Google's Push Into TV: Bloomberg West (07/17)

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July 17 (Bloomberg) -- On today's "Bloomberg West" the focus is on innovation, technology, media and the future of business. Hosted by Emily Chang with Editor-at-Large Cory Johnson and Senior Correspondent Jon Erlichman f17om Bloomberg's San Francisco studio, it showcases the personalities, companies and trends that are transforming the global economy. (Source: Bloomberg)

? ? live from pier 3 in san francisco, welcome to the early edition of "bloomberg west." i am emily chang our focus is on innovation, technology, and the future of business.

Google is in the battle for your living room along at apple and intel.

Google also hopes to help cable subscribers cut the cord as a begins laying the groundwork for its own tv service.

Yahoo!

Investors like what they heard yesterday from ceo of marissa meyer is, sending showers of almost 9%. do the numbers warrant that?

Yahoo!

Is announcing by another company minutes ago called ad movie.

Dreamworks releases its newest movie today, "turbo." where does the company, with these ideas?

We will go behind the scenes.

The apple/global rivalry may be expanding to your living room as both companies search for new gain-changing product.

Google has learned that it would allow owners of television to watch television shows without commercials.

It has been talking with at least two broadcast networks and pay-tv operators and this comes just hours after google has been talking with media companies to start its own on my tv service.

Talks are said to be in the preliminary stages.

We're joined by a john ehrlichman with more.

He is now based in los angeles.

What is the thinking here for google?

It is hard to say, i think we should say that both the technology companies and the media companies do not know how this will play out to.

We know that people love internet and cable television but as far as these individual details, it is still so early.

Let's think about what apple has been doing.

We know with apple tv box they have been bringing aboard all sorts of content.

We talked recently about then signing deals with espn and hbo.

Authentication, most of the content you can watch spurred these new devices -- that you can watch through these devices is approved for the cable system that exists today.

If you are a pay-tv customer, you can watch this stuff on other devices.

It makes everybody happy.

On the issue of advertising, we know dish has played around with this, it is still so early.

Advertising, a subscription- based models, the economics behind the future of television are being worked out right now.

We know that hulu has subscription and advertising and that is traditionally the way the money is made in television.

You are talking about people who peg anywhere from $75-$200 per month for their cable bill.

Millions and millions of homes across the country, that is a lot of money.

The economics behind this story are just as important as the technology.

Let's compare the apple approach to the google approach.

How are they similar or different?

In many ways, they are so different.

From the apple perspective, they make devices.

They make the best devices they can create.

Then they generate all sorts of profitability tied to those devices.

In the case of google, it is more of a let's go big strategy.

They have been toying with types -- tv for a long time and toying with advertising tied to television.

The fact that they have already moved ahead in a big way with google fiber, lighting wires in homes to get faster internet speed because that is a good thing for google whether you are surging global are watching youtube -- to take the next step and offer a cable service in their mind might be the next logical step.

It is a very bold strategy.

You could argue that google is just as bold, may be bolder, that apple when it comes to tv.

Thanks so much.

You can add insult to the name of companies aiming for your living room.

It is developing a set top box as well.

With google, apple, and intel all competing in this i read that, of whom are the early winners and losers?

How will this affect the cable companies?

I am joined by paul sweeney who follows media and internet companies.

Between apple, global, and intel who's got the best chance of dominating?

This is going to be a very big fight.

We wrote a research report a couple of weeks ago.

This is now the technology companies coming in and trying to take a advantage of what is a very interesting trend in the marketplace.

As broadband becomes more deployed around the country, fixed and mobile, online video has become a real viable product and a viable service for many americans out there.

The broadcasters and cable network and the content companies want to get their content in as many types of technologies and services as possible.

That is where google comes in and apple comes in.

Google might be very challenged to the extent they want to create a netflix-type subscription service using branded content.

It seems like apple's strategy might be a little bit easier to get done.

What do you think of this adscaping technology?

Apple has explored paying programmers back.

They want to skip these adds.

Is that a good business proposition for apple?

It remains to be seen.

Steve jobs once said it is not much more of a hobby for apple.

Folks in the broadcasting and cable business are not sure where apple will come out.

Anytime you talk about skipping over ads, you hit a raw nerve through the media ecosystem.

Advertising is such a big part of the media ecosystem.

If any ads will be displaced on any type of new over the top service, i think the broadcasters and everybody else in the value chain will want to see if there are other ways apple can compensate for the lost advertising revenue.

That is one of the main bones of contention.

What about the time line?

There has been speculation that an apple tv set could come out as early as this year.

It seems like they are further away from this than we thought.

I think so.

We have been hearing a lot from apple about the television business and whether it will be hardware or simply a set top box.

It might integrate more with the internet and other apple devices.

I think the industry is not sure what the apple plans are.

If you are google or apple or intel or microsoft, you noticed that online usage, but to kill the on-line video usage but, as surging across the world because of broadband.

There is a tremendous amount of money associated with the television ecosystem, over $100 billion of tv advertising and subscription revenue.

The big content companies in hollywood and the distributors like the cable companies, that is their pool of money.

The technology companies are looking at that money.

What about intel?

Will this be more of a hobby for intel?

Will this be a big part of their future business plan?

At this stage, it does not seem to be much more than a side business for some of these technology companies.

I think they recognize that broadband and particularly mobile broadband, is the wave of the future.

I think they see more and more applications going on mobile devices whether it is music, more video, or general news and information.

I think they want to have their fingers in the pie.

That is one of the reasons they are looking at this $100 billion tv business and figuring out a way in which they can get themselves into that business in some way.

The landscape is changing so rapidly.

Below is officially not for sale.

Netflix original shows are not getting bies . who are the winners and losers?

I think the winners are clear.

The winners really are the hollywood studios, the folks that produce the movies and tv shows.

Whether it -- whether it is viacom or time warner or disney, they are the merchants in this war.

They are producing content and some are redstone said content is king and that is no more true than it is today.

They are producing content and there is more and more distributors looking for that content whether it is the broadcast networks, the cable networks, or the over the top players like netflix and hulu.

There are lots of winners in hollywood with duff of secrete the content.

The potential losers might be the existing distributors, the cable companies, the same -- the satellite companies and direct broadcast cable companies.

Cable companies have a good hedge with their broadband business.

It looks to be some of the satellite companies might be at risk longer-term.

If they go down, they will not go down quietly.

Thank you so much whether itwhat yahoo!

Is lacking in and sells it is making up for with a stake in bally bought.

We will look at the companies earnings report and take up the numbers you need to know.

Also, some big news coming out of dell.

One of the companies executives say they are leaving one day before the big shareholder meeting.

We will have the latest, coming up.

? this is "bloomberg west,"on bloomberg television streaming on your phone, your tablet, and bloomberg.com.

Profit is surging at the end of a bob iger a. yahoo!

Owns about 24% and said that the ollie bought profit tripled to $629 million and their profit margin of 48.4% is double that of apple.

Ali baba has plan for an ipo possibly by the end of this year.

Yobbo is announcing some big news of its own today.

The search giant is buying admovie to help its advertisers reaches audience at the right time and place.

This is at least the 18th company marissa meyer is has acquired since being there one year including the billion dollar takeover of tumblr.

She talked about building products at the company meeting.

Is this a viable strategy?

Cory johnson and -- joins me.

They said they will keep buying small companies and we see that this morning.

She talked a little bit about the acquisition strategy.

I thought it was interesting some of the things that are not going so well.

The first sprint was about people and culture.

The second and current spread is all about execution.

Execution around improving products and increasing traffic.

She was not talking about actual execution.

There is no death penalty there.

She is talking about -- it was an interesting quarter for the company because they want to make big changes but all the changes have not taken root and you see that in the numbers that cannot yesterday.

She talks about an internal renaissance and morale being boosted but in terms of the numbers, piper jaffray says the numbers are not really that good.

Why is the stock up today?

I think it has a lot to do with ollie bought up.

That acquisition has proven to be one of the smartest things.

We saw a lot of weakness like in the sales number.

It showed a decline of about 1% after acquisition costs.

The company can spend a lot of money to get ravenous but would you take out that spending to get the traffic, we saw a 1% decline.

That is a big shift from what we have seen.

Look like things are getting better but now things are getting worse.

They just acquired ana d bennett.

What will you be -- what would you look for in terms of the numbers?

That have benefited from strong growth.

Clicking on their ads has increased by double digits quarter after quarter.

We saw more of that yesterday.

Even as that is happening, there display business is having a rough time.

It was not bad declines but we have had six consecutive quarters of declines in the display ad business.

If you could read the body language, it did not sound like things are getting better.

She talked about programmatic buying.

That is the interesting business of putting up adds the flash and using computer programs.

That is not going as well as they want.

We will be watching.

Thank you, cory johnson.

When we come back, we will tell you how the latest tech can steer your eyes away from that car enter your dashboard and the dell executive that is just resigned and you could watch us streaming on your phone, your tablet, and bloomberg.com.

? this is the number bloomberg west,"streaming on your phone, your tablet, and bloomberg.com.

We turn to the twist in the battle for del.

The global head of communications is resigning as head of tomorrow's all important shareholder meeting.

There was an open letter to shareholders this morning saying dell must allow the final vote to be completed tomorrow.

Cristina alesci has been tracking the story and joins us on the telephone.

As usual, this story is changing by the minute.

How big a deal is this departure?

We don't know yet.

It is too early to tell.

People close to the company are saying that they cannot draw any conclusions about the timing given that shareholders may be voting on this deal tomorrow morning.

At the same time, the shareholder vote may be today.

-- may be delayed.

We're getting more and more information from the special committee or more statement from carl icahn.

The latest when he put out this morning could be interpreted in a couple of ways.

It could be an attempt to show the world that he is not in this fourth a bump.

It indicates that a delay in the vote [indiscernible] he does not want this to affect things because there is a chance that michael dell and silver lake bump their bed and then shareholders would be more likely to vote in favor of the transaction with michael dell.

It is not clear what carl icahn will do at that point.

Maybe this brings us back to square one with another bidding war where he puts another proposal on the table.

At that point, it is really too late.

Where to we stand as far as the vote count goes?

Right now, it would seem like michael dell and silver lake are at a huge disadvantage, not just because of the sheer mass of the way the vote works but also because of the very influential shareholders that have come out against this deal with michael dell and silver lake.

T. rowe price says they do not like the 1365. they will not say they will vote down the deal altogether, they just say they don't like 1355. they are keeping their options open.

Blackrock has devoted against this transaction.

Keep in mind, this could change on a dime because by tomorrow morning, shareholders could change their vote from a no to a yes.

Things are not looking good for the michael dell camp, we could have a different story to report by the morning.

You are in texas now ahead of this boat -- big vote tomorrow and you will bring us the developments.

Thank you so much.

For the tax startup community, patents can put an early stage company out of business.

Start-ups are now taking action.

At developers are leaving -- meeting with white house developers -- white house representatives today.

Megan hughe joins us with more.

We caught up with these small start of ceo's and that developers because they were starting to make their rounds on the hill today.

There were talking to 15 different lawmakers as part of what is called the app develop for alliance.

A big part of their message is that app controls.

Want gentleman's name is peter braxton.

Has an app that would allow people to jump in line at close by paying a premium.

He was sued for patent infringement and after the judge threw out the case, his opponent decided to appeal and braxton believed he could face an endless litigation and was running out of money and his company almost folded.

That is why he joins this fight.

I think certain protections should be afforded to that startup.

They don't have this kind of bankroll.

They don't have all this capital to fight litigation especially, and in my case, the only thing i want to talk about is merit l;i sts and frivolous lawsuits, lawsuits that will instantaneously put you on a different course of action as a start up like it did for me.

History has a twist.

It was featured in "the new york times, "which put him in touch with ip nav which has patent issues.

The company became an investor and agreed to handle this litigation.

He says he is now invested in this fight.

Interesting story, thank you.

It is time for on the market.

Let's get to julie hyman in new york.

Let's take a look at where stocks stand at this hour.

? let's check on stories outside of technology.

Violent protests have erupted in eastern india after children 88 tainted lunch at school killing at least 22 and leaving dozens more in the hospital.

Preliminary tests showed that food contained a compound used to kill insects.

President obama has warned and richard cordray as the first director of the consumer financial protection bureau.

The president said his appointment will make a positive difference in the lives of american consumers.

He was confirmed by the senate yesterday ending a long battle between democrats and republicans over the structure of the agency.

Gay maris has become officially illegal in the united kingdom after the queen gave her consent to the legislation.

If the law allows gay weddings in england and wales but the first weddings are not expected to take place until next summer as the government needs time to implement that change.

Intel will report second quarter results after the bell today.

This will be the first earnings report for the new ceo brian krzanich took over in may.

Intel has been dragged down by slumping pc said laws which have declined for five straight quarters.

We turn to a senior technology analyst birgit analyst at previously worked at intel.

How much of these numbers will reflect the job that brian krzanich is doing?

These are more backward looking.

I think we expect the intel results to be marginally better than the report that came out of market research.

It recorded double digit decline in the pc market on a global basis.

Intel reports on a sell-in basis.

The intel results should be marginally better and largely in line with the companies guidance of $12.4 billion.

Pc sales are down and intel is behind in mobile.

What is the hand that brian krzanich has been delta?

Over all, if you look at the core business of pc's, it is about $30 billion.

The company maintains about 80% share.

That will be relatively stable.

We don't think business is going away but incremental growth will be a new factor.

The company has a new product line that is competitive against solutions.

When do you expect to see a bump pc sales due to the new microsoft windows or other innovations?

The refresh of windows 08 operating system which is also called blue potentially create a step up in demand.

Within the enterprise market, the expiration of windows xp support by next april should support the upgrade cycle.

We could potentially see a modest recovery in the core pc business.

What can brian krzanich do to shore up mobile strategy?

He has said we want to move faster.

I think they should continue to keep their eye on the ball which is the core pc business.

That will continue to represent the bulk of the profit dollars for the company.

I think we expect the company to continue to roll out new products targeting smart phones and tablets.

The asps are much lower than the core business.

On the silverside, the asp's are in millions of dollars.

What do you want to hear from him on the call today?

We would like for the company to set a realistic tone given the fairly weak macro backdrop.

As long as the company sets realistic expectations, 2013 will be viewed as a transition year with the company being in a position to monetize the benefits of its processors and processing investment in 2014 and beyond.

What about tv?

We talked earlier about their proposition vs.

Apple and google.

Is this any more than a hobby for intel?

I think it will eventually.

The key is who controls the living room.

The intel perspective is more in terms of the infrastructure.

The silver products it can potentially sell and that market and driving demand for devices.

I think it is key for intel to be a participant in that market but it is a longer-term opportunity for the company.

Thank you.

Intel puts a lot of effort into building its chips but the company also puts a considerable amount of effort into imagining the future.

Cory johnson has a look at the product coming out of intel's future labs.

What can you tell us about this?

They said wayne gretzky did not skate the pot, he skated where the puck was going to be.

Intel is building these massive fabrication facilities.

They understand where technology will be years before it is there.

It spends time predicting the future.

Here is a special glance.

Inside the intercontinental hotel in san francisco, you can see inside the future.

Or at least the intel version of a provincial gathered samples of what they think will be the future of technology.

Centre is monitoring distressed to drivers, id badges with personalized digital information, a semiconductor sent into supermarkets that can warn you away from food or allergic to and technologies that will require intel chips.

Are looking at the way people interact with technology first and then trying to understand what components will need to be built to realize those different experiences.

Intel technology evangelist sean cole this event together and show off all the places where the future will happen like bike to buy an intelligent vehicle members for the road, intelligent chips for the park.

And where the magic happens.

Intelligent sensors.

It is showing a vision and showing we can make progress toward those visions.

We are not only showing experiences but we are showing fundamental technology that really proves that these things are possible.

Is not just about gadgets and futuristic junk.

This is about billions of dollars of chips sold every year by intel and they sure hope in the future.

They're casting a wide net to find out what that future might be.

We are at an interesting point in time where technology has progressed to the point where we can build anything.

The only thing stopping us as our imagination.

It's always cool to talk about the future and look at the stuff they are working on.

When are we going to see any of this stuff?

They don't know.

They try to get a lot of corporate doors to see the kind of begs the possible and let them in fence.

Intel is thinking that we could have a check for that later.

You could invent the network of motorcycles.

The idea that "motorcycles -- that "motorcycles will see where they are going.

-- that two motorcycles will see where they are going.

Maybe they can team up with elon musk.

They already have the coffin transport but maybe they will have that next year.

Thank you.

We will take a look at the technology next and you can watch us streaming on your phone, your tablet, and bloomberg.com.

? this is the early edition of "bloomberg west." you can catch us at our leisure time.

In today's new hollywood, the remarks animation "turbo" hit theaters today and the main character is small but the budget is big.

It is reportedly $135 million.

It is a chance to start a new franchise on netflix.

Jon erlichman went to dreamworks for a closer look.

Remarks shares have been under pressure this week on concerns about how the film were due at the box office this weekend.

I had a chance to speak with jeffrey katzenberg off-camera at the sun valley media conference last week.

He acknowledged it is always tough during the summer box office but this story is not just about the weekend box office.

It is a long-term bet by dreamworks tied to smells.

-- snails.

My name is turbo.

"turbo"tell the story of a snai thatl dreams big.

I was racing obsessively on an old tv obsessively in the garage, draining one day of being in the indy 500. the director dreams big, too.

It started 10 years ago with a competition that trimmer tat.

Dram march hosts competitions to pitch stories.

Snail pitch was a hit but was not until 2.5 years ago he got to make the movie.

So far, the hottest and americans have been based on proven characters.

"monster is university" and it " the troubled me2." this will appear to that -- appeal to the fast car crowd, i had mario andretti drive me around the track.

That experience of dealing with that is like gave me a sense of where we wanted to bring this cinematically.

The film will setup a "turbo" tv show coming to netflix in september.

If this is part of a plan to boost tv production revenue to $200 million by 2015. netflix has become such a popular way to watch television.

My kids spend the bulk of their time watching netflix.

Tree march hopes kids will spend some time at the theater watching "turbo." aren't you just a little ray of sunshine?

He seems like an s endearing kind likenail.

For a director, there's a lot of pressure when you introduce new characters.

How did they approach that?

There is a lot of pressure but if you are the director and the creator, they say it comes down to story and that is true.

What you are trying to do is find a story that people young and old will like and go to the theater and be excited about.

The word of mouth might spread.

Then tied into that story about netflix, if people like these characters, then maybe they will be more engaged when you start to see more of these characters showing up in netflix later this year.

We will see greater than""" will win our hearts.

The race for the connected car takes off and we will give you new details on a new partnership and what this technology could mean for your driving and you can watch streaming on your phone, your tablet, and bloomberg.com.

? welcome back to the early edition of "bloomberg west." automakers are in the race to create a fully connected car but there is still concerned about safety.

Sam robards looks at the high- tech solutions to today's discussions -- distractions on the road.

Are two trends happening now in the automotive world.

I have a term for both of them.

Distraction.

On the one hand, many drivers want as many apps and services to be available behind the wheel.

The auto industry is happy to oblige.

You can stream pandora to your ford, look up yelp your lexus and used the google earth.

The problem is, doing a lot of this, means you're not doing a lot of this.

Oops.

The auto industry as a solution.

It is advanced safety systems that take over certain driving tests.

Take a modern mercedes-benz.

The act a blind spot assist will keep you out of the wake of a car coming up beside you.

Actively assist will nudge you back to the place where you find drifting away.

There are more things to distract us while we are driving but we also have new technologies keep us on track.

We don't want to lose any of our new toys, perhaps the solution is what is to come and that is cars that drive themselves.

That was bloomberg business week's sam grobart.

Imagine logging into your pay pellett camp to find yourself 92 quadrillion dollars richer which reportedly happened to want a pellett user opening his statement of via e-mail.

Paypal edited made a mistake.

Ebba reportsy can quarter earnings today.

We have a look at what this could mean for ebay.

I need to check my paypal accounts.

You might get a little something.

Big earnings day to day and lots of information.

The reason we care is not the way the stock will react.

These are rare opportunities for us to really see what a business is doing without a lot of spin.

The ebay numbers that i will focus on besides the obvious ones will be the growth they have been users.

The user growth has been strong and they have shown active users growing every quarter on a sequential basis at a strong number.

Growing increases in the amount of users a little bit last quarter but that is something to keep an eye on.

Are they going to continue to celebrate the user growth?

Barring a 92 quadrillion dollars deficit.

What are we looking for for ibm?

We see falling revenues for the company.

They say it is not that improbable because -- in part because they are getting more profit.

The revenue growth is not a strong thing.

Will be all over intel, ebay and ibm on our late show today.

The huge surge and demand for mobile data and we will talk about that next.

? welcome back.

Coming up on a late addition of "bloomberg west,"we will take into the latest from intel as the company reports second quarter earnings.

The chief financial officer joins us to break down the chip maker's results at 3:00 p.m. pacific and 6:00 p.m. eastern.

We will also cover ibm and intel.

-- ebay.

Julie hyman is in new york with more.

Let's start with stocks in the wake of the ben bernanke testimony today.

We are seeing a rally in stocks but not much.

We are seeing stocks hold onto gains on the few potentially that ben bernanke was more tesla shares are bouncing back after dropping yesterday.

$84 is the price target and analysts came back and said one is more than doubling our price target for american express is lower on concerns of the potential eu regular lessons that would cap transaction fees for debt and credit-card companies.

Amex is out with earnings after the close.

It will be a busy one for technology and we will what ibm, intel and ebay.

Let's watch the bond market on ben bernanke's comments.

We see yields go down again on the perception that ben bernanke is doveish.

Ben bernanke said there is no plan.

Is that more doveish.

The man is to get the markets on his side and he has taken the june 19 press conference out of the market because it pushed the two-year note yield below where it was then.

This concern has not been that yields went up in the market over all because they are going to normalize and some points.

Bond yields have to come up a tickly on the long and but they did not want the short and to move higher because that was suggest people would think they are tightening policy and raising interest rates sooner

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

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