Live from pier 3 in san francisco, welcome to the late edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world.
I am emily chang.
Our focus is on innovation, technology and the future of business.
Amazon wants you to buy its merchandise and is launching a new program that will it in front of you and even more places.
Could twitter soon be giving amazon a run for its money?
The company has hired a new head of commerce and wants to eventually let users shop with tweets.
The new york times website is down again for the second time in as many weeks.
This time, the paper says hackers are likely to blame.
We have major e-commerce news on two tech companies.
Amazon is introducing a new feature that will let people shop for goods from mobile apps.
Developers will be able to create all sorts of apps that solve related products listed on amazon's. developers would get a commission.
Twitter is getting into the e- commerce game as it looks for more ways to generate revenue ahead of a possible ipo.
Bloomberg west broke the news that twitter has hired nathan hubbard as its first head of commerce.
Jon erlichman broke this story and joins me now from los angeles.
What more can you tell us?
It is a potential extension of where twitter's brand could be going.
If you think about all of the energy they have spent, it has been largely tied on getting marketers understand what twitter is.
At the end of the day, a lot of marketers are trying to sell stuff.
Why not introduce the idea of commerce on twitter?
The opportunity for retailers to go down that road.
What we have to emphasize here is when you talk about commerce and what makes it happen, there are things like payments, twitter is not getting into payments.
They are opening up their platform.
So you can sell through twitter.
Who is nathan hubbard?
What makes him right for this position?
It is an interesting choice.
He is an la-based executive that will be spending more time in san francisco and reporting to the head of global revenue for twitter.
If you think of businesses trying to figure out, ok, we have tickets for a concert.
How will we sell them?
He has already thought about these kinds of questions.
He said, we are going to go to people who have stuff to sell and help them use twitter to sell it more effectively.
We will see where things go.
Why does twitter want to move into commerce?
Why does this make sense?
There is this logical extension of people looking at their twitter feed.
Twitter has twitter cards, where it expands the tweet from 140 characters to show video or photos.
If you are already doing that, you are looking at a photo and it is something you might consider biting and you are able to give retailers the opportunity to make that happen , think of the potential business opportunities that creates for retailers and for twitter.
Everybody is wondering if this company is going to go public.
There will be a lot of pressure on the company to show its revenue growth.
Jon erlichman, thank you.
I want to get back to that news from amazon that developers can build apps you must sell products through amazon.com.
Eric is the cofounder and ceo of days of wonder, a company that develops and publishes games.
Eric is with me now in the studio.
You guys have already put this into action.
What is really neat, it lets you with a single tap, you can get that digital version running on your kindle fire.
You can get physical maps printed.
Coming them -- from the perspective of a developer, how significant of a development is this out of amazon?
When we did that, we saw the sails of the physical boardgames increased 30%. with amazon, we tighten the loop between the digital and the physical versions.
We think it increases sales significantly.
It is easier for the customer who likes the video games to buy the physical equipment.
You guys have a particular situation.
How significant will this be for other kinds of businesses?
Rovio does quite a bit of business with merchandising.
Now people will get a chance to -- without having to go -- how easy has amazon been to work with?
We worked with them ahead of the actual launch.
They purchased about a year ago.
We do not care about doing an android version of the app.
It is too complex.
There is one thing that will make a difference.
If you can help us tighten the loop between the physical goods and the digital versions.
Jeff bezos was in los angeles and he made a presentation.
What is the revenue sharing that goes on with this?
We get revenue from selling the digital version of the kindle fire and we get revenue from selling the physical boardgames.
Amazon gets revenue from selling the physical boardgames.
What is next?
Additional integration to make the process even more transparent for the customers.
Quick turnaround from you guys.
Thank you for joining us.
The new york times website goes down for the second time in as many weeks and the paper says hackers are likely to blame.
That is next on "bloomberg west ." you can also watch a streaming on your phone, tablet, and bloomberg.com.
? this is "bloomberg west." i am emily chang.
The new york times website has been down for the past few hours.
This is the second time in two weeks the newspaper site has gone down, but this time they say hackers are probably to blame.
A company spokesperson -- spokeswoman says the initial assessment shows it is the result of a malicious external attack.
I want to bring in chris webber from seattle, washington.
He is a managing partner of a cyber security firm that helps companies.
The first time this happened a couple of weeks ago, they said it was due to server problems.
This time they say it was due to a nextel attack.
-- and external attack.
It sounds like it was an attack on the domain name system , where somebody was able to hijack the new york times.com registration and haven't reroute traffic -- have it reroute traffic to a malicious site.
If somebody could convince the post office to route all mail that is supposed to go to your house somewhere else.
They could intercept that mail and choose to read it and send it back to you or not send it to you.
It does not seem like anyone has taken responsibility for this yet, but initial signs are pointing to the syrian electronic army.
This is a politically motivated group.
They will make a statement.
Several of their attacks have targeted the media.
As far as who they are or what they do, we are not certain.
We do not have identities of individuals.
All we have are these communications they provide through the media through outlets like twitter.
Went something like this happened, what is involved in getting the site back online and how long does that take?
With this particular attack where they were able to hijack the dns registration, it it is a little troubling because it means all traffic would be routed somewhere else and not to where it was intended to be routed.
The new york times would respond by starting an investigation internally and contacting the dns registrar to correct the issue.
The registrar has identification , so they are able to trust that this is the new york times communicating with them and correct the record that was maliciously altered.
It has been about three hours.
It seems like sort of a long time.
Why is it taking so long?
It is a great question.
The way the domain name system works is you have the root servers and you have primary name servers and they propagate out across the internet to other dns servers the information they have.
When you make a change to the dns, it slowly propagates across the internet.
Apparently, somebody, maybe this.
-- maybe the syrian electronic army made the change.
That is going to dig a little bit of time to propagate across the internet.
I want to talk to you about another story we have been looking at, a piece of malware that is spreading via facebook and video links.
We heard earlier that this was -- this was spreading at about 40,000 attacks per hour.
What can you tell us about this particular piece of malware?
That is a pretty interesting piece of malware.
A lot of malware attacks are targeting the end users, that is you and, through our web browsers.
Act in the early days, a lot of these viruses propagated through e-mail because e-mail was the major delivery mechanism.
These days, social network sites are.
What happened in the past, i would send you a piece of malware through your e-mail.
You would open that.
It is just another name for malicious software.
My malware would go through your address book and attempt to e- mail everybody else in your address book and infect them as well.
That is similar to what happened with this malware, except it was a browser login.
People were tricked into installing a browser login -- plug in.
It has full access, more or less, to everything happening inside your web browser.
Facebook has said, we have developed a number of automated systems to identify harmful links and stop them from spreading.
We started blocking people from clicking through them.
We have since to remove them from the site.
What more can facebook do to prevent things like this from happening?
Funny story, when i heard about this malware, i went to post about it on my facebook page.
Because i posted the malicious url, they detected part of it, they locked my account and required me to install their security browser to correct the problem.
As far as what more facebook can do, i think they are doing quite a lot.
They have a lot of intelligence in their platform to detect attacks that are unknown and to react to attacks once they are known.
This is an example of an attack they are now reacting to buy blocking.
All right, chris webber er, thank you for breaking it down for us.
Disney, the weather channel, and music videos are all now available on apple tv.
Why apple is the new lace for music television.
You can also watch a streaming on your phone, tablet, and bloomberg.com.
? welcome back.
I am emily chang.
This is "bloomberg west." from smart watches to smart glasses, wearable technology seems to be appearing everywhere.
To meet the demand, device makers need an update of new chips that make it all run.
Cory johnson is outside on peer three with more.
Lacks innovative shall -- innovative chips, that is what they're all -- abroad, is all about.
I will try to meld -- i want to talk about this wearable stuff and the future market.
You guys reported a quarter that was not what you expected.
The stock tanked afterwards.
What is your take away from what happen last quarter?
Last quarter was about the midpoint of guidance.
We are seeing growth in a number of our group seasonably.
We are seeing our businesses continue to grow.
You had to write down a lot of the acquisition.
He did not turn out as expected.
-- it did not turn out as expected.
What has changed?
Your expectations have changed.
You look at a 10 year lifetime average and the whole industry for two medications went down.
When you roll that -- industry for communications went down.
It is lower than we forecast over a 10-year period.
What has turned out different in the world that you predicted incorrectly?
The worldwide demand for data center products is lower.
This is the challenge.
In that particular quarter, it has picked up.
But in the course of a year, you reset the base year.
That is what the accounting charge represented.
I hate product stories and announcements.
But sometimes they mean something.
I saw the samsung galaxy and it shipped with a wi-fi chip that was not yours.
I wondered if that meant something.
With competitors making ships with important players like samsung, what difference that makes.
Brought calm makes the best chips in the world.
-- brought calm -- broadcom makes the best chips in the world.
We do not expect to win every single model.
Sometimes our customers rotate different suppliers.
I do not see that as a trend.
What did not get reported with all of the new models we got into.
A number of customers that were with qualcomm before and are now with broadcom.
How am i to tell which ones matter and which ones didn't -- don't? we have pretty good visibility going forward.
I want to talk about wearables.
I have more and more of this junk on me.
I have my heart rate monitor.
I like this one.
Are you staying healthy?
You're in the daylight hours, i am quite healthy.
During the evening, not so much.
We know apple is working on some sort of smart watch.
I wonder what you forecast for that market.
We see a huge development in the emerging market called wearables.
If you look at smartphones, people tend to have the same kind of smartphones.
A couple of makers make that smartphones on the planet.
We are seeing things for particular types of fitness or marathon runners, fitness for your dog.
I have invested $99. i hope i get a good product.
The opportunity is the small businesses can start up now and create relevant -- wearables at a relatively low cost.
It will access arise the smart phone market.
Think of more like jewelry or watches.
Lots of different kinds for different tastes and different fashions.
I will define meaningful as more than one percent.
Most of the analysts are forecasting about a factor of 10. scott macgregor, thank you very much.
More of "bloomberg west" in just a moment.
? "bloomberg west you are watching -- you are watching "bloomberg west." the federal judge says she will limit against apple.
She said she wants an injunction to "tread lightly on apple's business.
She will monitor and evaluate the antitrust trading.
Michael dell is in china to promote his company as he awaits the shareholder vote on his buyout plan.
He is on his third to china this year.
The company is doing well selling servers and other networking equipment to chinese companies.
China is dell's second- largest company -- source of revenue after the united states.
Baidu is talking to -- talking about developing a chip for use in smart tvs.
They've been trying to diversify.
Firefighters in california are battling one of the biggest wildfires in the state's history.
It has grown to about 109,000 acres since it started 10 days ago.
It is only 20% contained.
It is close enough to a major reservoir to threaten san francisco's water and power supply.
Bonnie snyder is here with an update.
Give us an update on the conditions around the fire.
The latest weather is that today was a better day for firefighters.
They are dealing with really rocky terrain and hard to get to areas.
A lot of the firefight is happening from overhead.
Temperatures to drop down to the low 60's this morning.
We still run the risk of thunderstorms.
Monday's weather conditions were horrible, very windy.
The problem is already looking at the history on the record, this is the seventh largest fire in the california state history.
It is only 20% contained.
We still have a ways to go to get it under control.
The proximity to the water reservoir and the powerplant plant is a huge concern.
They were only 15 miles from the fire.
One remains to that is 30 miles from the fire.
The fire is burning within half a mile of this reservoir and the concern is about ash contaminated the water.
You know a bit about the technology behind the reservoir.
Walk us through that technology.
It is really fascinating because the technology that is keeping the ash from contending the water was a project that was $4.6 billion 10 years ago to improve the pipes that bring the water to san francisco.
Why did they do this project?
It was just in case an earthquake cut off the water supply.
It was not originally designed of a wild -- for a wildfire.
It is helping to bring even more water out of the reservoir to the local area is faster.
We are getting even more water than normal because of the situation.
The idea is to keep the water clear of ash.
The water quality is still good and a lot of it is based on this improved network of piping and reinforcement of the water pipes to bring the water or snow melt down from the water.
It is a great technology that is helping the wildfire situation, even though it was designed to help in the case of an earthquake.
What's interesting stuff.
-- interesting stuff.
Thank you for bringing us up to date.
Many microsoft investors are celebrating the news of the ceos departure, they should not pop the champagne just yet.
Cory johnson is back with more on the structure of this new microsoft.
Interesting that sweeping changes would be made right before his departure.
I was at a company announcing layoffs.
One of the employees says, how do you expect us to do any work if we know there are layoffs coming soon?
If she was not on the top of the list before, she is now.
Wall street reacted , the stock took a big bump -- the stock also took a big bump when they announced he was leaving.
The stock goes up because everyone thinks it will be different.
The people at microsoft have to get up and do something.
It is the zombie reorg.
The guy leading it may be part of the walking dead.
I need to keep people believing that this will happen when the new manager who comes in to run the business may be called on to do some very different things.
I am wondering what the reaction was from the market when they announced the real org in the first place.
The stock got a significant bump.
They want new leadership.
There is your bump.
It was announced that -- specifically, i want to have more focus on hardware, more focus on the cloud, and less focus on pcs.
The idea that he has put forward, those will be the focus for microsoft going forward regardless of who is in charge.
To the business results show a sign of the slow down?
In spite of the success they have had in the cloud business, you have seen gross margins change dramatically.
They are making hardware.
You have to make a new widget every time you sell something.
That translates into less of an operating margin.
Operating margins have also come down for microsoft.
That will happen when they move into the hardware business.
What is the business side going to be?
What are the results of the company going to be?
There has to be a lot of confusion, especially going into bonus stock season.
That is what makes the decision for a lot of people as to whether they should stay or not.
It is one of the reasons that e- mail went out today.
Tori johnson, thank you.
Chris carter created the x- files . the next show may be an amazon original.
? i am the key figure in an ongoing government charade.
That was a clip from the x- files, a series that started in 1993. chris carter a be teaming up with amazon to bring us a new original series.
Jon erlichman is back with more in today's hollywood.
What can you tell us?
Facts all amazon is not talking about -- while amazon is not talking about this right now, this would continue a trend we are seeing.
Already in the case of amazon, we have seen some well-known characters that have been able to get the green light on some of their projects.
I think the name of the game for amazon right now is twofold.
They want more people to be watching video through their instant video service.
You buy existing content.
Another way is to give some of the original shows ago and you see what happens.
What does this mean for netflix?
It is hard to say if it means anything more than netflix and amazon sometimes could be in a position where they're going after similar shows or being shopped similar scripts, the same way any network television layers -- layers are being paid against each other.
The biggest difference, netflix is a stand-alone subscriber business.
You know how many subscribers it has.
In the case of amazon, this is based on getting more people to shop with amazon and having video as an added feature they might like.
Knowing exactly what the numbers are behind the story of amazon's video business is a really tough thing to explain.
Hulu , a rival to both amazon and netflix, is wrapping up its own -- ramping up its own original content offerings.
What can you tell us about that?
They're working together on a comedy series.
Hulu is going to be spending a lot for their original shows , especially since the owners of hulu decided not to sell it.
There are traditional tv producers that are seeing a big opportunity tied to these new media players.
Jon erlichman, thank you.
We turn now to our partnership with george washington university lannett forward -- planet forward.
There is a bright future in burgeoning big data with big energy savings.
Meet entrepreneurs, maybe even visionaries, cofounder and ceo of the company.
It is all about lighting and technology and a dramatic shift that could be similar to the revolution in tv.
If a person wants flat panel displays and every television you get today has a microprocessor built into it and you get an array of applications that you can enable right out- of-the-box.
The same type of evolution is going to occur.
Their idea, led lighting that last longer than incandescent bulbs.
Make this a network of smart lights.
Collecting and sending data about temperature, precipitation, carbon dioxide levels, and seismic act to be.
-- seismic activity.
They can use it, they're only limits is there -- their creativity.
The cost of up grading all of those old life is a challenge, -- upgrading all of those old life is a challenge.
They're working to complete demonstration trials.
Next up, working with developers to create apps.
We are seeing customers interested in parking applications, monitoring assets, and improving security.
Those are the initial applications.
Beyond that, it is about a connected world.
But lighting the way, gathering data from lights, fueling the bottom light -- the bottom line.
A bright idea that might move the planet forward.
Frank is with us now.
How far away are we from seeing a network like this?
Pretty far away because you have to get the lights and you have to get the network in place.
We are only just beginning to cut through the cost barrier.
The cost may be prohibitive because it is four times the upfront cost of replacing bulbs.
Take los angeles, in the process of replacing streetlights, when they do that, when they are done, they will save 2.5 million dollars in maintenance alone every year.
It is not atypical for some communities to be spending 30% of their overall electricity in streetlights.
You can see what a big boon this could be to the bottom line of municipalities.
These are lights that could last literally decades.
Pretty exciting stuff.
Thank you so much.
If you have an idea you would like to submit, visit planet forward.org.
Apple tv wants to be the new place for music television.
We will speak with the ceo when "bloomberg west" returns.
? welcome back.
I am emily chang.
A key case about streaming online is being heard in a federal appeals court in pasadena, california today.
They are appealing a lower court decision.
It is very similar to aereo.
If fox prevails, it would create a split decision between the federal appeals court in california and new york.
Apple tv is bulking up on channels.
Apple announced its device has added new programming from disney, the weather channel, and vevo.
Jon erlichman is back with more.
Vevo has been very actively bringing its contents to new platforms.
The service has more than 75,000 music videos and live concert events.
I am joined from new york by the president and ceo of vevo.
Welcome back to "bloomberg west ." we have seen apple tv doing so many of these deals lately.
Walk us through the process.
Thank you for having me.
Our mission is to bring our programming to everybody on the planet.
Apple tv was a natural fit on the place we have always wanted to bring vevo.
All of our videos, live channels, original shows, live concerts.
We have been waiting and ready and we are able to bring it to market.
It has been a long time in the works.
Over that stretch, you have been signing other deals.
You have shared a number before, but remind people.
How much of this video viewing is taking place away from the pc?
In north america now, over 50% of our videos streaming is happening away from the traditional pc.
That is driven by mobile, tablets, and television.
We are seeing that vevo on xbox, and now one apple tv, in addition to iphone and android, is really exploding.
The fastest growing part of our business and now comprises over 50% of our streaming each month in the u.s. that is over 500 million streams.
Speaking of exploding, when something gets hot in music, it gets hot.
If you were to look at what is trending, it is no surprise that material tied to miley cyrus and robin thicke.
Explain how that turns into revenue.
The business behind it.
Music is a pipeline to the soul, an emotional response.
We built a platform that builds an audience of hundreds of aliens of people around the planet.
When you are connecting with that that hundreds of millions of people around the planet.
Rams are looking to reach that audience.
-- brands are looking to reach that audience.
Everybody on the planet loves music.
We are the best place to reach them in a highly atomized and distributed world.
If you want to reach them on youtube, the iphone, or on any of these new television platforms, vevo is the place you can do that.
You got the apple tv deal done.
Will there be more deals to do?
The company is very focused on international growth.
We are on apple tv today in over 12 countries.
We are working to bring vevo to every screen in every country that our viewers are asking for.
Right now, that is mobile, tablets, and television.
I will look to see vevo with our linear channels coming to a tv near you, on every box, on every service, through every network you have in your home.
Rio, thank you, as always.
Do not go anywhere.
It is time for the bwest byte.
23. the number of ads and services siri works on.
It is the heart of their apple operating system.
Siri has a funny reaction to google glass.
If you try to talk to her like you are talking to google glass -- ok, glass.
Glass , i think you have the wrong assistant.
That is really clever.
I want to try that.
Just so you know, i do not do anything when you blink at me.
? . .
This text has been automatically generated. It may not be 100% accurate.