay competitive, go where consumer demand has gone which , is better quality vehicles, interiors, fuel economy, and including electric. emily: jamie butters, our automotive reporter for bloomberg news, thank you, as always. coming up, opentable strategies for growth as the competition in food tech heats up. how they see the company sitting in the delivery landscape. and we have the ceo of lululemon joining bloomberg surveillance giving his outlook on the , retailer. catch that conversation and 5:30 a.m. eastern. this is bloomberg. ♪ emily: facebook is planning to
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test a tool to drive more subscriptions to publishers. it will be in their instant articles program. that is where they are posted directly into the media site instead of sending the user to the publisher's own website. it could provide a benefit for newspapers and magazines as facebook is facing increasing subscription growth. there's been no shortage of tech companies focusing on food. from a blue apron's recent ipo and amazon's bid to buy whole foods. how company growth is it shaping up. >> there are two huge growth opportunities. one is from global companies. we are part of the largest
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travel company in the world now, yet we are better known in english-speaking parts of the world. the idea we could become the global dining passport, no matter what city you wake up in, that you could have curated experiences and go book is a huge opportunity for us. the second big opportunity is around having opentable stand for more than just fine dining, occasion-based eating experiences. we want to be known for everyday dining. when you look at the frequency of our user, we know they are going out to eat in 2015. that is outside their home. we believe that we can be part. what does that mean for us? it means having more restaurants that are casual in nature. it means rethinking what the reservation actually is. if you look at our mobile app, within 90 minutes of feeding time, 20% of our reservations are coming our way.
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it is not a reservation anymore, but a homing beacon for what is around me, right now? thinking about the booking and being part of that everyday dining opportunity. emily: yelp is getting into reservations. airbnb is moving into experiences. what is your answer to that? restaurants are a linearly scaling model. we have been added almost 20 years. just the enormity of the scale is hard to replicate quickly. a lot of our competitors have 1000, some only have 200 restaurants. if i am a diner looking for choice that does not necessarily , solve choice. emily: you have long-standing relationships with restaurants, would you ever get into delivery? it is a very hot area. i know they all do slightly different things. there is some sort of
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opportunity there. guest: execution is the key here. i think at logistics of delivery is challenging and we are not going to play that game. when i think about the operating system for a restaurant, it makes sense with all the different delivery options to help flow into how the kitchen works. then, i think opentable could play a part. emily: my interview there with opentable ceo christa quarles. that does it for this edition of bloomberg technology. all episodes are live streaming on twitter. check us out weekdays at 5:00 p.m. in new york, 2:00 p.m. in san francisco. this is bloomberg. ♪
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>> the following program is a paid advertisement for the hd mirror cam. announcer: yep, they are out there, driving recklessly, causing accidents and driving up your insurance rates. this is a show about car accidents. ♪ classic cars, and the hd mirror cam, the personal security camera for your car. you have seen it, accidents caught on camera with the hd

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