Apple-Samsung Verdict: Bloomberg West (11/21)

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Nov. 21 (Bloomberg) -- Full episode of "Bloomberg West." Guests: Elevation Partners Co-Founder Roger McNamee; Reverb Product Marketing Lead Katie Cushmore; UTA Head of Social Media Eric Kuhn; Yusuf Mehdi, chief marketing and strategic officer at Xbox and Salesforce Marketing Cloud CMO Michael Lazerow. (Source: Bloomberg)

? live from pier 3, welcome to the late edition of "bloomberg west." recover the media companies changing our world.

My name is cory johnson.

Our focus -- technology of the future of business.

Let's get straight to the rundown.

A $1 billion do over.

The fine samsung was ordered to pay apple had been cut nearly in half but not so anymore.

We have the details.

Facebook revamping its tools for advertisers enough to make it easier to buy our there and manage ad campaigns.

He could make it easier for facebook to make more money.

The clash of consoles.

The xbox goes on sale at midnight taking on the new playstation 4. is $100 cheaper enough to stave off the gladiators?

First, apple coming out on top the latest chapter of this long- running patent war.

They awarded apple more than 290 million dollars in damages.

This is a retrial over a portion of the damages they had awarded one year ago.

$410 million was thrown out.

When you look at it all put together after the verdict today, the jurors figured out what the problems were, how to recalculate the numbers and a total tally going to apple now is $929 million, a huge verdict.

The statement they have to "bloomberg west." they are disappointed and will move forward with an appeal.

What will this have an impact?

A patent attorney joins us now via skype.

It's a little complicated but i guess they say that the infringement happened in the calculation was wrong over part of it so they recalculated the other part.

It is still over $900 million to apple.

That has to be a big deal.

It certainly is.

$930 million and it ranks as one of the top five patent infringement jury findings of all time.

This retrial, indeed, was all about damages.

The liability itself was set aside and was assumed.

A previous jury had already determined that the patents were valid and infringed upon.

This was about 13 of the original 28 products that were accused on a retrial here with respect to the damages calculation.

There was a lot to it with respect to the math involved in arriving at which product infringed which palit -- at once at stake but the first one was deemed the trial of the century and i think it's fair to say that this is the retrial of the century.

It certainly is.

This makes being a journalist more fun.

Look at these damages.

Looking at the amount, is the decision important from a legal and?

Canna change the way that things have been in the future particularly for samsung?

This was about damages and not liability.

You could point out that this is just dollars and cents.

I think it frames the rules of engagement going forward that some of these smartphone battles.

Here you have two separate juries deciding these issues and pretty much they arrived at a very similar finding as to the amount of lost profits, the royalty rates to be assigned.

If we are looking forward, a lot of this will play out an appeal.

That is what a lot of the jockeying was for that very reason.

Let's talk about that.

Now that we see so clearly what the issues are, does the likelihood of a successful appeal from samsung standout?

Or this lessens the chances?

I've been giving this considerable thought.

If you go up the first time on appeal, perhaps it was a rogue jury that clearly got it wrong and it was a miscarriage of jury -- justice.

Now you have two juries pretty much arriving at the same thing and it makes that argument much more difficult to make.

It should be said that based shaved off -- they shaved off from the original jury findings.

It was a calculated decision.

Should we hedge our bets or go for the full gusto and try to eliminate the entire war?

It will be much more difficult and appeals to convince the federal circuit to overturn the jury's findings.

And the appeals mean more stories on "bloomberg west." i want to bring in roger, an early facebook investor.

1000 things i could ask you about and i will try to do it over the course of this next half hour but i want to start with this samsung-apple verdict.

What's your take?

For you and me, that would change everything but for apple and samsung, these are coins between the cushions on the couch.

This is roughly one-week sales in this category to either one of these guys.

Whenever i hear someone say it's not about the money, it is.

Bennett does not matter and you don't need to cover it anymore because this is not enough to move the deal for a either one.

If samsung continues to litigate, the litigation goes on longer than the value of the patents.

You know what i mean?

We went through this with microsoft a lot of other people.

When you have a negation, it slows everybody down.

It changes behavior that shrinks the pie for everybody.

This is not a good thing for either company in the sense that it distracts run the thing they really need to do, make great product.

If i were apple, i would look at this and say they have become my biggest competitor by stealing my stuff and they ramped a business on the foundation of the products that they sold.

They cannot go after them for the trot out they had on the market today but a product they had in the market yesterday.

My quarter view is if apple had a different strategy, samsung would be a very small company today.

-- my view is if apple had a different strategy.

This is consciously allowing this enormous tail and samsung is willing to accept much lower margin than they have gone into destroy all of the android competition.

You are right, but from apple's point of view, better it all be concentrated with one guy, samsung, who will look to protect its turf them the old days when you had 100 different android guys who could have developed something important down to one.

You followed this so closely.

You are a big investor in palm the time.

I understand why, historically, apple having survived a near- death experience wants to take the highest margin part of the smartphone but is that a defensible strategy?

It's a perfectly reasonable strategy.

If you look at it, they get something like 80% of the profits that come from absent aftermarket stuff and they get more than half the profit in the whole category, even hardware.

They have half the profit with 130 the business?

That's a totally reasonable strategy.

Without destroying their brand come a they could move down market and grab a bigger slice of the total pie.

They've chosen not to do it.

I don't understand it, but they are entitled.

You are down to something like a duopoly.

The real danger is there is not much innovation.

The app model did not turn out to be profitable for anybody other than game makers.

Or have been far too few apps coming in the market and we will show you in the third block the first really great new business apps to come along on the ipad in a couple of years.

This is why i come here.

I really want to deliver the goods.

I want to make you proud.

I appreciated.

You say money has not been made in the app business.

There are a lot of little ones making some money.

Some.

It's not been enough to encourage the kind of large- scale horizontal, everybody has to have a kind of application that transform platforms and cause them to keep growing.

Windows died economically and as a technology platform because people stopped the balloting new things.

Microsoft took over him that was it.

The way apple has run the app store has really discouraged application development.

I think before he worried about going down with hardware, i would remember that the app store is a way to sell more high-value hardware.

It is not in and into itself.

I will hold you over for another block.

Roger is going to stick around and we will be back after the break.

An nba all-star with the golden state warriors choosing to play in the bay area.

Taking a look at tech in the game, our weeklong series, later in this hour.

? this is "bloomberg west." i'm cory johnson.

The 24-hour hack fathon is and they must pay him three hours.

It is designed to get people talking about immigration reform.

The teams are made up of undocumented immigrant hackers.

This is that the dropbox ceo told us about it.

The tools we have now are more powerful than we had even a few years ago.

Enabling dreamers to take the tools in their own hands and build for their communities is really amazing and it helps people understand just the kind of roadblocks that these people face and some things people take for granted like being educated, getting a job that are really difficult and makes people who want to contribute cannot.

It's a big waste.

It was sponsored by a lobbying group organized by mark zuckerberg to art -- lobby for immigration reform.

Roger mcnamee is it with us.

You are an early investor in facebook.

Where do you see the most important efforts right now?

Is a twitter trying to get more tv investments going on?

A new cash cow to run their business.

Facebook is a totally different opportunity.

It is much more deeply embedded in the lives of their users.

There are one billion people who go there every month.

They're spending much more time.

To me, what is really powerful about twitter is that it has captured the imagination of the television industry in a way that is incredibly valuable but it is still not a product that people run their lives off of like they do on facebook.

Facebook has been very slow to get mobile.

They clearly broke the code there from the advertising standpoint.

They went public with essentially no mobile revenue and now it's gigantic.

Unbelievable, right?

M they have not even begun on instagram.

They paid $1 billion for instagram and it still has no revenue associated but i suspect they will get that figured out.

As a shareholder, we both own it.

I just believe really strongly that we have no access to the company so i have no information but i look at it and i see how deeply embedded it is and i think to myself, if they can figure out how to sell an ad every 100th impression, that will be a huge business.

Is instagram that big?

Look at it.

It's everywhere.

I'm a geek.

I look at it everywhere.

It's also incremental.

What this facebook have to do to grow?

It needs to do the same thing that it's doing a little bit at her every corridor.

What does twitter have to do?

They have to take a product -- they need to do a little better every corridor.

Twitter needs to make it a suitable advertising platform.

Vine has been a big game changer.

As long as you are in a single column view, it's hard to monetize.

I'm a huge fan of twitter as profit, ok?

I'm just confirmed -- concerned until the get past the ipo trading window.

What about snap chat?

Reportedly facebook offered $3 billion.

Forget the wisdom of weather snapshot walking away is a good deal or not.

You think facebook could actually realize more than $3 billion worth of value?

I don't have a clue.

I think it's a tough call.

That never stops you from answering a question.

Often wrong, never in doubt.

My observation here is that it's a lot of money to turn down.

The only time in my life a serious offer was made for a company that i was a part of that got turned down like that when it was corrected her down was facebook with a venture capitalist try to sell to microsoft or yahoo for $1 billion when it did not have revenue.

Can you imagine the kind of tragedy that would have an?

It's a very different kind of product.

The thing is, i love the energy and focus, the notion that they believe that much.

That is why silicon valley is great.

We have seen these stories when they reject these offers.

It's their business.

They are entitled to do whatever they want.

That's the beauty.

Mark zuckerberg turned it down when he had no revenue and thank dodd.

I'm not in the demographic salon not going to pretend that i can tell you whether this is a deep enough product.

This is aimed at people a little younger than i am.

We will take a quick break and we will look at some of the other companies you are invested in.

Sony playstation 4 it's the markets one week ago and today, the microsoft xbox one goes on sale tonight at midnight.

Half naked gladiators and half dead zombies.

Could it help drive sales?

We will have them on our broadcast and just a little bit when "bloomberg west" continues.

? this is "bloomberg west." i'm cory johnson.

We are back with roger mcnamee.

I would talk about what this company is.

I want you to tell us why he is for aging things -- her phrasing things this way.

Our job is to synthesize the news and the environment around us.

There are newspapers of record that you could go to and get a full snapshot of what everybody was looking at.

That's no longer true.

People spending hours often unproductive in the search of things they need to know.

Reverb is the notion of getting 80% of what you need to know and a lot of things you did not know you needed to know in 10% of the time.

Serendipity.

I actually read the physical newspaper a few days a week and the serendipity seen in these articles, the things to look for, that is the great thrill of the paper, the thing that i have not found an online equivalent for.

Hopefully this will be the online equivalent of it for you.

This is the best new way to discover the news that matters to you given the fragmented marketplace.

How so?

Here we are in news.

There are two very important things to think about.

We organize everything by topic.

That means everything that's going on today, whether it is big news like janet yellen or ongoing news like barack obama, it always appears here.

It scans the news and finds common phrases in the things that are mentioned the most at the top?

Things that pop up to the left of the word wall, as we call it.

If there is something that is of high importance, like janet yellen, it will be front and center and it will bring you to associated articles related to that from bloomberg, the post, boston globe, wall street journal.

If you tap on any of those articles you are brought to this view and at the end of the article you see a bunch of related articles.

It is back to the serendipitous discovery process.

What jumps out to you as an investment, roger?

It is not that it gives me a new view of the news but it watches what i care about.

I get to see a word wall of the topics i care about and even more important, i have another button that lets me convert my facebook feed and my twitter feed into topical word walls.

This is probably something we do not want to talk about but there was a company that had the notion of putting things in front of you but revenue grew to be a problem.

What is your plan?

We are exploring it right now.

It is front and center and a number of different models we are exploring and we will monetize it but it has to be right for the customer and the publisher.

As big money here and chairman of the board, our first job is to have a compelling application that changes the way people view the ipad.

This is an ipad only application available and it just should yesterday.

The notion is let's change the way people view news.

If we do, we will have such a large audience that monetization will take care of itself.

When i send an e-mail but is more than three or graph, i know who's not going to read it.

I wonder people have the attention span that there will be news junkies in the future.

That's a risk we are going to take.

If you have no attention span, this is perfect.

You point to her?

You were saying?

It's great.

People's minds are thinking and 140 characters.

They think in keywords and ways of how possibly can we synthesize this information that is coming so quickly add us?

I think this will help everyone synthesize and organize their minds around it.

Intriguing that all of us in the news business are hoping for new model so we can get aid.

Exactly.

-- so we can get paid.

100% of those who appreciate news happens beyond that platform.

More "bloomberg west" right after this break.

? you are watching "bloomberg west." we cover the global tech companies changing our world.

I'm cory johnson in for emily chang.

The fcc will consider allowing airline passengers to make calls from their cell phones while flying above 10,000 feet.

They will vote on the rule that will change next week after they loosened the rules on electronic gadgets allowing them to be used during takeoff and landing.

Microsoft will be taking over the nokia headquarters just outside of helsinki after the deal to buy the handset is this closes.

They will move to the campus where the network division is based.

They approved a $7.3 billion sale of the handset business to microsoft.

An online radio service pandora spending more on development, marketing, and overhead to boost its listener base.

The result is a nest loss -- net loss.

Report a day drop-in users last month.

Competition is heating up.

We are just a few hours away from the debut of the xbox one which goes on sale at midnight eastern.

It is one of the first gaming consoles in eight years and it comes just one week after the new playstation 4. to generate buzz around the launch, zombies and roman gladiators?

This is on a brand-new next- generation xbox.

It becomes the best gaming console and the best all-in-one entertaining device.

It seems like you announce to the xbox, that was up in redmond where you talked about all of the other things the xbox could do in addition to games and at e3, we were talking all about the games.

Today, the marketing about the games?

Is that the principal message you're trying to get out today?

It's going to be both things, cory.

First and foremost we are building what we think is the best game box we've ever done.

We have lots of people lined up today outside waiting to get the first one so we are really focused on the great games that we will deliver with the xbox.

And you get it home, it people will see you can broaden that out and do television, sports, fitness, all across.

You get access to both great things.

And roman gladiators with swords.

You would be afraid to not buy the box.

What are you doing in manhattan?

These characters are literally circling the streets of manhattan to end up somewhere in time square tonight?

It's a gaming business.

If you cannot have fun, what can you do?

We have some great things in celebration of our games.

We had 100 zombies walk across the manhattan bridge.

We have roman soldiers marching in as we bring in the xbox with the armored truck.

It comes together at the best theater in times square where we have people getting hands-on getting to play and we will do a countdown at midnight with tackle more -- macklemore and ryan lewis.

That is coming together here in new york.

I've seen a lot of zombies when you were not selling xbox is.

It's hard for me to tell.

Why new york?

What makes this the place to do that you?

We have had a multi city effort.

New york, london, l.a., paris, berlin.

New york has been a great epicenter for us just in terms of the meeting of the minds of games and entertainment.

It's a big city that knows how to do a great countdown.

It's exciting to be here.

We have a great event in l.a. with deadmau5 and hands-on systems there as well.

You probably should not have done it in san francisco.

People would just think that it's another day in san francisco.

[laughter] specifically, it seems the price may end up being a big differentiator between the playstation product and yours.

I wonder what your goal is in terms of price.

Is the message that your machine can do so much more crucial to the marketing efforts?

I think that's right.

This is an amazing time.

This is first time the living room will become personalized and we deliver the next- generation experience for games and television.

There's no one who does that today.

This is a big effort.

If you hearken back to when the first smartphone came out and how it changed smartphones forever and tablets changed personal computing, i think the xbox will do that for the living room.

You will get a breakthrough experience and a change in the way you use tv.

Relative to say your third tablet, this is a really attractive opportunity.

Xbox chief marketing thread just yusif mendhi.

Don't worry.

The zombies have not invaded new york.

It's only a matter of time.

Time for tech in the game.

He is a plan for a venture capitalist, kleiner perkins partner and golden state warrior majority owner.

What is he doing off the court to make the turn to venture capital when he retires?

This is what he had to say.

He has had it all -- a first round draft selection, a gold medal, a world championship name it.

A cool name, but what does he still crave?

He wants to be in venture capital.

He gave me some great advice and i went to a few meetings.

He is shooting 61% from the field.

Taking shots off the field as well and setting his sights on business secrets in silicon valley.

[cheers] he got it!

The warriors have one!

A game winning shot from andre iguodala!

I'm willing to translate it to the business world.

He chose to come to golden state because of the access to silicon valley.

It is this partial owner of the golden state warriors that he goes to.

I try to be a business mentor of some sort.

At every game, here is surrounded by some of the biggest names in tech and finance.

X facebook exec, venture capitalist andy kessler, ben horwitz.

They are taking me under their wing.

They have helped me out tremendously.

Iguodala is setting his life after the court.

I just want to get to know the finance world.

During the lockout, he interned at merrill lynch him and visited the new york stock exchange, and he is now the vice president of the nba players association.

I would like to get into the vc world but to own a basketball team is the ultimate goal.

I want to be a majority owner.

I will get into vc first and that would better enable me to have the means to do it.

These guys make so much money that they might end up owning a team like michael jordan or like that someday.

Coming up tomorrow, the deck run avivek ranadive and his group buying the sacramento kings blocking steve ballmer and his group in seattle.

The company's push into television and how it could impact their advertising strategy next.

? i'm cory johnson.

This is "bloomberg west" on bloomberg television, streaming on your ipad, and on bloomberg.com.

Google chrome cast is adding hbo go to its lineup of compatible services.

They can beam shows like "game of thrones" with the $35 chromecast.

Netflix and youtube is also compatible.

Today's new hollywood, twitter ceo costelloolo said they will continue to advertise on tv.

They are offering a twitter tv ratings index partnering with nielsen.

Will this help twitter increase revenue?

What are other social services like facebook doing to respond?

Head of social media talent at talent agency uta, great to see you.

You know this better than anyone.

I'm surprised to see twitter going after tv, tv, tv.

What is it about twitter and tv that seems to go along so well?

Twitter is all about the now moment.

They're trying to bring back with the television networks "must-see" television.

They are going to participate on two screens.

You're sitting there with your mobile device and also watching the show and having a conversation with not only your fellow viewers but with a lot of people in the cast dan participating in the show.

You get a view onto the set and there are shows like a scandal that are really taking advantage.

I have not thought about it with twitter.

Advertising business and wanting to take money from somebody else's business, you take it from the biggest it is, television.

Americans now spend more time on the internet than they do watching television which is amazing.

Americans on average spend five hours a day watching television but they spend more time on the internet.

The big budgets are still going to television ad dollars so twitter is trying to tap into that.

What does hollywood really think about these kinds of partnerships with twitter sort of going after their advertisers?

That's the money they want, particularly in a litt linear tv?

Twitter is year to partner with us.

They have always come in this way.

Nobody sees it that way.

They see it as a true partnership where everyone can benefit.

The landscape is changing so much.

How can we partner with you so that we all win?

It's not really a threat.

Can't we all just get along?

I don't believe it for a second.

What is the strongest way for these networks to use twitter?

That is your area of expertise.

It is really to engage the audience at home.

Twitter-nielsen did a study that less than one third of the time when there is an increase in volume of tweets there is also less of an increase in volume of ratings.

They're trying to engage the viewer radcom sitting on their couch to tell their friends about it and hopefully the show becomes a trending topic.

You are sitting at home mining your own business and you see you have to tune into this and you do.

You hope that it makes the leap.

Advertisers love it.

It's bringing back appointment television.

You will not tivo something and come back later.

That is why sports has done so well with twitter and television . they're trying to bring it to scripted material as well.

Eric, where his facebook on this?

Making some changes to the platform today but not specifically targeting television.

I see facebook in my office a lot more now.

They have stepped up into the hollywood.

They are building out their team with people on the ground.

You see people in their office surfing facebook?

Or facebook executives?

I see facebook executives in my office and around town a lot more.

They are building up a presence.

He will say, look, we have 1.2 billion people on our platform, five times more.

The conversation is five times greater on facebook and twitter and all social networks combined.

That is what they will tell you.

To tap into this immediacy and now-ness, they have unveiled #'s and trending topics.

Will that play be successfully?

They obviously have the eyeballs so we will see how it goes.

Uta's eric kuhn on the battle of the social networks and in hollywood.

The growing role of the chief marketing officer pushing new technology forward.

You can also watch a streaming on your tablet, your phone, and your very own bloomberg.com.

Check it out.

? ." this is-- this is "bloomberg west." his return comes after they posted a record $443 million loss at acer.

The company had earlier said that wang would take over but they spent money on acquisitions but tablets taking a severe bite out of the business.

Acer, who did not react quickly enough to mobile, enter the madmen of the digit thinal age.

These marketers are playing an increasing role in marketing budgets as they shift to promote advertising.

I sat down with the chief marketing officer to talk about the role of the cmo.

It is the person a ceo turns to for innovation and growth.

Comstock at ge was ceo and now she is heading up the venture, growth that the company.

You have heather allen who is looking at innovation.

The reason is because we are in a customer revolution because of these mobile phones.

We have them with us 16 hours per day.

We never leave them.

You look at how you are communicating with your companies and your life, through your phone.

I'm flying back to new york later today.

I have my delta at.

I check it and use it as my boarding pass.

Every touch point with the customers the opportunity for digital marketing wowing the customer.

Do companies really know the customers?

That's a ridiculous phrase.

I'm wondering if they really know who they are marketing to now in ways they did not before because that has always been the promise.

Advertising with billboards, magazine ads.

It was talking frogs.

They really did not know who was watching.

Mobile, social, the cloud.

It's how we live.

Data on our phone, frowns on our phone.

All of a sudden, when you mark checking into flights, think about the new for it.

We have this awesome orange mustang.

If you had an orange light on your car, you would freak out.

You would not know what it means.

Now if you look at what they are doing with the exact target marketing with salesforce, what pops up into the car is you've driven a thousand miles, it's time to change your filter.

Please come in and press this button to schedule an appointment -- and the car.

Is that marketing or product development?

Who knows.

It's closer to the company and the customer does of data.

It lets you as a company be relevant.

Are beginning to a point where that will change where the products are?

Who know?

Look at how they connect with hester is and it is basically helping.

The job is to help customers when they need help, how they wanted.

We were just talking about goober.

I need to get from a to b. when?

Right now.

How?

I press a button.

That is the best marketing.

That is why there is a partnership and they are leading companies forward.

Salesforce marketing cloud cmo.

Time for the "b-west byte." cliff edwards.

What is it?

2.3 million.

The waiting list that gamestop as for the xbox one and the playstation 4. the xbox one goes on sale, as you know, admit died tonight.

There i thought of people lined up down -- goes live tonight.

There are a lot of people lined up.

It looks like a really good holiday season.

Is there any worth predicting who will win at this early in the game?

I'm trying to be clever -- game system.

Will we know in one-month?

They will be pretty much neck and neck.

They will sell out all that they has.

It will be a long-term game.

When you look at these devices, there have been complaints about the playstation's technical problems.

Do they matter?

They don't. people want these devices.

The guys who wind up with them are waiting patiently for their replacement.

We will see what happens with the xbox one going on sale at midnight.

More "bloomberg west" tonight.

You can get headlines the top of the hour every hour on bloomberg radio.

We will see you tomorrow.

? . .

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

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