Transcripts For BLOOMBERG Bloomberg West 20160913

Information was posted online. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. Bloomberg west does next. Emily salesforce ceo calls out oracles desperation move. Our exclusive interview with marc benioff. Pokemon go might change mobile gaming forever. We will speak to the ceo of niantic ahead. The visionary that kick started googles self driving dreams. It is making it possible for anyone with an Internet Connection to join in. First, days after samsung recalled note seven, apple is facing a Technical Glitch around the rollout of its latest operating system. Customers updating their iphones could not turn the phone back on until they plugged the phone into itunes on the computer. The problem was quickly resolved and we apologize to those customers. Apple shares closed on a high despite the glitch. Tmobile andrriers sprint said they were seeing record demand for the iphone seven in the preorder period. Webb, who tried to update his phone and your phone is not working. Softwareownloaded the air. E over the the phone restarts and i was told i had to plug it into itunes and i cannot use it. How significant is this glitch . They patched it up, normally it is fine. Alex in comparison to samsung phones exploding, not the caused discomfort, but people have gone home and would have remedied it. When youere is fear update your iphone because you never know for sure if it is going to work. Alex i did not back my phone up before, and i hope i did not lose a bunch of stuff. Good news from tmobile and sprint. Preorders are coming in at preorders in the past. How significant are these numbers . It is significant because apple said they will not release the first week of sales. The caveat is they have introduced new data plans, which are now unlimited. Of does not know the extent whats to do about the product or trying to take advantage of the new plans. Anyy have they gotten indication how many samsung users may be switching to the iphone because of the recall issues . Early to know. We will probably know by the end of the quarter. It is a massive blow for samsung. Probably, for the first hour, there were people in south applegetting excited that had a similar problem, but apple has ironed it out. Emily the Sales Numbers closing up two. 5 . Investors are confident. Alex the biggest jump in almost two months. Big number. Le is a that stock does not jump a huge amount. Does it suggest people are not concerned about the headphone jack issue . Alex the fan boys are going to go for it no matter what. There is pentup demand. It is two years since the iphone 6 series was released. These people who had been sitting on their iphones, waiting for the new update, they are heading on to the shop, getting on with their carriers and saying i want the new one now. Emily we are looking at the air pods. Alex webb, thank you for the update. Andill have more on samsung the investigation into the galaxy note 7 smartphones later this hour. Salesforce, one of the most acquisitive companies. Than 3. 5 closed more billion deals since february. Brad stone sat down for a ,onversation with marc benioff talking on everything from larry toisons desperation move how he feels about missing out on linkedin. He began with a preview of the einstein platform rolling out at the dream force platform in october. We have almost 200,000 people coming to San Francisco. It is going to be exciting. U2have you to playing playing. We also have einstein coming, which is ai for everyone. It will give all of our customers the power of Artificial Intelligence inside salesforces applications. Enough followed you long to know you do a good job of bringing themes. Last year you talked about the internet of things. , this year, why is it real, when can we expect it . A lot of companies are talking about ai now. A huge movement. One thing that has been great, we bought about a dozen ai companies over the last two or three years. It includes spending 600 million for them. We have taken all of those employees, stitched them an incredible team. The technology includes some of the best ai capabilities i have in. Brad i have seen. How do you convince them to come to a crm company . A crm company. T we are the largest tech company in San Francisco and one of the of the growing Companies Top 10 software companies. We are committed to improving the state of the world. We believe this is a platform for change. They love our 111 model. We give them 1 of the equity back, and time to get focusing on our public schools, as well as the childrens hospitals, homeless. That is important to them. They want to give back as well as hell great products. Have not madenies that shifty yet. Salesforce has. We are a lot more attractive. On the acquisition part, you made about 4 billion in acquisitions. Why has salesforce been so acquisitive . Marc we always buy a company when it is a Great Company with Great Technology and two, the price has to be right. I did not think we were going to buy any businesses at all and a series of things happen that open the door. The biggest thing, we got a phone call that demand where had demandware had an offer from another country and were we going to be part of the process. It is an amazing product used by louis vuitton, adidas, under armour. When customers saw the ability ware toesforce and demandar come together, they will probably sell more than 1 billion. That is amazing. This technology is just incredible. One of the deals you did not do, linkedin. Going back, would you do anything differently. Marc i would do everything differently, but in the cat but it goes in the category you cannot win them all. Up againstng microsoft with the power, resources, and that monopolistic control. We gave it our best shot. We did not win. We wish them the best. Brad does it make microsoft a more formidable competitor . Hey won hp ink is microsoft plus linkedin a more bigger threat to salesforce . In ourou can see it numbers. It is faster growing than microsoft. Crm. E number one in the vast majority of crm deals we win. We will never win them all, but we win most. Brad oracle, early in the of your former colleagues. What does that deal due to oracle . Are they are a stronger competitor . Marc i dont think so. They are doing a desperation revenue. Oost cloud he will be able to boost his cloud revenue and make is 10 billion goal. He still may not be able to make it. Brad when you say things like live tv, domove on you get a call or text later in the day . Relationshiput my is more eternal and enduring. He taught me this. Brad he does not pull punches. Marc he does not. Business is a lot like tennis. You get on the court with your friends, you play as hard as you can, you get upset, you say they things, you go off court, have lunch, a glass of wine, remember how much you love them. I love larry ellison. He has been a great mentor and friend to me. More for me than larry ellison. I am grateful to him. Has had asforce tremendous growth trajectory. The last quarterly results, there was some softness. How much was seasonal and how much of that softness do you still see . Marc last quarter was amazing. Top and bottom line, we beat. We raised for the year. What is amazing for us in the second quarter, in the middle of order two, things happen. One, brexit. It took the euro and dropped it down into midone 20s. Decelerationa of our european revenue. The second thing was we saw softness in the u. S. At the very , specificallyrter in the united states. Those two things combined gave us a quarter that was not optimal for us. It was an execution issue. Brad have you fixed it . Marc i hope i have. ,he thing about software, you for whatever reason, you go for six or seven quarters and theres always something that happens and you need to fix it and repair it. We have grown, the company dramatically. Was we get in and see there a small execution issue at the end of the second quarter, we can get in and work on repairing that and making the company stronger. Speakingrc benioff with brad stone in San Francisco. Productp, jack dorseys shakeup may be around the corner for twitter. Is it enough for investors . Has passed itsgo fever pitch. We will check in with the game maker, niantic ceo john hanke. Emily big changes on the horizon for twitter. The plan to get rid of the 140 days away. Be the company is set to live stream its first live nfl game between the jets and the bills. It is its first foray into the Sports Broadcasting world. Joining us with more, josh elman. Great to have you on the show. Of the livethink streaming news . How much will this change twitter . Josh people come to twitter and they dont know where to go if they are getting started. If you join a live ellet live nfl game, it is a different experience. Emily bloomberg west will stream on there. I am excited about it. Will it make a difference to twitter cost future. Twitter shouldon be going in . Ish the longterm future everyone getting a personal timeline, but it will be a first step to making twitter relevant to people. Emily we could see a change in the characters in tweets, if you have a folder or a a photo or gif, it will not count against the characters. These changes are incremental, some say twitter needs to do more. Josh look how long that explanation was. Do not usele who twitter will have no idea what i am talking about. The secret is when you get to this timeline and you follow people who are relevant to you. T is hard to set up the people who have it set up like me love the product and use it all the time. They should focus on making it things thatnd the interest you and not worry about the nuances of how many characters. Emily we are coming up on a year since jack dorsey came back as ceo. How would you grade his performance . The first six months, we saw a bunch of changes, people leave, people get hired, ai acquisitions. We have six more months before we see a full year of his work. We are in the middle of it and i dont know where we will end up. Emily if it does not work out, what happens . Will he keep running the company . Do they head down the path towards m a . What do you see . People still visit every month to go get the news, every day. Is biggest worry i have whether it ends up on a long decay cycle like yahoo or they find something that reignites growth or they find a buyer where they can join forces and become stronger. Emily who would be a good buyer . Josh youtube has a great relationship, but they dont have this flow to a set of content. You put them together and it is threeone plus one makes type of concepts. Emily what do you think of the linkedin acquisition selling to microsoft . How will that work out . Josh i think this company is every individual more productive and able to succeed in their own professional lives injuring. Joining with microsoft is going to give linkedin a chance to accelerate that. You will see greater things from them in the next years. Be thewhat is going to hot things teenagers will do next year . Josh one of the hot ones now is musical. Ly. Go opened up the world where teenagers and everyone take out there phones. It is a new kind of behavior we are going to see more of. Emily i will talk with the ceo of niantic later in the show. Where are you placing your bets or looking for the next thing . Josh a couple of areas, socially, things like musical. Ly. Atertainment is billiondollar business worldwide. We have been looking at self driving cars. We think the combinations start to look like the future of augmented reality and different experiences we can have in the world with the technology around us. Emily what is your take on the environment . Saying therele are are not a lot of exciting things to invest in and there is a bit of a l tightening when it comes to handing out the cash. Josh the past few years have seen Companies Get some success. It we will see that settle. Some will settle well and some will not. The Consumer Internet side, we see a lot of people say Consumer Internet is done. Snapchat is getting bigger. I look back 13 years ago when web 2. 0 emerged, everybody feeling like it was done and people had inventive ideas. I think we are about to see people invent what we call mobile 2. 0. Pokemon go might be the first. Emily thank you for stopping by. Josh thank you for having me. Udacity city opens up an application for self driving cars. This is bloomberg. Emily pandora is paving the way for its longawaited streaming service. And or is planning to roll out two new services by the end of is planningpandora to roll out two new services by the end of the year. Batteryn is blaming a manufacturing flaw for the 7. Bal recall of its note samsung says it needs to carry a full analysis on the exact cause. Joins us tontic ceo discuss pokemon go and the epic release. This is bloomberg. Mark lets begin with a check of first word news. Mike pence refused to say whether he thinks white david duke is deplorable, the term Hillary Donald used to describe trump supporters. Following a meeting with house leaders in washington, governor pence said he and donald trump have repeatedly denounced duke, who earlier this year endorsed donald trump. In a show of solidarity, u. S. Warplanes were sent to the Korean Peninsula to send a message to north korea. Flew over south korea accompanied by south korea fighter jet. It comes days after the latest Nuclear Weapons test. Edward snowden wants a u. S. Pardon. He tells the Guardian Newspaper he benefited u. S. Citizens. He faces at least 30 years in an american prison for leaking documents in 2013. He now lives in moscow. Global news 24 hours a day in over powered by journalists and analysts in over 100 countries. I am joined by paul allen with a look at the markets. It is not expected to be a great day on markets around the region. Already off a quarter of 1 . It is expected to show a return to deficit. About 300 million expected. Elsewhere, nikkei futures looking mixed. Hit heavilys got yesterday as oil was rieger. Celebrated thenk 25th anniversary of its listing by slipping below 70 on tuesday. Metals, the deal to produce a blended oil product has stalled. Metal shares are doing well. Paul for bloomberg tv in sydney, australia. Emily this is bloomberg west. Nintendo shares popped after announcing mario is coming to the iphone and pokemon go coming to the apple watch. We have seen shares spike and then plunge. Partnered with the developer of pokemon go, niantic labs. Forught up with john hanke an interview and asked what it was like behind the scenes as the game has taken off to Great Success and controversy. , they are the ones that have borne the brunt of this. There was a case where people were in the office 24 7 for weeks on end. Whole two months of july and august. It was intense. People monitoring things around the clock. Just continually working with our colleagues at google cloud to get more infrastructure in place and as we launched new countries. We had a couple of outages, some hacking, various things that kept us on our toes. Mainly, it was one wave of social after another. , into thed in brazil olympics. That was another wave. People are happy that people are using their products. Calminglad things are down a little and we are able to return to a more sane level of work. Emily there is a report about a slump in usage as well as in app purchases. Our purchases growing . Are they dropping . Have they plateaued . We got past the initial global explosion and we are back to normal in terms of a massive a group of people came in. In the gamem stayed and we are acquiring users at a normal pace and we are back to a normal level of activity and growth. It is a popular game around the world. People continue to spend in the game. It is healthy. To look at other projects in the future, augmented reality more an earlyhaving this as success. It gives us a lot of flexibility Going Forward that we did not anticipate. It holds so much promise. We are excited to be able to invest in that area. Hopefully on the success of other titles we will watch in the future. Emily you collect a lot of data. How do you plan to utilize that data as you think about the next step . We are respectful about our users in terms of what data a user provides about themselves, it is limited. Access toat we have in terms of the user identity. We dont sell that or provided to other people. There is data that is generated as people play the game. It is something we look at as a way to ensure the integrity of the game and to improve the game itself. It is not something we provide to other people. Is a sensitive issue and we are respectful of our users privacy and their data. Emily some privacy advocates are lobbying the ftc and saying why does the game need more information than the users location. What is your answer to that . The data provided through the game is associated with the user playing it. As they are out moving around with the phone, the data that is necessary to know where they are and when they are taking action, we can determine if there is a pokemon nearby, if you have captured it. The data is related to facilitating that gameplay. Apple it is coming to the watch. How much traffic do you expect it to drive . We are excited to be working with apple. We have a strong relationship with google. We came out of google. To be working with apple. They are doing amazing stuff with the phone and the watch. I am excited about the next generation watch. I think they got a lot right with that. Waterproof, brighter screen, faster processing. I cannot wait to get mine. For us, it is a great development. We want you to go outside and play with your kids and friends and not have to look at your phone all the time. The watch is a Great Technology platform for that. You can keep your attention people around you. I am excited about working with that new technology. Emily some suggest pokemon go is making more money for apple than nintendo. Is that accurate . Beyond what the app store and placed or take out as their agreement, i cannot comment on how the revenue gets divvied up. Emily fans are waiting for the ability to trade. They believe you will introduce it soon. Are you going to . If so, when . John what we are introducing today, for android, it is the buddy feature. That lets you pick a favorite pokemon. It becomes your buddy. You can take it out for walks, earned candy for walking with your pokemon. That is the latest feature. I dont have a specific date on that for you. Emily the game has been popular but there have been tragic events associated with gameplay. People have been mugged and assaulted. There was a murder down the street at fishermans wharf. What has been your reaction to these events and what do you think the responsibility is that the game and the company bears . Were trying to create a Game Experience that allows people to have fun outside. Play the game. We are trying to build a game that is as safe as it can be. There is a lot of risk in the world. That are places dangerous to be at. We rely on our players to make their own decisions about where they are comfortable going and being. We would encourage anyone playing the game to be caught the scent of that. There are risks. It is something everyone has to take care about. Big gaminghave communities waiting for this game. , giving plans to launch some of the regulatory issues surrounding google maps . John we are interested in bringing the game to the rest of the world. Some of it is the logistics of us needing to get the Infrastructure Ready to take on additional users. In some situations, there are special laws that make it challenging to launch there. Byare knocking those off one one and taking the steps we need to to offer the people the game. What are you doing to create new levels. Will there be more levels . A sequel . Release a new version of the game every two weeks. We expect the game to continue to grow over the next several years. Not a sequel per se, but an evolving and changing gameplay experience. Emily our exclusive conversation with niantic ceo, john hanke. Alibaba i verify uses either vein to identify users. Uping up, udacity has paired with big names. We will catch up with the udacity founder, Sebastian Thrun. Do not miss our conversation. Ith padma we will focus on the future of the electric car market. This is bloomberg. Emily applications are open for self cities udacitys driving car program. The company is partnering with mercedes, nvidia to build the curriculum. Brad stone caught up with Sebastian Thrun to discuss. Sebastian everybody in the world can become the next car engineer. You apply, applications are open today. We might admit you and you can get a job in silicon valley. What other credentials . Presumably, an english major like myself cannot decide they want to get into engineering and applied. Sebastian for this degree, you programming and math, linear algebra. Entrylevel college math. For 250 people in the pilot and later this year, we will open up much larger. It is selective. The insight is this is a booming industry and that to become larger. All of these Companies Competing need sophisticated engineers and there are not enough. Sebastian they are desperate to get talent. They are looking for great talents. We can take anybody who is somewhat proficient in engineering and turn them into a self driving car aficionado. Is there a corollary effort in universities to beef up the studies in this area . Engineering schools move slower. It takes more time to build up area in silicon valley, we can work with Tech Companies directly. The curriculum is built by those Tech Companies. We can teach what the Companies Want to hire. How do you learn to make a self driving car . Sebastian [indiscernible] you put this together and it is a multidisciplinary, modern engineering curriculum. Mentioned some of the companies, nvidia, mercedesbenz, didi. How difficult was it to bring didi into the mix . Sebastian very easy. We are in the process of developing new competition and self driving cars. Has an interest because it could disrupt their industry. One of the companies not on the list is google. Sebastian there has been restructuring lately. We have a fantastic relationship with google. My colleague wrote a story about the self driving car project. Argument. It google has fallen behind a little bit. Is an orthodoxy in google in making a fully Autonomous System and not making compromises to put a human behind the Steering Wheel in things go wrong and have fallen behind and there was turnover. Thestian one of interesting things, google and are revolutionary in new technology and it will not be a car that you buy that drives you a few miles on the highway. It will be the concept of transportation as a service. You order your car, it picks you up and drops you off and goes away. Is reason this revolutionary, now, we need fewer cars. Fewer parking spaces. Of parkedsco is full cars. Imagine all of these cars could drive themselves to where they are needed. It will be a big game changer. You dont think people will buy cars anymore . Sebastian people love cars. You buy a sports car to go from a to a. For the sake of driving. In a shared economy, it is much superior to an owner in society. Is thisother industries likely to impact . Sebastian lots. Insurance companies. I heard premiums could go down by 70 . Lot. Tian a the number of accidents could go down, the number of, surgeons we need is fewer. Great if Office Buildings could be closer together. When does this future arrive . Sebastian we are at the brink. The technology is there. I am confident we are going to work towards that in the next three to four years and will see a massive change. Profile tesla accident, does it setback progress . Sebastian it remains to be seen. A tesla driver. I love the autopilot feature, but i keep my eyes on the road. I pay full attention because tesla tells me to. Been clear about its statement that you have to keep your eyes on the road. It is not meant to be a self driving car. It is meant to be an autopilot. There was suggestion that google decided when you put an Autonomous System in there, the human brain well shut off. Will shut off. Back in the day, my wife and i would take a self driving car to lake tahoe. She would urge me to have a car take over and she would proclaim that she feels safer with the car driving over me driving. This may be a bad comment on my driving style. When i am fatigued, it is hard to stay in the lane. The car has amazing precision. Emily udacity founder, Sebastian Thrun, speaking with brad stone and San Francisco. George hotz unveiled the first product of his start up. We spoke to him at the Design Conference and asked him about his self driving car kit. It will allow you to drive your requiring a driver to touch the wheel, the break, or the gas pedal. George it is a question of how we ship it to everybody. By the end of the year, for under 1000, you will be able to buy a self driving car. Emily do not miss a conversation with lowes ceo. This is bloomberg. Emily nvidia jumping into the race for the ai market, rolling chips. La p4 these chips are designed to be more efficient at processing images than the last generation and intels server chips. The company has released a chip called the p40 four powerful, individual machines, like supercomputers. Rocketplans to resume launches in november after losing a falcon and i and in a fiery a falcon 9. Spacex is working to determine the cause of the blast. Spacex had previously said it was targeting 18 launches this year and had completed eight before this particular accident. The longawaited tesla is the largest rocket, likely to be pushed to next year. That doesnt for this addition of bloomberg west. Tomorrow, do not miss twitch ceo and padma warrior. From our studios in new york, this is charlie rose. Charlie mr. President , thank you for taking time to talk to us this monday afternoon. Everyone would like to know how is secretary clinton . Mr. Clinton she is doing fine. Even better last night before she went to sleep. She got all these emails and text messages. A friend called and left a message that her husband had been hospitalized with pneumonia. A lot of it is going around. A bunch of her