Transcripts For BLOOMBERG Bloomberg West 20150214 : vimarsan

BLOOMBERG Bloomberg West February 14, 2015

His tweaking and making acquisition. Costello spoke with us topic number one twitters acquisition of nearby project a company that connects social media stars with advertisers. Its absolutely the very beginning of providing opportunities to diviners who have done such great work at building this unique community of creators and connecting them to brands we think is just going to be a usome for the brands who want to leverage the great work they do to create stories and then build a career off the fun things. Do you find yourself competing with snap chat with this new generation of video creaters . I think about it more as this unique platform weve developed and this awesome there are these stop Motion Animation experts, there are these comedians, there are these sort of vine magicians through some of the frame by frame animation work they do. And being able to leverage their tall gts to help brands and companies tell their stories across the system we think is really cool. And by bringing nearby on board we think weesh going to be able to do that not just on vine but within twitter itself as well. Thrgs so much energy it makes me wonder whether you tube has squandered some of the opportunity around mobile video. I think theyre going to be lots of players in this native mobile video space. And again, by native mobile i say that a lot. And what i mean when i say that is video primarily produced for consumption on mobile. We led the way there with vine. We just think theres an enormous amount of opportunity there and combying nearby was realizing that opportunity. Were going to do a lot more there as well. A couple weeks ago my and droid twitter ap updated itself to allow for mobile video. As those tools have rolled out what kind of consumption have you seen . Weve seen great usage of them. One of the things weve been fascinated about is how much people are using native mobile video to reply to tweets. So someone will text write a text tweet and mention another user on twitter and that user will reply with a short video. Weve seen that from individual users like gary vainer czechs been doing that a lot. Weve seen it from companys. Medium has been doing that. We just we had the benefit of having seen what was happening in january. As we mentioned that outlook was base t on seeing a return to organic growth, Growth Initiative that is weve had inside the company that are delivering results and then some seasonality where is higher than 4 traditionally. You increased the cadence of product launches. A big one is instant time. Talk about that. One of the things that ive been talking about since we were on the ipl road show is bridging that gap between awareness of twitter and really engaged on twitter. Part of that gap is new users are coming to the platform. They just saw it on tv. They just saw things happening. Its all on twitter right now. Head over there. They sign up for the platform and then they cant find the right accounts to follow. They dont understand how to use it. Its about delivering immediate value to these users the moment they sign up removing the follow friction the way they get value and getting them a great timeline of 20, 40 90 accounts to look at immediately and show them how to use the platform not try to teach them how to use the platform. Youve had some instability. Some managers coming and going. Has that situation stabilized . The short answer is yes. I love the theam that we have in place team that weve had in place. Ive also been particularly enthused by the way my direct reports are building out their bench and strengthening their bench and bringing other leaders in the company. Weve just had a couple more additions. So thats something im enthusiastic. Organizations are always going to evolve and change over time. Do you feel you made mistakes in previous incarnations of the team . I always tell my leaders inside the company, its your job to always be improving your team. And there are all sorts of things you can do to improve your team. Your job is not to defend your team your job is to improve your team. So thats something i focused on and paid careful attention to. I was struck by the internal statement that you made about trolling on twitter. You said that the whole world knows that this bullying happens on the network. We havent done enough to stop it. That was the first time i used the word we suck at this and used crass language like that in a companywide email. Of course thats the one that gets leaked. Not one of my more sophisticated writing memos. Look, the point of writing that note to the company was to let them know i take responsibility for that. Were not just going to go ahead with the status quo any more. Were going to get a lot more aggressive. Its on me to make sure we do that and were going to be aggressive and fast about making changes. So that was about me putting the sort of weight on my shoulders, if you will, and letting the rest of the company know were going to get more aggressive here and quickly. E commerce on twitter. I feel like amazon has been trying to sell me the same portable usb charger since they introduced the charger. Whats the goal . Were still experimenting there. Ive said a number of times that i think the opportunity for twitter is to really be the place for in the moment commerce, now commerce. In the context of seeing some public conversation, oh, yeah i want to that and i get it now. As disdifferent from other kinds of commerce such as heres a cat log of stuff. We have a number of experiments. Were learning a ton. We dont have anything new to announce. I think youll continue to see us explore with different kinds of, what does now commerce really mean in the coming months . And well see what happens. A longterm question. Facebook has 1. 2 billion usesers, is your vision for twitter still is it on the same par . Is it facebook scale . I think our vision for twitter is to have the largest possible audience, the largest daily audience in the world. We believe that twitter is of value and can be of value to every connected person on the planet and thats the strategy were delivering against. Up next, take two is evolving. The company hoping the new game evolved become the next big thing following the steps of grand auto. Tht this is the best of bloomberg west. Cory action has built itsdz franchise but now the company is betting on a first person shooting game called evolve which pits human against monsters just like in real life. Evolve went on sale just recently. Check on the interview take two. Its pretty unique in that went on sale you have an opportunity to play either as a monster or team of four fighting the monster. And as far as we know thats novel. The game won best of show at e both e 3 and games come. Thats never happened before. Well know very soon. How do you make plans to launch such a thing to try to fig crur out what the scale is going to be . I think thats true of every entertainment business. Certainly of the movie business where you spend your money and create a marketing budget. And until the picture opens you basically dont know. We have a little more insight because we interact with retail and they order product from us and they tend to be very expert. They really know the market and can signal to us through their analysis about how our launch is going to look. In other words, its unusual we would ship product and be disappointed how it sold through although it occasionally does happen. In this instance the retailers are very enthusiastic. It still remains to be seen and we never like to claim victory until it occurs. I just dont care about sex and violence as long as i know its going to be there. Is that morally bankrupt or is that just the market is bigger . I think you said it right. You want to know its there. Its incumbent upon us to deliver a rating to stand by the rating and to market appropriately to the right audience. The Rating System used is the most robust in the industry. That is it has the highest level of compliances measured. So when a parent goes to the store to buy a video game for his or her child they know to buy something thats rated e for a child. And if an adult goes to buy an mrated game they know that theres likely to be sexual content or violent content. The same way if you go to an rrated movie or watch an Action Television show you know what to expect. Im a big believer that the right to bring what a publisher wants to the public is terribly important right in america one we need to stand behind. Equally we have a social responsibility to do what we think is right and only to market to appropriate audienceanced and to let people know whats in the box before they get it home. And our ability to do what we think is right is important, our social responsibility to market appropriately is equally important. How do you see who your user is . Do you put them into a small sort of or big groups . Or how do you try to size it . We typically look as consentric circles with the core being sort of hardcore gamers. People who love video games and people for whom its their primary entertainment activities. Who is it . Its all across the board. A bit more male than female but not that much. Do you put them into median age is 37. So really adults. And older adults. I think the reason for that is that one consumes for the rest of ones life the entertainment about which youre passionate about in your late teens and that never changes. Thats why our cohort is growing so rapidly and aging. Obviously as the video game business has been around 35 years. Every year that goes by our median cohort is going to increase in age which suits us just fine. People dont stop playing video games once they play them. Typically. Thai love them and keep loving them. Then the second circle would be people who play video games but not their most important activity. Then the third is broad audience who is sort of interested but its not their primary or even secondary activity. In the case of grand theft auto 5, you have to believe youve addressed the entire market and in other titles you might just address the core market. Certainly our goal is to address the most as possible. And make it as beautiful to look at and compelling to play. You have this partnership in china. Weve been in business with ten cent for some time and they were our partner as we ought to develop it on line in china, which is is a free to play multiplayer game in the Chinese Market and we entered with ten crent because they are the premier company there, how to do it and prepared to mitigate a gool deal of our risk. Its been a great partnership. We have a lot of people on the ground in china. Its still to this day the number one sports title in china for massive multiplayer game. I think we have 24 million registered users and it generates revenues and profits every month. In terms of the way showing profits already. Whats the growth like and does it sort of latch on to the same kind of growth we see with ten cent writ large . Certainly ten cents own growth is a nice backdrop but the game has to stand alone. It continues to grow and we hope it will continue to grow. But right now its month to month. We cant predict whats going to happen. But its looking very positive. Consoles, youre saying the x box. What does that mean for you . Thats a big market for people who love games but is a brand new market. You said it exactly right. People love games in china. Theyre accustomed to playing free to play on line games. So this is a brand new business. So far only the x box has launched. Its a relatively small installed base. We are seeking to get government approval to sell our basketball title there. That would be our first title for the x box in china. Its a massive market 300 Million People in the middle class entire state of americas Consumer Population could fit inside chinas middle class. This remains still a very small market so far. What do you expect in terms of timing . Do you have any idea what the process will be or might it favor local developers of content . So far the content has been sort of balanced with local and international. It would be soft is actually on the ground timing . Do you have in china. That gives them an advantage. All of us need government approval for what we do and that is a bit challenging as you know. But youve already got the nba game playing on ten cent. Does that give you in china. That gives them an advantage. All of us need government approval for what we do and that is a bit challenging as you know. But youve already got the nba game playing on ten cent. Does that give you an advantage . I hope so. And basketball isnt controversial. Competition in the online Delivery Business is hotter than ever, well talk to a publicly traded grub hub next. Im cory johnson and this is the best of bloomberg west. The hungry market for good delivery is spurring competition. Online Food Services are inching closer to your plate. Yell p just ate up online Food Services spending 134 million and grub hub announced two acquisitions recently. So which company is in a position to win . Grub hub spoke with bloomberg about the yell p competition. Its just business as usual for us. E 24 has been around for a while. In fact they had a Business Partnership with yell p for years. Im wondering why they pulled the acquisition. But for us its about the opportunity ahead of us. Theres 70 billion in takeout spent domestically and we processed 1. 83w8 last year. Theres a lot left to go in front of us and thats what were focused on. It must be val dating for them to look at your market and finding it appealing. I want to build the best product and service and thats why we acquired the two rdf companies, restaurant deliveries to now deliver, 15 major markets. Thats what i see as a real opportunity to increase service levels. Lets talk about those. You were once in the business of facilitating an online purchase and then a restaurant went and delivered the food themselves now you want to control the value chain, make those with a grub hub contractor or employee . Why . Sure. First start the majority, the vast majority of our business is still the restaurant delivers it themselves. What we found is that we can increase the level of service and make it more consistent for the diner if were owning the last mile. We can is still the restaurant delivers it themselves. What we found is that we can increase the level of service and make it more maintain the heat of the food. We can make sure the delivery gets there really fast. So by leveraging our technology and scale we think we can bring a better experience to the diner and add a bunch of new restaurants that didnt deliver before. Thats the before. Thats the value were going after. How does it work . Are these employees that are making the deliveries or spin off a kind of uber like service . Were definitely looking around the world and seeing how other people are deploying vast amount of individuals independent contractors is a very strong way to go and we definitely have a lot of those. Do you see the ubers and the side car and uber like company here in San Francisco getting into the business this week of making delifferies. Do you see them as partners or competitors . You know were going to leverage whatever we can to get the food there as fast as possible as hot as possible as high quality. The transportation company, its a different use. They pull over to the curb somebody gets in. Theres new packages. Well see if that gets to the place where you can put someone who goes and gets the food from the restaurant make sure the order is accurate brings it back delivers it rings your doorbell. Well see if that can get there. For now were going to do it because we can do it really well and if in time they can do that, of course well go with that. Lets talk about the value prop position for restaurants. Im a user. Love the service. But its incomplete even here in San Francisco not all restaurants are on the platform. How do you convince restaurants that theyre not leaching commission to you guys and two that theyre not losing the relationship with their customer to an intermediary . Restaurants want to make money. Thats what theyre there to do. They want to process orders and they will leverage whatever they can to do that effectively. So what we bring them is a very low risk very high reward opportunity. We say bluntly, we only make a dime when you make a dollar and then its on us to make them more successful. We help them manage their data, what times are they delivers, these are things we are thinking through. We give them a tablet to make them more efficient to process more orders and then we drive those orders through our 5 million plus active diners in 800 cities across the country so if youre a restaurant tour in a Major Company and especially growing in tier two, three, and suburban markets, youre crazy if youre not on grub hub because you make a lot of money. 20 what extent has open table been a model for you . It does remind me of open table which got a start by providing a lot of money. Technology to restaurants to help them manage their inhouse inventory. Its a pioneer in the networks absolutely. The difference between open table and grub hub is grub hub has a vastly bigger addressable market. So currently, 70 billion in annual takeout sales of which were doing 2. In reservations its much, much smaller. So were looking at our opportunity and really evolving our product. Were trying to figure out how can we add transparency, control, increase the level of service proactively to give diners a better experience so they order more. So as you know for me no conversation is complete without a mention of amazon. Fresh, the net newt tralt is that a plan or net newt tralt is youre watching the best of bloomberg west. Im cory. Tom wheeler says his Net Neutrality proposal will protect the open internet by subjecting it to more regulation. But that has some people looking at it. The worst thing is that it micromanages virtually every possibility of how it operates, opens it to billions of dollars taxes that consumers will have to pay, lawyers filing class actions across the country. There are a whole host of harms that are going to happen. And thats why i only wish that you could see the 3 32 page plan that wont become public until after the f. C. C. Votes on it. It looks like a phone book. Lets talk about these and kind of go through those objections one by one because youve listed a handful. Lets start with the micromanagement. At some point, and ill take the other side. At some point if the skirmyirk is happening at this moment in which a user is trying to use isnt that the place where the regulation has to happen and get involved if there is to be any regulation . Two responses. First nowhere in this document does the agency ever identify any systemic problem with last mile connectivity. They might say the competition is limited but they dont give any examples of isps acting as any compet

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