Transcripts For BLOOMBERG Bloomberg West 20140113 : vimarsan

To buy its major rival, Time Warner Cable, for a massive sum, over 60 billion. And it is the checkin app that many had given up on, but now foursquare is telling you what is nearby and giving you ads on the spot. About theo the ceo turnaround. Nest up, google is buying labs in an all cash deal, still subject to regulators. It is part of googles push deeper and devices. By awas founded in 2010 former apple executive and matt rogers. Google has the our senior west coast correspondent Jon Erlichman has been following this story from l. A. As i mentioned, faddell feelss cofounder nest like apple. I always thought if anyone would die them, it would be apple. Why google . For the position for google, apple, and samsung in the story, here is how things may be playing out. Google has never shied away from doing an acquisition if it allows them to go into a new area. Keywonder if this is their to getting into the connected home and a bigger way, which you just alluded to. I was at the Consumer Electronics show in las vegas. You see the internet connected everything. Light bulbs, etc. Google always comes up in those conversations. You have samsung and air flashier ways getting into the kitchen. Buying righte now allows them to get into this world with a really smart people who are dedicated to continuing down this path. To answer your question, maybe apple is working on some of their own stuff. Who knows . That would be my speculation. You always wonder what is going on with google. They are working on driverless cars. Android could be on not only every smartphone, but every appliance. What is the big picture for google . The pieces do not have to come exactly together. It will come together with thermostats i do not know we can say that. What we can say, google, led by larry page, is very focused on the future. Different industries. Going where technology is changing those industries. Whether it is mobile, robotic, what is happening in the kitchen, i think those are areas of interest for google and that is a big part of this deal. We are going to go deeper into this deal. Ari leavy is joining us from new york. Why google and not apple . Internet search for google has been the core business, desk search and advertising. Increasingly, the internet is not based on search. It is not based on desktop. It is what youre doing on your mobile phone, what you were doing on your tv. What youre doing in your living room. What your thermostat is doing. Those are not areas where google is a leader. That is where the internet is going. You will knows if it wants to continue to be the internet company, it has to go to where the internet is being used. That is why the data here is crucial to googles business. Apple we have not seen apple spend this kind of money on companies. Apple may be interested in that and not willing to pull the trigger because they do not want to spend the cash or the hubris of the company does not allow them to, we do not know. May be a little trigger shy. We were talking all last week about the Consumer Electronics show. Samsung announced to the connected home. Companies are in watches and glasses and smart tvs. Apple is doing none of that. Is apple a little bit behind, jon . Everythinguld see apple is working on, we might go, oh, i get it. Of course apple does not want to tell us, so we cannot answer that question well. You also wonder if apple were to do a deal like this, it would raise questions about whether faddell tony fidel back into the company, whether that would create all these new storylines. Y had a pretty good there was a focus on this company from googles capital. They had a focus on where this economy was going. There was a thermostat that may have gotten them excited and in turn google got excited and said, hey, 3 billionplus, that is good with us. Faddellerviewed tony three months ago and he gave zero indication he was interested in selling the howany. I asked him about he thought more broadly about future products or nest. Take a listen to what he had to say. Inc. About us smartphone, all of the sensors in a smartphone, think about a smartphone, all of the sensors in a smartphone, and what kind of apps you can layer on top of it . So what is next for nest, ari . They have done this mode detector. They have done a smoke detector. What else . Going to the Digital World everything can be monitored. Things that i put on my stove, to boil water. Anything in a home, why couldnt it be connected westmark why couldnt nest be the software or the hardware layer for it . For weighing in on it. We will be speaking to tony faddell tomorrow on the Early Edition of bloomberg west tomorrow. Charter communications is making for Time Warner Cable. They had a buying offer for 61 billion i said 61 billion. The ceo talked about using Time Warner Cable to create a internet and tv provider. He has not received a serious proposal from Time Warner Cable and will bring it to shareholders. It is great to be there with you in person. At what is going on here . Why make a bid for a company that does not want it . It is getting the ball going really. Decision,s made the time warner is not going to engage. Lets take this to shareholders. Lets not keep banging our heads against the wall with a company that does not want to anthrax. We will take this to shareholders and see what we can do but snarky banging our heads against the wall of the company that does not want to interact. We will take this to shareholders and see what we can do. What are shareholders going to say . That it is not enough. They almost certainly will not agree. From what we hear, time warner could counter with an offer of well over 150 per share. They will probably meet in the middle. The question is, can a deal get done with charter, or can another Cable Company get cox or comcast. What is charter to get bigger . This would make them much bigger. It would give them a lot more leverage to negotiate with content companies. They would also be able to have potentially more as validation down the road, maybe even get as big as comcast. I know you will be watching this. Alec sherman covers alex sherman covers media for bloomberg news. A great show, coming up. Welcome back to bloomberg west. I am emily chang. We are east today. And is here with us thehe desk all week long. Space for Tech Companies in new york for the last year has more than doubled. Not just manhattan, but also brooklyn. Maybe new york can compete with San Francisco for office space, but what about talent . You not only founded foursquare here, but also dodgeball, which you sold to google. That is right. You are kind of a godfather out here, arent you . I dont know. Thats kind of a heavy term. I have been in the tech season for number of years and the tech scene for number of years. Criticism ever get for coming out here . The first question we got was why did you start in new york . We wanted to build a really rock Star Engineering team in new york. Ofwe have seen a number waves of tech year in new york. How would you describe this current one may be compared to the last one . Goes inems like it waves. It would get built up and go away, get built up and go away. I think this version is built to stay for a while. We have had multiple generations of entrepreneurs. It has really helped Companies Grow and be successful. I think the number of startups hit the fiveyear high last year. You do not often see a startup in new york break into the multibilliondollar valuation category. You know . Something that holds Companies Back . We were just talking about branch. Facebook. Tumblr. I do not think it is holding back. I think it is a matter of time. If you compare the new york scene to the valley. The scene in the valley is decadesold. Old. Ork may be a decade i think when you get more companies in new york between mongo d etsy and there is plenty of opportunity for those things to grow. You are seeing more Companies Set up shop in brooklyn as opposed to lower manhattan. I assume that is because that is where people live. Yes. If you live there, it is more accessible to you. Its also get a really fantastic office space. A lot of our employees live downtown. Its easy for them. I imagine a lot of folks are seeing that type of space in brooklyn as well. We are looking at a map of check out pennies that are expanding. We have facebook, google, yahoo later in the show we will talk about artificial intelligence. Simply to get to your point about resources, there is to get your point about resources, there is also an academic community. In my you and it is not the same as stanford and cal. I think the thinking five years ago if you were a really scientist,mputer maybe you would end up on the list and that would be the first choice. I think it is a hard decision now. Do i want to go to new york or San Francisco . Not to mention that wall street was snapping up a lot of engineers. Maybe some of those people not in the world of finance anymore sure. They make fantastic data scientists. For folks in our space particularly, we are doing a lot of things with big data and analyzing that data. I want to talk a little bit about trends. You post a lot on twitter. You are on instagram. What do you think about the social media landscape . Twitter versus facebook versus snapchat. What do you think aboutsnapchat . It so much. Use i think now that there are a number of tools for people to use, they use what they are capable of. I use foursquare, twitter, and maybe a little bit of facebook. They werethink that right to turn down 3 billion for facebook . You sold the company wants. Empathize. You come around to thinking your way of thinking was not right. I respect that. We will talk more about your grand vision with foursquare. Foursquare. E ceo of we will talk more about his turnaround plans, coming up on bloomberg west. Welcome back to bloomberg west. I am emily chang. With sam grobart on the set in new york. We are talking about foursquare. The company last year raised 40 million worth of debt and another 35 million worth of funding. Foursquares ceo Dennis Crowley is with us as well. You are using this money for the new foursquare. More of a location discovery app. Tell us about it. Foursquare has always been about location discovery. Two things we have been thinking about how to monetize the users and the second big piece of it is exploring what we can do with ambient location awareness. What if you do not have to checkin everywhere you go. Everywhere you go . Your device knows that youre an adult and that another part of town. So continuing financing and getting the company wellfunded toanother step on a roadmap executing the vision. I know we talked at the beginning of the year and the end of the year, and you had about 6 million chickens per day. Is that growing . Lot more people using foursquare for search and discovery. The usage has started to shift a little bit. Personally yes. I will confess, i did not really care about checking in. Im married, ive got kids. But when i realized i could use it as a recommendation engine, when i realized i was not just broadcasting my presence, but i could see where my friends had been in what they like, all of a sudden it sort of snapped to me. That is more in line with one forward now. We use it all the time for this. We use it or search and discovery. It is so much better than yelp. It is so much better. We are continuing to explore that. One of the things i am most route of this year, we have a version that recognizes when you go into a new place. If you walk into a restaurant or clothing store, we can alert you there is a special here. You can save 20 if you use your amex. You walk into this restaurant, this is the best dish on the menu. Its a really powerful thing. We are one of the only companies that can do that. The moneymaking potential. You guys are expected to make a lot more money this year than last year. How . We have been a lean beast tools that are really effective to drive customers into businesses. Have invented these tools that are really effective to drive customers into businesses. To see the next part of the chain . Yes, exactly, to evaluate the roi. That is something that we can do because we have all of these checkins, that no one else can do. Can you give us a sense of what you are expecting this year . Not have to share those things you do not have to. I would ruin the surprise for 2014. Every quarter we hold revenue all the way to 2013 and we expect really great things by the end of this year, too. Devices going into wearables do you envision foursquare having a big future in Wearable Technology . Our vision is not so much something that you pull out of your pocket and use all of the time. What can we do with displays on the wrist question mark what can we do possibly with google class . We have what can you do with displays on the wrist . What can we do possibly with google class . We have a prototype. That is really exciting for us. We will be back with more with the foursquare ceo Dennis Crowley. I am emily chang with your Bloomberg Top headlines. Greece was the last of the four to show an early upgrade program. They just ended the want of a program for month after launching it. No explanation given. Traffic to the website is diverted to a family plan. Worldompanies around the and the latest battleground is in france. That is where protesting taxidrivers attacked an uber car. Were both in the car and tweeted about the incident saying they were shaken up but not heard. An acquisition as it looks to expand into the apparel sector. sales for 43f million dollars. It sells clothes and home decor at a discount. Group onset it is seeing growing customer demand. We are in new york this week with the Senior Writer for bloomberg businessweek. Were kicking off a special series today. About how bigng companies are using it to dramatically change the way we communicate here. Scientist and the watson of ibms computer. This whole idea of a personal robert is age old. How did watson come to be . It is about pressing the envelope, breaking new ground. Executives thought can we create a computer that can and do with humans incredibly hard human tasks. It was an amazing opportunity for a richard scientist like myself. It was allre life about can we get computers to mimic the way humans think . Taking it step by step. Isnt one of the things that makes what and so special is its ability to function with natural language . That is one of the biggest challenges. How do we understand language . Computers are going to data jockeys to thought partners. It is about understanding what they see. What is the meaning behind it . Ultimately meaning is going to just trump data. There is too much out there. How do i get an understanding of it . When it comes to language understanding, where would you say we are right now . Are we at the toddler or adult stage . We have watson seen things go from watson we have seen things go from watson rtoto siri. It is not like that. If you do something sophisticated that would take a smart person hours or weeks to stitch together and figure out and then in other areas it will seem really stupid. Computers process the data very differently than humans do. I think one of the interesting Going Forward is in dutch is can we get more of a convergence and machines to think more like humans . Can the process data in a similar way . We are not there yet. Theres a lot of work to do. This is something you think about a lot in terms of contemplating the future. We think a lot of the intersection between people asking computers questions and asking them for advice immersing the computers being really proactive and recognizing the context and say i know you do not ask me for anything but i sensed something was going on. And tuning into that context. How ai will progress is that to really get computers to start and process this they have to collaborate together. There is this joint intelligence idea. To learnputer have from you be human and the human has to learn from the computer. You have this interaction working as you both work together. That is where the style of learning will change. Can watson feel . Can he sense a motion . Youre asking a really great question. Is that a problem . Computers and humans are not the same thing. When you and i taught, we are using language with an elaborate indexing system two point to our shared experience. That shared experience as a human experience. You have learned things. When we speak i look at you. I do not know, the only way i know if you understanding these words is you are nodding right now. That is feedback saying maybe my words are pointing into her brain somewhere and we have this common understanding. Humans do not have that i am sorry, he computers do not have that. They have massive amounts of data but not the human experience. Quite so there is communication happening. Exactly. It is usually contextual. If you are using all kinds of information for around you. You mentioned foursquare. You want to capture more and more context. The more features that can allow you to narrow into what you mean by a particular word or phrase is going to facilitate that dialogue between a human and the scene. Did you see the movie her . Not yet. I have seen appeared i thought it was great. It was amazing. It created a really thought provoking and seemingly plausible possible future with a computer that has a sense of humor, to understand what youre saying. That is the thing. Source of the meaning. We are the source of what is funny. We are the source of what is beautiful. We are the source of what is elegant. Learn andcan start to detect that meaning. They are not the source of that meaning. Can detect a pond, it is not laughing at the pun. It can detect it and you should laugh at it. What are some of the things that watson will never be able to do . We want to be really careful of saying never. Always. That is what it is a good question. To move from the shallow understanding of language that we have today with things like watson to a deeper understanding gete computers can really the deep meaning and dialogue and collaborate in a meaningful way. Things are going to have to change in advance quite a bit. My view is that were going to see an interaction between human and machine that is quite intimate. You are working in solving a problem together. The computer does not know the answer. You do not know the answer. You have access to a number of features. The computer can access data and process it in ways that you cannot. You work to solve that problem. Through that process, the youputer is learning how interpret the information. You get that which will create this joint intelligence. That is really; cool to me. Can ask you another question . We were talking about new york city as a tech help. Ibm is moving the watson operation to watson. I work for ibm but im not a spokesperson. I read the news when you did. That is fantastic. I think you are exactly right. I think they made a big investment in manhattan and ai. Been ino see, who has ai forever, to see that kind of investment pop up how do you see google and facebook staking out their territory in ai . Who is going to do what . And foursquare. Has no choice but get smarter. Theres too much data. It is going to have to sympathize and understand reasons, synthesize. Answering the questions and giving you the exact information. It has to go beyond the shallow pattern recognition into the deep understanding. Had to think were going to interact with a lot of these engines . Is it being more proactive . It will be multimodal. Therell be different ways to facilitate. Some things are really easy to do. Some are easier to do typing. See moreoure going to interactions occurring. How do you see ai in the future of foursquare . That is what we are trying to do. Your withrt to detect some friends. Youre walking this direction. You never been to this paper shared to this neighborhood. Youre collecting an enormous amount of location data. Were listening to all the signal we get from the foam. They are just sensors. We listen to as many centers of possible and try to push information we think will be useful to the user. It is a form of a lot of this ai that were talking about. In terms of getting down to business, i know you do not work for ibm anymore. Bm is betting big on watson potential 10a billion in revenue. They sounded very difficult to turn it into a business. Customers are saying it takes watson too long to learned information we need and it is an arduous process for ibm to input all of the information from specific businesses in order to be able to answer questions correctly. What kind of challenges is ibm going to run into when it comes to turning into a real business . There are a lot of challenges. Think ibm is going to have a leg up. Theyre going to make the kind of advances that are needed. The hope and the expectation has to work this way. More sophisticated learning outcomes will make it cheaper and cheaper to customize the technology. Are we there yet . We are on the road. Cheaper andke it easier to customize the solutions . Had we worked on these learning rhythms . These have to be extremely oferful and take advantage continuous collaborative interaction with humans. It is not like lets go trade in the closet and come out. It has to continually learn as it is interacting with humans. It will be a long process. He creator of watson you are a senior technologist there. Dennis crowley, i know youre off to San Francisco. Youre literally getting on a plane after this. Thank you so much for stopping by today. The autost players in industry dissenting on detroit for this years auto show. We will speak with the ceo of mercedesbenz usa next. You can watch a streaming on your phone, tablet, and bloomberg. Com. The auto show is happening right now in detroit. One of the big things this year is affordable luxury cars, high tech luxury cars, too. Matt miller has been at the auto show all week long talking to the biggest names. Hows it going . It is going fantastically well. Im having a lot of fun here. I am here with the head of mercedes usa north america. All,e ask you first of when i think is Silicon Valley or the guys i hang out with that are from there or Silicon Valley in new york, a lot of people are getting into the cla because they have done one may think it would be ostentatious to get in s class already. What is neat about that is they want a smaller vehicle like the c class or the cla. And bring in new buyers. We just launch the cla. It is 10 years younger than the c class. Were bringing younger folks in. In 10 people that buy one are new to the franchise. It is duke exactly what we wanted it to do. Youre starting to build in tuscaloosa. M re build a lot of the cars that you sell here. A growing business. Your number one and luxury cars here. We had a great year. They outgrew the luxury market. This launch past year. Such a rave reviews from everybody. The smallest blocks to the largest car magazines loved it. This show focuses on tech. This is one of the most logically advanced cars out there. What is so neat is all the technology is going to be available in the c class in a car that will star in the need 30s. Gone are the days when only biggest loser folks thats been said of 5,000 for their car that spend 75,000 for their car get the latest breakthroughs. That is coming to a brandnew price point. The c class will be the most intelligent car in the planet. It will be able to have semi iving. Mous dr it sees 360 degrees around you. It makes a 3d picture of its position in space and then respond accordingly. Its best form. How long until i can get on the 401 k . All of these are in place. It is only a matter of commercializing them at a cost that customers can afford it. Then it will have to be legislated. Itll have to be insured. To answer your question, and site 10 years is about the timeframe when you might be able to just put it in your navigation and off you go and have a nice chat with whoever you are driving with. Thank you so much for spending time with us. 10 more years until you can have your car commit commute to work for you. That will be a long way. How fun. Coming up well be talking about the golden globes, amy poehler, and tina fey. They were fantastic i thought. Netflix became the first reaming service ever to win. More on that coming up. A lot of shows are on netflix this year. Yes. It while it lasts. Youre not going to be feeling so smug in a couple of years when snapshot is appear accepting best drama. Tina fey and amy poehler hosting the golden globes. I thought they did a wonderful job. Nbc said it got the highest ratings in 10 years. Robin wright won the golden globe for best actress in a tv drama. She is in the Netflix Original series house of cards. It is they first golden globe. John ehrlichman is with us from l. A. There is a lot of talk about netflix. They got a lot of nominations but they only won one. Was it a good night . It only takes one to keep the conversation going. What is so amazing about the show is that when they started production on a, they didnt even know if they would be eligible for awards. Then they ended up being a key part of the conversation around the emmys. David fincher ended up winning one. Then the conversation tied to the golden globe. We have a golden globe he cuts of her win. The big benefit shortterm will be that the Second Season of the show will be debuting at about a month time. Maybe they will watch it and get interested in watching the Second Season. They are looking to top how each original is doing in each season of the programming plan. A lot of people do not realize that house of cards was not the Netflix Original series first. Ala hammer is coming back for third season. That show did not get rave reviews. A something it should not get a third season at all. We do not even know what any of the ratings are for any of the shows. Netflix has the information and does not share it with us. It has found a certain audience. He was looking like the smartest guy in the room thinking about what netflix would be in that people would be watching on all their different devices. Original shows become that much more important. I will tweet out that video for people who never saw it. You want smart people . Stevie. That is your man. It is time now for the u. S. Byte. E bwest 191 million. It estimates the number of paid subscription listers around the globe will get to that number by 2019. We are nowhere near that number right now. The taghis because just camets by dre out with their own streaming service. Theyre going after all the people who might be willing to try something other than spot of five. I am a lazy listener. I like pandora. I do not have to do too much. I listened to all of these things. It is my job to. For all of Eastern Services that are out there, s it is spotify, google. No one has cracked it. It is because of ease of use. They seem to model their interfaces off of itunes which is like building a new cruise ship and saying im going to base it on the titanic. It is really complicated. It can turn a lot of people off. Can make it more intuitive, they may have something. If youre going to pay for, it has to be good. All for watching this addition of bloomberg west. We will see later today. Welcome to lunch money. Lets take a look at the menu in motors. We will road trip to detroit. A ford 150 in aluminum . A ceo, dealmaker jimmy lee opens up on how he got where he is in his career, part of a weeklong series here on bloomberg. A tribute to the former israeli Prime Minister laid to rest. Finally, more than just the words. Golden globes, they had it all last night. We will have fun with that