Apple TV Succumbs to March Madness

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March 17 (Bloomberg) –- 1-Mainstream CEO Rajeev Raman discusses the ACC Sports app launching on Apple TV. He speaks with Jon Erlichman on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

You are watching "bloomberg west." facebook recently made a huge acquisition buying whatsapp for 19 billion dollars.

People are wondering what mark zuckerberg is thinking and what to they plan to do with whatsapp . i sat down with the former facebook developer, a former head of facebook for android and the spearhead are of the facebook home project.

I started by asking about mark zuckerberg buying whatsapp.

It shows that market is really everything i hope he continues to be for a long time which is making it bets, proving that he has the ability to pull them off and getting the deal done in one month and not backing down afterwards.

Is $19 billion worth of?

Only time will tell but certainly if you look at some of the different active user comps - the market opportunity, it could replace communications on mobile.

That is worth a lot.

The mobile communication industry is one dollars trillion.

-- is $1 trillion.

When you are at facebook, were you aware of whatsapp?

When do you think they started following it closely?

That's a good question -- i think we were always aware of it given the global perspective.

80% of facebook users are outside of the state that we are aware of other companies -- they are aware of other companies.

I think it was a serious observation based on the whole category.

You had different applications.

There is a phenomena going on and that's why i think they created messenger brand.

They realize the right way to win in this market was to acquire whatsapp.

Give us an idea of what you think mark was thinking.

Why did he buy this for this much money and what does he plan to do with it?

The reason he bought it for this much money is he got the deal done.

When you want to do something fast which is a hallmark of facebook, you have to give them something, you have to make the deal compelling.

I think rice was clearly very compelling in this case.

-- i think price was worth very compelling in this case.

You have to know what your plan is and stick to it.

They want to let whatsapp thrive independently and grow and overtime, the way a couple months facebook will be like instagram.

Facebook put itself in a position to have the must-have communication and social applications on mobile.

That is a huge franchise to own and leverage.

Do you think there will be advertising?

Do you think there will be stickers?

Where does whatsapp go from here with an facebook?

I think jan is clearly does not believe that stuff and i'm sure he and marquette a real sees serious conversation.

I expect them to monetize through subscriptions or directly charging the carriers.

In some models, it is not advertising and not stickers or distribution.

Does this dwarf instagram in any way?

I don't think so.

Jan is on the board and kevin is not.

When instagram was richest it was earlier and had 30 million active and when it closed it was closer to $100 million.

Whatsapp whatsapp is about half of facebook.

It's a different time and different scope of acquisition.

I think both of them will be equally important.

What do you think of the idea of facebook working on more standalone apps?

Paper looks great when it came out but people have already forgotten about it, it seems.

One of the challenges with a portfolio of app strategy is getting engagement.

There is not a lot of mobile apps that people open every day.

That is what i saw when i was at facebook.

On the flipside, the design usable behind mobile are tapping into my experience building mobile apps and seeing the data on facebook.

Single-purpose apps are really powerful.

People want to go to an app to do a specific task and then go to another.

That user behavior is dictating the facebook strategy.

Do what customers want and that's how you ultimately succeed.

I think they are adapting their strategy and there is other challenges they are taking on.

You don't get distribution automatically by taking on the big app.

They will have to learn to reactivate users.

The morocco managing director.

Back here with me now is cory johnson and we will talk a little bit about apple tv coming up.

It's interesting to hear from bubba who was at facebook for a long time.

He had interesting observations about how mark zuckerberg works.

The history of the internet is brief so we tend to think of companies adding products and services and you think of ebay addingpaypal is a claimant plot that as a payment platform.

Or yahoo!

As sports but we don't think of the standalone world of apps.

The facebook image might not be change coming to facebook, it might be other products is set around facebook and then interconnections we cannot even see as users.

It's a different way to think about the future of this business.

How successful is that strategy going to be?

Whatsapp already has a ton of users.

Facebook's paper disappeared after it came out.

It was number one for a while and now nobody is using it.

The same thing happened with facebook messaging which is why they ended up buying whatsapp.

How successful can that strategy be?

It is nice to know that mark zuckerberg can change his thinking on certain things.

If you talk to investors and other executives in technology, they admire him so much because he is willing to say maybe i was wrong.

After shoveling millions of dollars into these efforts -- it's interesting to note that instagram was successful without advertising.

You can only have so many products without revenue.

They might be sucking the oxygen out of the room for their competitors.

If whatsapp can still the text messaging revenue from the carriers, that makes them a more valuable place to be on facebook.

Ultimately, there will have to be some revenue and profits associated with this.

Facebook is anonymously profitable.

His businesses they are acquiring do not have that problem.

We will be watching and we will talk about march madness and apple tv coming up.

You can get the games on apple tv.

Nothing on the brackets?

All i know is harvard.

They made it.

? welcome back.

So-called secret apps like whisper and secret let you share subjects anonymously but not everyone is a fan including venture capitalist mark andreessen.

He tweeted -- last week, the whisper ceo told me the company has a strict policy and what can be posted and he feels he is giving users of voice who may be felt they did not have one.

Apple tv is getting into the march madness mix.

The atlantic conference is host to the blue devils.

They are going to apple tv streaming.

Jon erlichman is in l.a. with more details.

As i understand it, they are not offering full games but game highlights?

Exactly, the broadcasting rights are locked up for a long time.

If you are apple and you want to grow something like apple tv, what are your options?

One option is to cut deal specifically with conferences that have big fan bases like the duke fan base that want constant analysis and highlights.

One mainstream is the company that built this app.

The ceo joins us now.

Let's talk more about this tricky world of rights.

Why is it that these apps can be created when you have these monster deals that the broadcasters have signed for the live streaming rights?

As you pointed out, a lot of these rights are locked up and it takes years to look at these multiyear agreements.

It's not always easy to want to do something and do it soon thereafter.

We are seeing the first wave of what is possible.

On a digital device.

, streaming device.

The other way to think about it is digital devices have an advantage over maybe what the live channel might have on traditional tv.

That would cater to the fan base if you are a school fan.

These are the type of things i think that are looking better.

Those who follow apple closely may know that the ceo, tim cook, is a fan of duke basketball and eddie cue is also a big fan.

We saw espn gravitate toward apple tv relatively early.

Are these signals that more sports, maybe more basketball will eventually make their way to apple tv?

I hope so.

It was not that long ago where the consumers reception -- perception of what was possible on a streaming device was cap videos and kids falling off their skateboards.

We have gone from that to streaming movies thanks to some very large streaming service providers like netflix and hulu and now we are starting to see sports and i think that's where it the importance is that we are starting to see the broadening of content on streaming platforms.

Ultimately, that makes this a very exciting next few years to look forward to.

What ultimately is the real game changer?

There have been discussions that google might want to require nfl sunday ticket and that did not happen but it seems like you have to see a very pricey deal cut between some sports league and some technology player like apple or google for everyone to really shift their focus.

Yes, sports rights are ordinarily expensive.

It's not quite possible to walk into this ecosystem and be able to do live games like you expect to see on tv.

I don't expect that to change anytime soon.

If you look outside the united states, we are seeing evidence of that happening more and more.

Sports rights in various forms of video sports rights which can be quite compelling are starting to make their way onto digital devices within a few minutes, within a small change in time relative to what's on air.

Yes, i think it will take someone with really deep pockets to try to change the way the economics work and i'm not really sure how big that will be?

And terms of what you do at one mainstream, this is an apt you built in a relatively short amount of time, a few weeks, what does that say about your technology?

We have always had content companies try to focus on content in the old way of doing things.

With digital having come about, we are starting to face this unfortunate rusher from content companies to develop technology capabilities and we started as a company to say to content companies that you focus on content and users in marketing and editorial and work with us as the technology partner so that we can take care of all of the underlying underpinnings of what it takes to have a successful online experience.

That's what we are here to do.

Lots more to watch for, thank you so much.

Thank you.

You know what else you can get on apple tv?

"bloomberg west." there is a whole bloomberg experience there.

We will be right back with more "bloomberg west." ? this is "bloomberg west." advertising company ray in one is preparing for an ipo and other online ad companies have seen shares soar since they went public.

What powers the data from ad companies?

We talk about this stuff, big data and data centers and the cloud and it sounds kind of squishy.

This place is 150 data centers in 50 companies.

The ceo of equinox joins me right now.

I want to drill down into one of the things you do which is enabling ad networks to throw ads in front of webpages.

Talk to me about the technology behind that.

What we are doing is enabling real-time bidding.

It's up to roughly 20% of digital advertising today done and these auction like bidding environments.

We enable these companies to come in and form communities of groups of companies to take advantage of the network density we have in our data centers and it can move ads quickly around the world.

When i think of open bidding, i think of eyes on the commodities floor trading in chicago.

Something is offered and lots of hands go up to buy or maybe sell and that is happening behind every kind of webpage but what is it about your technology that makes that more efficacious?

Our advantage is similar to stock exchanges which moved toward electronic.

That happened because we have hundreds of networks that enable ultralow latency like flash trading or high-frequency trading.

You can move stuff very quickly across multiple networks.

Because they are the same kind of facility?

We have 900 75 networks connected around the world to you can choose the fastest route to move information or trade or an ad.

Fundamentally, does that mean that an advertiser is able to reach the potential purchaser of the product in a more real-time basis?

Yes, media buyers whether it is video or mobile or print, they can move ads and buy and sell ads quicker than they could in any other environment.

Today it is 20% of the digital advertising world and it's supposed to triple over the next few years.

Will that change the notion of advertising?

We think of advertising as frogs and at wiser.

-- and budweiser.

This changes?

It absolutely changes because it is real-time.

It is being bid in these auctions.

They are reducing up to 50% of the time to be able to buy a move out around.

It is very economical and high-performance for these guys to do this so it is a new ecosystem.

It also seems like it is commoditized.

Some of these companies have had financial results and have struggled because it is a race to the bottom in terms of margin.

Amazon does not seem to care about profits.

That is a little different.

They are putting a lot of pressure because of the price reductions and we enable a lot of that work, too.

Even though a company like amazon build big storage farms all over the world, they use equinix in the cities where the connections are dense.

Talk to me about the things you can do to spur the kind of growth that involves the changing of the entire advertising agency.

It is a a little bit of following the money.

You mentioned bright role so once you get a critical matching engine like them, people have to get right next to it.

It is the engine that moves the ads around.

The buyers and sellers get next to that engine and that phenomenon grows and grows.

It typically goes east coast/west coast or enables it in singapore or asia or amsterdam.

It is starting to go global.

What are the results like?

It could be up to 50% improvement in their budget and reliability and speed to get advertising which is connected to the right venue.

Thank you very much.

Thank you, cory.

It is time for the bwest number -- $1,193,000 weibo had an operating profit last quarter.

Some odd accounting and unwinding of liabilities ultimately gave them a $21 million net profit in the fourth quarter but either way, it was the financial results from them and they have one thing twitter does not which is profitability.

Right, profitable for one quarter and twitter has never been profitable.

Interesting comparison between these two businesses.

They are very different?

Yes, the video you showed was robert downey junior.

Celebrities have to look at that platform the same way they look at twitter.

They usually team up with partners who can do the equivalent of tweeting on their behalf.

That is a huge way that hollywood ends up using these platforms to get the word out about what they are doing.

Hollywood and celebrities and china, millions of followers.

It has become a huge platform for them in china just like twitter is a platform here in the united states.

When i went through the filing, one of the interesting things is how many ways weibo's numbers really mirror twitter.

You wonder how much of twitter is them staring at other people on twitter.

And you think of weibo it seems like more of a sustainable cultural trend.

You can fit more into one post on weibo, either way we will follow his road to ipo.

If you offer watching this edition of "bloomberg west." ? ..

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

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