AOL's Acquisition: In The Loop (08/07)

REPLAY VIDEO
Your next video will start in
Pause
  • Info

  • Comments

  • VIDEO TEXT

Aug. 7 (Bloomberg) -- On today's "In The Loop," Betty Liu takes you from the day's breaking headlines straight through to the opening bell, speaking with the most influential guests and asking the smartest questions. It's not noise, it's news. (Source: Bloomberg)

Aol's acquisition.

Ceo tim armstrong is "in the loop." the fifth element -- the race for space travel on earth.

Billionaire elon musk's hyper loofah -- hyper loop as serious competition.

And football on your phone.

Directv employs the rap styling of the manning brothers to help boost its nfl be viewing in the fall.

? from bloomberg world headquarters in new york, this is "in the loop" with betty liu.

Good morning.

It is wednesday, august 8 here lies.

You are in a low, and i am betty lou.

-- i am betty liu.

Christine elledge in the newsroom still digging into amazon ceo jeff bezos' big media buy, and what the "washington post" purchase made for the newspaper industry.

And white house correspondent julianna goldman in washington with the highlight from president barack obama puppy rare appearance on "jay leno -- obama's rare appearance on the jay leno show last night.

Scarlet, let's are with you.

You have been tracking the media result including time warner.

Let's start there.

Second quarter product -- profit beat sales estimates.

When you take out the earnings per share $.83 topping the consensus of $.76. sales increased 10% because of a higher revenue that the network.

Specifically the cable networks, tnt, cnn, hbo.

Networks ad sales also increased because of the nba basketball playoff and the ncaa that slow play of as well.

Perhaps the one thing that investors are responding to enthusiastically this morning -- 2 -- time warner boosted its four-year profit outlook.

Betty, we are looking at some trading in time warner, and the stock is up modestly right now.

We also have some big media names reporting after the bell yesterday, including disney.

Including disney.

Profit was little changed here, and everyone was looking at the film studio division, even though it is not a big contributor to does a bow the bottom line, profit in that unit felt 36% because of the lone ranger.

It was a dud, it was expensive to make, and as he -- and disney will have to write down the cost of it.

You're looking at pictures of bob eiger, he made some comment on a conference call about the risk of these summer movies, these high-cost movies.

Said that "lone ranger" is an example of that, but he went on to say you have to try it out to make sure it is a big film with a big story, big cats and big marketing.

That is exactly what "lone ranger" was.

Also fox, it was the first earnings report says the company was spun off from news corp.

Sales beat analysts' estimates.

The cable channels, fx, fox news, led the growth there.

What people are looking forward to is the conference call because chase carey, the coo, rupert murdoch will be speaking with investors.

We will get an overview of fox's strategy.

People are looking for commentary on the sports network.

Fox sports one.

Lagardere expects to see that target of 90 million households at the launch on august 17 could be at risk.

A lot of people are also looking ahead to what kind of competition it poses for the espn.

Scarlett, thank you so much, bloomberg "surveillance" ? are little.

-- scarlett who.

? -- scarlet fu.

Tim armstrong, his company performs earnings for the big story for the online giant is it will require adap.tv, the leading global video advertiser program.

I spoke with tim armstrong on his big step into video advertising.

I think if you went back three years ago, most people thought aol was not going to be around, and today the acquisition we are announcing with the adap.tv, the second largest player in video, and more importantly leader in programmatic video, if you have been following the changes in the media landscape, you know that video is probably -- ip- delivered video is a megatrend.

We're going to much more from my interview with a well's tim armstrong and in just a few minutes.

Stay "in the loop" to find out what he thinks about jeff bezos' purcharse of the "washington post ." and could be "new york times" be the next big buyout?

The price he paid for "washington post," but the deal could be nearly double the going market rate for the "know your times." deals reporter christine elledge he joins us now.

How rich was the "post" deal?

Very rich, betty.

Bezos paid 17 times the number.

Huge premium when you look at the average deals for in his favor, you're talking about three or four times that number.

It is quite staggering.

Especially because the prices for newspapers have come down quite a bit since rupert murdoch bought dow jones about six years ago at this point.

Keep in mind that newspapers, although we talk about multiples all the time when it comes to deals, newspapers are quite different assets.

There is a high price to be paid for a brand name like the "washington post" and possibly the "know your times." -- "new york times." what is the possibility for another megadeal for a newspaper?

People have been talking about the sale of the "financial times" for quite a while.

The valuation remains to be seen.

As far as the "new york times" goes, it is a much different scenario than "washington post" is in.

These are two different assets.

Keep in mind that the family that controls the "new york times" has been tearing down assets outside of newspapers and really focusing on the paper.

One very likely outcome according to a few people that i have spoken to that are familiar with the "times" and the family say that one potential outcome years of the family actually take the paper private itself, totally reasonable outcome given the fact that a lot of people say newspapers should not be publicly traded to begin with because they serve a much greater purpose and they should not be subject to public shareholders' scrutiny.

You mean if they are not good business model tackle i do not understand that, cristina.

A radical new dose of monetary policy prescribed by the new governor of the king of england, mark carney, bring down unemployment.

Economics editor mike mckee at the realty -- the real deal on the fed 2.0. a promise to keep rates low for a long time.

Essentially, it is a pledge of what the boe won't do.

It will keep it at .5% until they bring unemployment down to 7%. it is currently seven point eight percent.

That is a threshold, does not mean they will automatically bring it down.

Currency, that will meet low rates until at least the third quarter, up 2000 -- of 2016. it will not increase their qe gil line because 574 billion dollars is out there right now, and they will reinvest the cash as those mature if they need to.

There are three knockouts they say, or caveats to what they are doing.

One -- 18 months from now, it is more likely than not inflation is going to be a percentage point or half a percentage point above their 2%. target.

Second, if the is no longer -- and three, if there is a significant threat to financial stability.

It will enable them to see how much slack there is in the uk economy.

He says productivity there could be 15% below its potential.

So the markets -- so far there are not impressed.

Carney's situation is this is england, not canada where they played cricket and they have inflation.

Right now, uk cpi running at 2.9%. the forecast is a fallback to 2% by the end of 2015. they're not convinced about unemployment.

It is 7.8% right now, and some fear that go up not down.

Uk bond market worrying about credit bubble, particularly in housing.

Carney said that is not going to happen, they can keep things under control.

M, thank you, our economics editor mike mckee.

On a lighter note, in washington, washington was in stitches last night.

President barack obama made it six apparent on the jay leno show, the "tonight" show.

White house correspondent julianna goldman joins us now.

Let overly covered a lot of ground with him?

I'm not going to say i stayed up for it, but for those who did stay up for it, they saw a few laugh lines, but also little asking a lot of serious questions about a lot of serious issues.

If this was the first time that the president weighed in on the latest al qaeda terrorist threats in the embassy closures.

He said the intelligence wasn't specific enough that precautions were necessary.

-- wasn't specific enough.

It is a reminder that for all of the progress that was made with bin laden, putting al qaeda , that this radical, violent extremism is still out there.

We have got to stay on top of it.

Betty, the president said the government was not overreacting in closing nearly two dozen diplomatic outposts and issuing travel warnings.

He said americans should go ahead with their vacations, but he said do it in a prudent way.

What else came up in their conversation?

Leno also asked the president about his relationship with russian president vladimir putin after russia granted temporary asylum to edward stone entered the president said he was disappointed in russia's decision but said he still will go to the g 20 summit in st.

Petersburg.

He did not say whether that separate one-on-one meeting with putin in moscow is still on.

There are still a lot of business we can do with them, but there have been times where they slip back into cold war thinking.

And cold war mentality.

What i consistently say to them and what i say to president putin is that if the past, and we have got to think about the future, and there is no reason why we should not be able to cooperate more effectively.

Betty, the white house says that decision about the moscow summit should come later this week.

Tell us about the funny stuff.

Let's get to some of those lighter moments.

Particularly about 20 15 is regulation the president for the former secretary of state hillary clinton.

You might recall recently she stopped by the white house house for some lunch.

Did you notice new drapes or anything like that?

Keep in mind, she has been her before he or she does not have to measure them.

He also talked about his budding bromance with senator john mccain.

It is the classic comedy, at first you do not like each other, but then you keep bumping into one another.

00, ok, that sounds about right.

Thank you, julianna goldman, our white house correspondent.

Coming up, yahoo!'s makeover.

Ceo marissa mayer is remodeling the brand.

A new logo you might start seeing on your computer.

What plus, watch how elon musk makes a fifth mode of transportation.

We will take a look at the hyperlink competition even before the hyperlink has been unveiled.

And the mannings' rap video for directv goes viral.

It is a must-see.

Stay tuned.

"in the loop" is just getting started on this wednesday.

? ? your phone for calling, your just over an hour ago, aol reported earnings that came in above estimates.

The online giant also just announce it will postulate that it will push -- it will purchase adap.tv.

It marks a big step into video contents.

A wall chairman and ceo tim armstrong joins us now with more on this acquisition.

Tim, great to see you this morning.

This is your biggest acquisition to date as the ceo of a well peered why do this now?

First, great , thank you for having me on.

A very important day for io -- aol.

I think if you went back three years ago, most people thought aol was probably not going to be around.

Today, the acquisition we are announcing with adap.tv makes us the second-largest player in video and more importantly the leader in programmatic video.

If you have been following the changes in the media landscape, you know that video -- ip- delivered video is a mega trends that will affect a $240 billion global tv space.

The second piece is that programmatic advertising really helps software -- just for our viewers who may not know what programmatic advertising is, basically when advertisers buy a stock of inventory, right?

Especially because you have a centric -- a wall street centered viewership, programmatic advertising is the same thing that happened in wall street were people started to trade individual stocks and really develop large quantity, theories around how to trade value on wall street.

The same thing is happening in the advertising business now.

It is a very important trend because essentially media for the last 100 years has been bought in bulk, and now with adap.tv, you can abide in a single year -- a singular effect.

Understanding each individual impression, the targeting of it, the measurement, the analytics, adap.tv is the best company, the fastest-growing company in the video programmatic space, which is projected to be the largest space in the next five to 10 years on the internet.

How are you going to integrate adap.tv into the other aol brands?

We have a portfolio of brands, one of the brands is a well -- aol on that we bought a few years ago and we decided to get heavily into video.

Adap.tv and a well -- aol on will have the second-largest usage for internet.

In may, i think we were tied with google for ad serving around the video.

So we will combine those two businesses from a consumer and advertiser standpoint.

But adap.tv will operate separately on its own.

It is an enterprise system that has been put into the large holding company going into some clients.

So we will essentially, light integration on the ui, but allow adap.tv to continue on their path.

You mentioned competitors that are obviously, dead center is in the place, you have google, facebook, a primary driver for why they buy video, they wanted to instagram.

This is a really competitive field.

One of the questions is whether or not the more video as you have on your site, the more that might turn off viewers or users on these websites.

Do you have those concerns?

One of the things that i love about adap.tv is that adap.tv has focused specifically on both what is good for consumers, what is good for advertisers, and what is good for publishers.

They have a true marketplace shared success.

One of the things that adap.tv integrated into their products a year ago with your ability metric and i think software will actually help the video experiences for consumers get better and better.

Over time because it is a marketplace, the advertisers will actually be incentivized to show better videos to consumers with the right length and quality.

So there is a big opportunity here for software to really improve the user experience, the roi for advertisers and the yield for publishers.

That is a big part of this acquisition.

Tim, let me switch gears for a moment.

Other medianews has happened over the last few days.

Your website, huffington post, techcrunch, and others have put newspapers out of business essentially.

Then you turn around and you've got people like jeff bezos, who you know very well, the founder of amazon.com, who is taking "washington post" and buying that and going to put a digital online.

What do you think of a move like that?

First, you have got to watch moves like that closely because you have two of the smartest people and pets able the planet, i think just bezos, don graham combining to do something, which i think is going to be very positive for the "washington post." the grahams get big credit for having that level of foresight into working with jeff and having a technologist think about the future.

But they were losing money, though, they were losing a lot of money on "washington post." yes, but i think if you look at the "washington post" strategy, you have to separate the newspaper print from the value those journalists bring it from the value don has been able to bring up on the on line side of the business.

I think that is what has attracted jeff.

I don't know that for sure, but that is my guest.

The other thing you cannot as a "washington post -- underestimated as you look at the brand, the "washington post -- if you look at the "washington post" brand, you look at the drive that arianna had to go right into it and create an incredible property that is now in double digits countries and has 100 million video views a month, if you look at the "washington post" brand, the huffington post brand, they are both mega brands for people.

You are not worried, tim?

I think it is a huge benefit.

I said this all along.

Consumers want content brands and consumers want a deep, rich, curated experience.

The huffington post has got speed and lead right now that we're only going to fuel with continued work and investment.

I'm very excited "washington post that has turned into a global property.

"washington post -- i am very excited that a turn into a global property.

I am a large individual shareholder at aol.

I want the huffington post to win.

But i also think there will be other winners, and i will be very happy if don and jeff have a went with the "washington post ." tim armstrong, the aol chairman and ceo.

If you missed any part of this interview, catch it again at noon eastern time on my radio program "in the loop" at the half on bloomberg radio on sirius xm radio 113. also 94.5 fm hd to.

Facebook updates in the sky is closer than anything.

The battle over bringing you wi- fi to cruising altitude.

You're watching "in the loop" on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.

Good morning.

I'm betty lieu.

26 minutes after the hour, bloomberg television is on the market.

We are a little over one hour away from the opening bell.

Futures are declining.

Central bankers are focused globally, including chicago fed president evans thing he would clearly not reload a decision to begin curbing bond purchases next month.

European stocks but their biggest today slump in a month.

In a speech a few hours ago, mark carney said the uk gdp of economic growth still a year away from reaching its peak.

We are on the markets again in 30 minutes.

And from wall street to washington, defense secretary chuck hagel softening the blow from sequestration yet again.

While warning of the pentagon change, chief washington correspondent peter cook has more details.

Peter, this may begood news for the defense department's -- this may be good news for the defense department's 3 billion employees.

Chuck hagel 52020 two days of furloughs, then it got knocked down to 11, and yesterday in a moment -- in a memo, hagel says it is now six furlough days for those employees.

Give us a warning about those pentagon pain to come, and sequencers and is not taken off the table.

He says even with these improvements, this is a military whose readiness will remain seriously degraded as we head to the budgetary uncertainties for fiscal year 2014. bette, he is warning of some very difficult choices ahead.

Again, if sequestration is not taken off the table by the congress and administration.

What kind of changes are is he considering in the future?

He says basically the truth here is -- the choice is between troops and technology.

We can maintain the current structure of troops are now only if we take what he calls a modernization holiday or we can lower the troop levels and invest in that modernization.

Invest in technology.

That means some dramatic troop reduction.

Some of the options on the table he is talking about -- again, these are big numbers, big changes.

380,000 active duty army troops versus the current plans numbers of 490,000. the marine corps could drop to 150,000 from the current level of 100 82,000. the number of carrier strikers robin from the current 11 to down to sus 8. chuck hagel is not recommending these kinds of numbers.

He is not backing them.

He says these are some of the options that the defense party would have to consider if the $50 billion a year in sequester cuts over the next 10 years are not eliminated by congress.

He is trying to light a fire under lawmakers and the white house to cut a deal, and so far that has not happened.

We will see if it happens this fall.

We will.

It is coming on.

Ok, peter, thank you.

Our chief washington correspondent peter cook.

Here is a look at other bloomberg top headlines are also for the first time, bank of england governor mark carney linked his policy outlook to unemployment and explains to expand -- and plans to expand bank stimulus is needed.

Duke energy reporting earnings that fell below estimates as milder weather cap the electricity costs slow.

The company reaffirmed its four- year guidance of lower operations, expenses continued to fuel revenue growth.

And football on your phone.

Directv broaden the big guns for his newest sunday ticket added campaign.

The spot features the manning brothers with the nfl starts rapping in costume.

"saturday night live" style.

For more on this, i am joined by the former president of cbs sports and now the president of -- communications, which specializes in sports, television, and marketing.

Thank you for joining us.

We were just showing a clip of this football on your phone at four the sunday night take it that is a huge part of directv close the business.

To have the manning brothers come in and pitch in on that, how big of a deal is it?

Is a marvelous promotion.

Very well done.

I might say -- pretty expensive.

It took them a while to produce that.

They did a great job.

In new orleans, people are wondering what were the manning brothers doing in new orleans, and now we know that they were doing this.

The sunday ticket, people keep talking about how big of a deal that is for directv.

There is so much going on with this company and whether or not it might merge with competitors.

What does directv need to pull off this season with the sunday ticket?

They're paying $1 billion a year for sunday ticket, and it is the only major sports package in terms of sunday ticket or center ice or league deals.

It is the only one that is exclusive to directv.

So the use it as a differentiator, the use it to build subscriber base.

It is very important to them, and it is also very expensive.

Honestly, i don't think anyone knows at this point whether directv is going to step up to what i am sure would be a significant increase from the $1 billion to keep that package exclusively on their satellite channels.

Would they be crazy to pay more?

No.

it is a business driver.

Sports is a surgery date -- is a strategic asset for satellite and cable.

It drives the entire business.

You can't measure the value of sports just from the period it comes on and goes off the air.

It measures by maintaining and growing your subscriber base and maintaining and growing your subscriber fees.

So it is much more than just programming for directv.

The other part of this that i think is really interesting is the football on your phone, clearly that is being wrapped throughout this whole advertisement.

It has really tried to push more viewers.

You can watch live sports not just on tv anymore, but that is really the way to go on your mobile devices.

Well, it is sports everywhere.

It has become the mantra for a lot of the sports product.

Most of the other leagues are doing exactly the same thing.

And you only access it through your subscription to directv, so this makes the directv subscription even more valuable to its home subscribers.

And it will some point toward an increase in the directv charges for the nfl sunday ticket.

Before late go, i've got to turn to one other issue going on in television, which is this whole fight between cbs, as i mentioned you worked at cbssports, and time warner cable.

This whole fight over retransmission fees and other rights -- and do you expect that that is not going to last beyond the beginning of the football season?

Most of these controversies get settled pretty quickly.

Of course, nfl football in new york is a major driver of the viewers and advertising and subscriptions.

So i would expect yes, it will get settled.

It is one of a long series of confrontations between rights holders and the channels and the carriers, and ultimately these usually get settled.

Sometimes it takes a little longer, but i would expect by the start of the nfl season, cbs will be back on time warner.

Ok, neil, thank you for joining us.

Neil pilsen, the former president of cbs sports, and the president of pilson communications.

Still, "ironman" and elon musk have things in common.

Investors warming up groupon as the daily deal site proves its turnaround.

Tesla motors announcing quarterly results later today.

Founder and ceo elon musk will unveil his idea for a high- speed, long-distance transformation system, which he is calling the hyper loop.

Bloomberg's willem marx speculate that looks at other rapid transit options that are currently out there.

The favored method of long- distance trestle in -- travel involved plummeting through the sea.

Elan musk, the founder of tesla cars and owners of space x, revolutionizes travel, sinking in more than $100 million into this reusable rocket.

His latest rivaldo may be earthbound, but that is not mean it is any less space age.

His bold idea for a fifth mode of presentation called hyper loop has been receiving a lot of hype.

It can do l.a. two-seamers is go to a half-hour commute.

The company developing in an evacuated treasure visions is impaired passengers can travel through five foot diameter tubes that they are calling space travel on earth.

The top speed is 4000 miles an hour.

Without threats from investors, that may remain a pipe dream.

British tech firm reaction engines is launching a cooling system for jet engines powered by liquid hydrogen.

The proposed space planes could carry 300 passengers halfway around the world at mach five.

With no vent does -- windows, the views leave a lot to desire.

By 2019, the s-1, billed as a fuel-efficient version of a fighter jet, maybe one more option for business executives wanting a rapid ride.

The company is still looking for investors.

Elon musk is still looking for all sorts of technological solutions.

But one thing that's the billionaire does not need to worry about is finding.

Pretty cool if it all happens.

Staying on elon musk and tesla motors in the future of electric vehicles, i want to bring in auto expert marion keller.

She currently serves as managing partner.

Always great to have you here on "in the loop" talking about autos.

You have made comments about elon musk and tesla motors in the past.

You say the stock is trading, like a 1999 stock in your view.

It is trading as a technology company where current earnings are not relevant to the price of the stock.

People are looking far into the future to justify the multiple the stop cap.

So as a car company, it is widely overvalued.

Right.

If you look at where people who ply the investment analytical trade today think the stock should sell, you have got a very divergent view, anywhere from $60 to $190 a share.

People are struggling with just where this stock should sell.

Time will tell, and people will see the future better than they do now.

They are expected to report a loss again by the way.

At one point do they become in their view a legitimate car company?

I think that when they are able to demonstrate that they could build a car that the average consumer who buys a new car today can afford, and today the average purchase price for a new vehicle is somewhere around 32,000 dollars.

They are projected to be somewhere in the $35,000 to $45,000 range in about three years or so.

But that would be a significant drop in the price of the battery pack.

That is absolutely, the battery pack is a huge part of this.

Maryann, when you talk about price, elon musk says he will be able to do this, but other car companies are producing cheaper price electric car.

You have got general motors with the chevy volt, and then you have nissan with the lease.

-- leaf.

Both of those company's had to cut the prices on these cars are one of the brilliant strategies that musk did is he produced a 100 $50,000 car, and he produced a very pretty car that has received rave reviews for both its styling and performance.

So he did not ask anyone to compromise.

He produced a car that is justifiably expensive and meets the criteria of someone who buys a performance car.

When you look at what volt and in particular leaf asks a customer to do is spend a lot of money on technology that does not give you very much for it compared to a gasoline-powered car.

I have driven both of them, by the way, and to looking on the interior, i am not -- a chevy volt, and $40,000 committed not look like it was worth it.

Well, now it is $35,000. but you see what i mean.

When people go into the dealership and they look at that car versus comparable gasoline- powered cars and they say i've got limited range, what are the trade-offs?

The brilliance of tesla is that musk did not ask you to make a trade-off.

He asks you to spend a lot of money, but he gave you a package that was comparable to other $100,000 cars.

In the case of a 35,000 dollar car, you could pretty much have everything that the mass-market producers and even some low entry-level luxury cars at that price range.

So there are a lot of compromises the customer is being asked to pay or to observe just to have a electric power.

And that is not enough to make people excited about having a battery that gives you 30 or 40 miles.

An interesting part about this whole strategy for elon musk is he is not going to sell its cars three dealership.

One of the reason he points out if he does not think dealerships are going to want to sell electric cars versus a gas powered one because the markets are not as high.

Can you see that point of view, or is he wrong about that?

I think he makes a fundamental mistake.

He can define his dealerships however he wants, and today most manufacturers expect that their dealers will be exclusive to them, so i am not sure i understand what he is talking about.

He could set up a tesla dealership that sold only tesla cars, neck to be up criteria for his dealership.

So i guess i don't understand how he makes that statement.

He could say you only send an electric car.

All right, we will talk about that morrissey continues this battle.

Maryann keller, the founding partner of maryann keller and associates.

And shares have soared since its ipo, but can musk keep investors happy?

Plus, plane rides are about to get more interesting.

We will tell you how the battle for in-flight wi-fi is going skyhigh.

Stay "in the loop." our bloomberg big number is 380,000. that is how many customers pay- tv providers lost last quarter according to profit research.

This comes at the industry grapples with rising costs and flaring tempers driving hundreds of thousands of americans to cut the cord.

Just yesterday, dish network reported a loss of 78,000 subscribers, up from 10,000 this time last year.

Directv also feeling the pain reporting a similarly slow quarter last week.

Staying online, your "game of thrones" marathon may be a reality on transcontinental flights.

Sweeping changes in airborne wi- fi promising more bandwidth to four passengers then current market leader gogo can offer for an entire airplane.

Bloomberg reporter willem mar x joins us.

We signed onto below and we have some problems with the connection.

If that's going to be better?

They are saying the amount of bandwidth currently going through an entire plane will be channeled to a single person.

Now we talk about the "game of thrones," at the moment, global does not allow you to stream with hbo go or netflix.

Why don't they allow you to?

Because of the bandwidth.

The restriction on how much they can use.

The data is much more slower.

How is wi-fi able to do this?

It is, located.

What viasat has to do is insult and is on the aircraft appeared at the aircraft flies, the antenna follows these satellites 20,000 miles above it, sending the data back and forth, and allows you to use as much for the spectrum.

Ok.

but pricewise for passengers, is a going to be about the same, a little bit more extensive, what are we talking about?

That also is located.

Some airlines charge, some such as norwegian do not.

It is like starwood box.

-- starbucks.

Some charge $26 a day.

The percentage of take crates, the people who use this service, is around 5 presented at the moment.

So bobo is struggling to interest people.

The president and ceo of jetblue was on our program yesterday, and he talked about installing wi-fi.

He says passengers are demanding this.

Listen to what he said.

There are passengers who have been telling us hey, i love the fine you, but not on those long- haul flights because you don't have the further upgraded experience, and you don't have wi-fi.

So we are solving both of those with this announcement.

We're so used to getting wi- fi that we don't want to pay for it when we're are in the air, maybe airlines should offer it for free.

Jetblue is launching a next month.

Quite all right, willem, thank you so much.

Up next, marissa mayer continues her shakeup at yahoo!, but this time she is giving a facelift to the company's 18-year-old logo.

Will it be enough?

Detail straightahead.

Time for this versus that.

Today, we are watching an image crisis play out publicly.

This is yahoo!'s ceo marissa mayer spared she has been in her row for over a year.

She has had an acquisition of nearly 20 companies in a 70% bump up in a stock price.

Now she is a game -- ditching the 18-year-old logo appeared of new logos will be featured every day this august during a marketing campaign that yahoo!

Is calling 30 days of change.

Yahoo!'s chief marketing officer says the logo should be the chief calling card of the company and they hope the local will take yahoo!'s next chapter.

They will review -- reveal the new logo on september 4. i'm sure you are waiting with bated breath.

It is 56 minutes after the hour, which means bloomberg television is on the markets.

Futures down.

Keep an i on hedge funds billionaire john paulson.

All four of his firm's main strategies posted gains of july as the recovery to recoup losses from 2011. while hedge funds in general posted a slight gains for july, they still trailed the global rally in equities.

We are on the markets again in 30 minutes.

Coming up, ge ceo hopped off the solar train, and the move gives one company the energy to take on the competition.

You are watching "in the loop," on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.

30 minutes to the opening bell.

This is in the loop with betty liu.

Welcome back.

You are "in the loop." a well purchasing adap.tv , ceo tim armstrong telling me this but the company ahead of the graham -- the game.

In the governor of the bank of england, mark carney, gave a dose of reality to the global markets this morning.

And tesla and solar city earnings in the hyperlink, billionaire elon musk in focus this morning.

We will have more on the solar truck -- the forward trend in just a moment.

Give reporter -- deals reporter cristina alesci kicks off.

He says the video at could boost earnings by 10% to 15% over the next few years.

I am watching the british pound bear the bank of england promising today to keep reins unchanged for two years.

Markets don't believe it.

A six-week high against the dollar.

Speculation for inflation will prevent the bank of england from keeping its promise.

Bond deals up as well.

Also up -- time warner shares.

The company reporting earnings this morning.

The owner of hbo and tnt among other networks reported profit that beat analysts' estimates because ad sales were up, in particular network advertising sales up 11% for the company.

Thank you.

Yesterday, we noticed a good news for the company.

Consumers paid off a lot of debt, housing prices are rebounding, so that should help them start spending more.

Today, economic editor mike mckee is back with the other side of that story.

Yes, we can spend more, but we are not likely to.

I have not had a chance to use my economics degree.

Let's start with the chart we showed yesterday.

Americans have paid off debts at incredible amounts.

The debt to income ratio, how much you owe compared to how much you make is now down to a 33 year low, which should mean that we can spend a lot.

We talked about that yesterday.

The problem is, we don't really have the income.

We don't have the debt, but we don't have the income either.

Median household income is at levels we have not seen since 1995. we have been working all this time, and you're not getting a raise is what it basically comes down to.

Which is one reason people have been so restrained in their spending.

There is also talk that we are going to see a wealth of facts.

We're waiting for that.

The stock market is way up, and the amount of mortgage interest said that people have to pay is way down.

I'm not sure if this chart will show up, but if it does, you will see that it comes it -- comes way down.

What we're doing now is saving a lot of money we would otherwise spend on housing.

If that is the case, we should also have more money to spend.

If you don't have your income going up, do you feel confident enough to spend even that extra money you get?

That is a great pointer it is there anything that policymakers can do about this?

There is nothing that anybody can do it directly about it.

I suppose you could cut taxes.

If people felt that was permanent, they might spend a little bit more.

But what you really need our policies to increase employment because as the unemployment rate goes down and markets tighten, then it is harder to hire workers.

How do you do that?

You give them raises.

That is what the fed would like to see peer debt is why they're pushing so i to bring down the unemployment rate.

You cannot force companies to give a raise that they do not want to.

M, thank you.

Mike mckee, our economics editor.

? our mover and shaker this hour is general electric's ceo hopping off the solar train due to increased competition.

Ge has all all of its balance applies to first solar appeared in mouth not giving up entirely.

Ge will halt markers to solar panels to companies building large-scale solar farms.

Ge is promoting hybrid power projects using wind turbines and solar powers -- solar panels.

Weak solar panel prices and overcapacity take their toll on the business, and that is solar city because staying in the sun, solar city, which is a solar power provider led by billionaire elon musk, is scheduled to report their earnings after the bell.

For a company that just went public last september, it has been a bets.

Shares have quadrupled in value since the ipo.

For more, senior markets correspondent julie hyman feared julie, the stocks climb this year.

If that's the musk affect you go -- is that the musk affect?

Right now they are trading at over $40 a share.

Part of it is people trying to get a little piece of that muska magic, if you will.

Awful -- also in a bull market, i talked to someone about renewable energy, and he said in a bull market you tend to have a little more speculative stock do even better, outperform the market as it is.

He says the musk affect part of it is parts, tesla of course have also been climbing.

So people trying to ride the coattails of that as elon musk is the chairman of solar city as well of this larger shareholder.

There is also the fact that solar generally has performed very well this year.

There is a guggenheim a solar etf that you can use to track the industry, and that too has done quite well.

So you can see the rebound in the solar stock, and solarcity has benefited from that as well.

Solarcity do not focus on the bottom line when they report.

No, not necessarily.

It will be focusing primarily on megawatts deployed.

That is the number of installations that solarcity does.

The difference between solarcity and first solar, the first solar makes solar panels and have big farm products.

Solarcity is primarily a residential insulation company pretty puts panels on roofs.

It is the only pure play residential company have its kind that is publicly traded.

That is really what the business is, and the company itself is primarily measured, talking about these deployments, how many megawatts have it put on roofs.

For this year, it is forecasting 4400 70 megawatts to be deployed or installed, if you will.

So that if the number the folks are going to be focusing on.

It is also going to be looking at revenue and a deferred revenue.

What are the signings for the company as well as retained value?

So not necessarily an earnings per share story here, but numbers.

Thank you.

We got some breaking news out that president barack obama, according to the associated press, has canceled his meeting with the russian president over the nsa leaker edward snowden.

White house correspondent julianna goldman has more on this breaking news.

Yes, betty, we are trying to confirm this, but still the president will be going to the g 20 summit in st.

Petersburg in september, but he will not be making an additional stop in moscow to meet face-to-face with russian president vladimir putin.

This is because russia won at last weekend granted temporary asylum to edward snowden, the contractor that leaked information about u.s. surveillance operations.

The u.s. had been working with russia, but russia still went ahead with this decision.

Now, the white house had been laying the groundwork for the last week or so, hinting that this meeting in moscow would not be happening, making a point of saying that relationships with russia are strained over syria, iran, missile defense, and so going to moscow, having that meeting would not really leak anything on these major issues.

According to the associated press, the president, the u.s. plans to alert rush of this decision, but the president and putin were not expected to speak directly in order to tell them about this.

The president instead of going to moscow is going to be adding a stop to sweden early in september as part of his travel itinerary.

This manner, the huge surprise, given the strained relations, and even of all places last night on the "tonight show" with jay leno, he continued to criticize the russian president forgiving giving that asylum to submit -- to snowden.

There have been a vast amount of communication between the u.s. and russia, but the president -- it is sort of interesting when you think about what he said back in june when he was traveling in africa, saying that he was not going to let the edward snowden saga really sour relations with russia.

So that is why they are making a point of saying that when it comes to missile defense, syria, iran, that taking that trip, meeting face to face with not going to lead to any breakthroughs.

All right, julianna goldman, our white house correspondent on that breaking news about the meeting canceled between the two presidents.

Still ahead, disney reports third quarter earnings with profit taking a hit from a box office flop "lone ranger." we will have one strategist why he still likes disney.

And groupon gains momentum.

We will look at what is behind that surge.

You are watching "in the loop " live on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.

After the bell yesterday, disney reporting profits for the last quarter beating expectations fueled by strong cable tv ads and themepark attendance.

There were some disappointments though that abc network as well as the flop of the "lone ranger" movie, which cost almost $200 million.

Robert morgan says disney is his favorite consumer stock still, and he joins us now.

Great to have you back with us.

At 19th times earnings, people say givveen some of the jedi the company, is it really worth that?

-- some of the drag of the company, is it really worth it?

No doubt about it.

My thesis has been the strength of the diversification, it is much more diversified, even with this somewhat disappointing result.

But that disintegration came through, and dig in the why i say that, but that is really -- so why do you say that?

The negatives are pretty obvious.

"lone ranger" was a big flop, and abc, and your last hour, you mentioned that the big networks continue to lose viewers, and of course they're having to buy more programming, which is more expensive.

At the same time, you have got yesterday and, a any, the children channels, theme parks, nobody else has theme parks that are competitors.

Even though you have these disappointments you still have a pretty decent quarter.

But rob, you cannot keep going on like this though.

They are offsetting some of those big losses, but let's say for instance bob iger saying yes, we had a huge flop with the "lone ranger," but we're going to still pour millions of dollars into tentpole films like the "lone ranger." does that bother you?

Well, they're going to have some losses, betty.

Let's face it, the heart and soul of disney -- a $200 million loss, rob." -- rob appeared i know.

It is like a drug company that spent hundreds of millions of dollars to bring a drug to free trial and it flops and does not come to market.

It is a similar dynamic.

They're going to have more hits than misses.

That has been their track record.

This is the heart and soul of the company.

As i said before, i think the drivers of the company are some of these other areas.

But the tentpole strategy, they're going to stick with it and i'm ok with that.

What about cutting costs?

You mentioned with the abc television network, they had to acquire more and more program, they're doing less in-house and more acquisition of original content elsewhere.

That is only going to increase because there is so much more competition for original content.

Where should the abc network, the television side, what should he be doing going forward, and it shouldn't be cutting more costs?

Yeah.

As we said before, this is true across all the big networks right now.

Declining viewership, costs going up because of programming acquisition -- you know, aside from i guess getting rid of abc, which i don't see them doing -- you don't expect that could happen.

I would not think so.

I think it is still -- you would not call it -- they're not in a situation where you call abc a loss leader by any means, but i think the fact that they have abc really create some synergy for some of the faster growing areas like espn.

You interchangeably can watch espn and abc shows, for instance.

You just don't sound so convinced though, rob, you say they can keep it around for now is what i am hearing.

Well, yes.

I don't see them selling it anytime soon, but i guess if i am bob iger, i will keep creating these tentpole movies because that is the history of the company and they have a great track record.

Abc, even though it is struggling, they're not going to do anything with that.

They will cut costs where they can, and they will reinvest in these fast-growing areas, espn, a any, children's channels, maybe they can -- maybe there are some that they can buy up there.

And the theme parks, which really is something that not a lot of competitors, if any of them have.

Rob, thank you for joining us.

Rob morgan of fulcrum securities of disney.

The department of justice, we will have more details on the lawsuit.

We're about eight minutes away from the opening bell, and it is time for the countdown blitz.

Julie hyman with us.

Let's start with bank of america.

Yes, the department of justice has accused the bank of misleading investors about the quality of loans tied to $850 million in mortgage-backed securities.

There is some friction about banks back in 2007 and 2008 at they excluded risky loans but left in wholesale debts once warned as toxic race -- waste.

Gnocchi is considering -- gnocchi is considering cutting back jobs to and cruise productivity.

Gnocchi a is in the process of taking over a business that already cut 20,000 jobs over the past couple of years.

Revenue fell 17% last quarter.

That is global markets.

The fourth-largest u.s. stock exchange operator shut its main market from us and our yesterday because of a malfunction in its computer system.

A spokesman for the firm says that that issue was caused by the internal network problem, not a software malfunction.

This is not the first time they had problems.

No, when they cancel the ipo in the spring of 2012 because it had trouble opening its own shares.

At that time, it was a software issue, for that is what made that decision yesterday.

Thank you, julie.

We have a top 10 trade you don't want to miss after this break.

Welcome back.

You are "in the loop." it is 26 minutes after the hour, which means bloomberg television is on the markets.

Latest on futures just before the open.

Here is how futures are trading right now.

You can see they are falling head of the open.

That means the s&p is now set to extend its biggest two-day drop since the month of june.

The s&p, dow down about .3%. the nasdaq down by about .2%. we are also seeing a drop in commodities today as well.

One thing investors will be listening to carefully is comments from the federal bank chief of cleveland.

She will be speaking today as ever, investors will be listening closely for any clues around the central bank thinking about when it will be tapering.

Olivia, thank you.

Let's count down to the open with the top 10. the only trade you need to know about.

Olivia stays with us, and senior markets colors respondents julie hyman -- correspondent julie hyman feared tesla, second- quarter earnings after the bell may have slipped into the red again.

That will reverse tesla's first- ever profit in the last quarter.

Revenue decreased on the company's new style financing program during the stock was up over 300% so far this year, olivia.

Number nine, blackberry reporting that three executive's are leaving the smartphone maker with the company's spokesperson saying blackberry is making sure the right people are in the right roles.

This comes two weeks after blackberry laid off 250 workers at a product testing facility in ontario.

Number eight is groupon, the daily deal website gaining momentum ahead of its earnings reports this afternoon.

The shares are up a little bit this morning.

79% this year, trading close to nine dollars a share.

No were near ipo price of $20, we should mention.

Nowhere near that, yet.

Time warner, kitty, cnn reporting second-quarter profit that beat analysts' estimates.

This is boosted by higher revenues.

Time warner also increase full- year forecast.

Number six, facebook -- up almost 1%, morgan stanley raising the price of the stock to $45. the company believes facebook's new video ads have the potential to boost revenue by 10% to 50% over the next two years.

Number five is first solar with shares tumbling.

It cut its 2013 profit and the second quarter fell as sales took a hit appeared at the same time, first solar bought's solo technology portfolio.

A 1.77% stake in ge worth about $82 million.

Ok, guys, at number four is disney.

The world's largest entertainment company called to market, the summer box office bomb, shares are down in the premarket after revenue came in below analyst estimates.

Number three, zillow shares plummeting in the free market.

Advertising in the second- quarter profits, zillow spinning up in the game.

Number two, gnocchi estimates, as sales wane, the phone equipment maker is considering cutting 8500 jobs after 70% of its workforce, you canthe shares trade in the u.s. nok, in the process of taking over entirely the phone equipment unit, which has arctic cut more than 20,000 jobs over the past couple of years.

No.

1, aol.

Cumming and above analysts' estimates.

The chairman and ceo, tom armstrong telling me the acquisition puts them ahead of the video advertising game.

Time will tell.

Jordan has from chicago brian battle, a director of performance trust capital partners.

You say was a big deal yesterday.

Charlie evans said it may be tapering is back on the table.

Is this why equities are down?

Absolutely.

Markets are driven by a liquidity.

Charlie evans is a dove.

Yesterday he came out and said maybe if the date is ok we should start tapering in september.

That is big news.

I think the rotation, everyone will start paying attention to the bond market.

We will see how that goes.

Fed liquidity is starting to come off.

This will be a sea change in the market.

And outside of the speech, what else are you watching?

We're going to watch the 10- year.

What volumes.

10-year option right around noon.

Summer trading, up and down 0.50 or 100. that is more global centric.

A lot to watch in the interest rate market.

That will influence stock trading today.

Thank you, brian battle.

I want to bring in richard weiss, senior portfolio manager at american sentry investment management.

His call, the economic recovery and rally in stocks are established enough you can safely rotate back into small and mid cap stocks.

Perhaps that is a sign you are a little bit more bullish on the market?

Possibly.

We have been positioned that way for some time now we are looking for the next leg of this recovery.

We have seen financial size -- stocks do well.

Early cycles in the consumer s sector and definitely bullish at the market.

Also more bullish on commodity stocks.

It has been a very tough year for commodities.

The big reason is china will not actually meet the growth target this year of 7.5%. the dow jones and u.b.s. commodities index down nearly 11 percent on the year to date.

Many oil producers, including chevron last week, is seeing profits shrink as production falls.

Some analysts say it is hard to see where we will get the pickup in commodities.

When will we get the pick up?

Again, if you believe in the recovery as we do, the fact is the growth is coming from the developed market.

The focus and a main affect on commodity has been coming from the celebration in emerging markets, primarily china.

If you look at the u.s. and europe, they dwarf the demand for commodities relative to one nation china.

We are optimistic in that regard.

It may be a little bit early.

Starting to prepossession for that as well.

Looking overseas for a moment.

You have been watching european shares.

The turn of conventional wisdom on europe has been it has been showing a vast improvement.

. en really pointing to italy as a source of potential issues for the eurozone.

He says there's plenty to worry about in italy and plenty for the euro area.

He says growth there was lower than it should have been and economists after a economist has tried to pinpoint exactly why and has failed to really figure out what the issue is there.

He says it still remains an issue.

There is no question there's concerns overseas.

If you look a recent earnings, they are taking a page about our book.

So i think they're following the u.s. lead.

We would look to europe as the next logical beneficiary of what is likely to be a global recovery, starting in the u.s. thank you for joining us on this, richard weiss.

All eyes are on daily deals sites, groupon.

They will report after the bell.

Sobering news from australian wine makers.

White cheaper currency and oversupply of currency means more $10 line for all of us.

A few minutes into this session.

Stay "in the loop." captioned by the national captioning institute --www.ncicap.org-- ? seeing talking about technology, the drug maker amgen has boosted the offer to buy onyx.

Joining us now is cristina alesci.

They are willing to hard -- their plan hard to get.

The stock is still trading higher.

It may not be enough to get the deal done.

What is really attractive to suitors is the fact that as a blood cancer medication.

Analysts are predicting sales could surge about ninefold to about $2.4 billion by 2019. more broadly speaking what is driving this deal is what is driving all specialty pharmaceutical deals.

Specialty pharmaceutical for the most part allows these companies to have concentration on one or two drugs come in many to go beyond that.

It is seeking new products as the anemia drugs have declined over time.

So that is what is going on, that is as -- what is driving the premium.

What is going on with the largest drug makers?

That is a very similar story.

We are in our second year of what they call the patent cliffs.

That is when all the patents for these major blockbuster drugs are expiring.

A lot of companies are losing expressivity.

Then they look down the line and see more health care reform, potentially putting pressure on the ability to really priced drugs like they have been historically.

What is interesting about this next wave is it will be really focused on specialty- focus drugs.

It will not be the big transformational deals we have seen over the history.

Those deals obviously, investors not react well to them.

Take a not at all.

Thank you for that.

Groupon gaining momentum ahead of the earnings report.

Shares surging 79%, but still well below the ipo price.

Coming off of a pretty low base.

Jon erlichman joining us now from l.a. with a preview of what to expect.

Showing some strength.

What happened here?

This is stock market strength.

After the last quarterly report, people said hold on, they have something going here.

This is a company that went public in a very high-profile i.p.o.. there were a lot of concerns about the business model.

At a loss of momentum.

Obviously we saw the ceo kicked to the curb.

Last quarter they saw better than e

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change