Marissa Mayer a Year In: Bloomberg West (07/16)

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July 16 (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 f16om Bloomberg's San Francisco studio, it showcases the personalities, companies and trends that are transforming the global economy. (Source: Bloomberg)

? live from pier three in san francisco, welcome to the early edition of "bloomberg west," where we talk to global technology and media companies that are reshaping our world.

I am emily chang.

Our focus is on innovation, technology, and the focus of business.

Let's get straight to the rundown.

Marissa mayer, one year into her tenure, how much has she held the bottom line?

At&t is joining t-mobile in allowing users to upgrade their phones and buy them on payment plans.

The man behind fast electric cars has a plan for a superfast highway.

One that will get you from los angeles to san francisco in half an hour.

It is a big day for yahoo and marissa mayer.

Not only is she marking the first anniversary as the yahoo ceo, she reports second-quarter earnings after the bell.

We should get an idea if her turnaround plans are working.

They are going on a spending spree, buying everything from tumblr to small companies.

Yahoo shares are up but does the balance sheet warrant such a rise?

Cory johnson is here to break it down.

So, do they want such a rise?

More than 70%? putting the balance sheet aside, the stock move has really shown you something.

It shows optimism about what could happen at yahoo.

Straight up into the right, a 70 three percent again.

If you look at the 10 year chart, you get a very different story.

They have squandered opportunities, given up their business to google, and are even trying to save themselves in a deal with microsoft that has not yielded the results they had hoped for.

There has been a lot of excitement, a lot of activity.

We have seen some employees with renewed interests, but fundamentally sales have continued to stall.

They reported one quarter that was not too bad.

When we look at this company, we have seen four of the last six quarters of decline.

Are we going to see progress or is it too soon?

The expectations, the guidance, the way this whole thing works.

The analyst estimates will not tell us much of a surprise.

While we expect sales growth to be pretty flat year over year, what will be interesting is to see the details and that is how many clicks they get.

What we have seen from yahoo is a pretty steady increase on a year-over-year basis on the number of clicks.

That is a really solid thing.

The value has been all over the place, this has been a really positive and consistent trend.

Display ads, which is where the real big money is an online advertising, this has been a disaster for yahoo.

Yes, the declines have improved.

They continue to have massive shrinkage in their display business and that is not a good thing.

They are doing something differently for this earnings call.

It will be an earnings webcast.

I cannot think of a time.

I cannot think of any companies that would do a regular video.

There is a secret again that goes on during the conference call with a look at the list of asking questions.

They will scribble or they will whisper to each other.

We will not see that part.

They get the cues that they want to answer.

They will avoid those at all cost.

They will go to their friends in these conference calls.

It will be interesting to see a little bit behind the scenes there.

We will be watching as well.

Thank you.

I want to bring in the technology analysts at -- partners who has a hold rating on yahoo shares.

So, marissa's one-year anniversary, what grade would would you give her?

This issue of giving her a grade right now is the initiative that she is put into place.

We don't know if they are going to work or not.

1.1 billion for a company that has reported revenue of around 13 billion.

They have billions of page views on behalf of the demographic that is missing.

The company can monetize that property, keep that audience intact.

It will become part two.

We have spoken to several experts.

They want more, would you agree?

They have done a nice job of articulating that she wants to be part of the daily habits for people.

You check your mail, weather, sports scores.

Maybe you check your stock portfolio.

Yahoo would like to be part of your daily habits.

She has done a fantastic job of reenergizing the employee based, bring in new employees, and also articulating to investors where she wants to be as a company.

This is ahead for the company.

The reason is because of the excitement in that yahoo japan.

Because of that buyback, which, by the way, is coming to an end.

Speaking of the acquisition spree, can they buy talent?

Will they say for the long-term ? if you have gone out and bought a lot of small failed companies and you don't keep that talent intact or if that talent does not produce or change your situation in mobile, which right now is very poor, it has not worked.

They have done 10 deals already, she did 20 deals.

She is clicking these things out.

They have that on the balance sheet and people are excited about the assets.

Revenue will be flat this quarter.

We will see possibly an eighth consecutive quarter where the number of ads sold have declined on the display advertising business.

This is very much a struggling property.

What do you make of the video conference call that they will be having russia mark -- that they will be having?

We will see if we get some product demos.

Think about what apple has.

They have their worldwide developer conference which is a showcase for them to show products.

Google has their conference, microsoft has their conference.

Yahoo has not done an investor day in quite some time.

With the videocast, maybe they can get a chance to give us a sneak peek at some of the things that are happening.

You think that one of the biggest opportunities for yahoo search.

How so?

Search is one of the areas -- let's start with display.

They have two businesses, search and display advertising.

Unfortunately, the prices for display ads continue to drop.

It is like the per share price execution for trading stocks.

There is automation, there are trading desks, exchanges.

Google has become a major force in display ad.

Search is a multimillion dollar business, but unfortunately they don't control the backend.

They do control the front end and it is such a powerful opportunity for them that they can generate more relevant ads and placement of the ads on their homepage.

This is a revenue stream that they can fix pretty quickly.

Always great to have you here on the show.

Thank you so much.

But thank you.

-- thank you.

Another carrier offering new phones faster on a no contract plan.

Why at&t is following in t- mobile's footsteps.

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

At&t is joining its competitor t-mobile by offering a new plan that let's users upgrade their phone faster.

It also lets people pay for their phones and tablets bimonthly payments.

It is a sign that phone makers are gaining more power over device makers.

We are joined now from stanford, california.

How significant is this move?

I think is a first baby step in the direction of trying to limit subsidies that the carriers have had to offer.

That has been a big factor in the iphone sales, in terms of hitting the profitability of at&t and verizon.

They have been wanting to push back at that for a while.

At&t is making a big move in that direction following up from t-mobile.

The question is, how worried are they about t-mobile gaining a lead on them?

How does this plan stacked up to what t-mobile is trying to do?

Well, if we take this in conjunction with friday's did, it will be interesting to see when all of the documents come out whether they were looking at other options for sale of the company.

I think these things coming close to one another means that at&t is pretty concerned to try to maintain its lead over t- mobile.

On one hand, it certainly looks like perhaps the carriers are jockeying for power here.

Will this gives them leverage over device makers like apple?

It has been good for apple with the iphone at a high price.

The carriers have been concerned about the level of subsidies.

It has been at a level where people pay a high price.

Whether people can live with a slightly cheaper model or if they want the high-end phone, there has been a lot of talk about apple coming out with a cheaper version of the iphone.

Whether they are paying 30 something dollars for the most expensive or a cheaper phone , some opt for a cheaper version which they would not surly have done if you had a heavily subsidized price?

What does this mean for verizon?

It is part of a trend, it would not surprise me if arise and follow doing something similar.

At&t hasn't changed the price of the plan you are paying for.

They are looking at the phone for a different way.

People being able to give up the contract and get earlier upgrades.

Whether that is enough of an incentive for them to pay an extra $30 a month.

Verizon might go in the same direction.

The question will be whether there will be more pressure on price in general, pricing of the service plans, once people compare or directly the prices against t-mobile.

What does this mean for t- mobile?

Is this evidence that t-mobile is gaining traction in terms of upsetting the balance of power among the carriers?

Well, t-mobile said last year that they were losing customers to at&t than they were gaining away from them.

Now, they claim to have reversed that position.

I think that t-mobile is gaining some traction.

As they catch up with at&t and verizon, i think that there is a lot for the two bigger carriers going forward.

Thank you so much for weighing in here on "bloomberg west." thank you.

Tesla and space x ceo elon musk has set his sights on a new form of travel which can whip people from san francisco to l a in just 30 minutes.

What are the chances that will happen?

Up next on "bloomberg west." ? this is the early edition of "bloomberg west." i am emily chang.

You can also catch us on 6 p.m. eastern.

The board has delayed the buyout plan at dell until next week.

There will be a decision if the votes already cast go against the proposal.

Carl icon has been floating a proposal saying that the bid undervalues the company.

-- carl icahn has been floating a proposal.

Elon musk says that he will release designed maximum for a new form of high-speed travel which he says could get people from san francisco to l a and under half an hour.

He said -- my partner is here now.

What is a hyperlink?

What is he talking about?

Once we don't know.

-- what is a hyper loop.

We don't know.

This is a different solutions.

Something people might not be thinking about.

He already has three companies.

He has yet another big idea.

Somewhere in to put people into its.

It sounds like those old- fashioned mailing tubes where you put your change it and you shoot it through a pneumatic tube.

They would be little pots that would shoot people at faster than airplane speeds from san francisco to l.a.. when you talk to innovators like this, they always say product first, money later.

If business is about making money, is this something he could make money on?

Among the things he has discussed about this plan thing is that he is willing to talk to people who have built these before.

He said he would be willing to work with certain partners with the caveat, they have to be people that he has worked with.

They would have to work with the right partners.

They would have to do this without wasting money, which is an interesting thing to say.

While his businesses have grown at a great size, none of them have had any sort of profits.

When they sold paypal, they had massive losses.

His solar company has $150 million of accumulated deficit.

At least he is thinking about making money.

While the current products are out there, he is already thinking about the next one.

We have seen him on social media.

Why announced he is working on something that he has not even ready to put the plans out there yet?

What is the point?

Is cynic might say that he likes to avoid details.

A believer certainly says that he is thinking about great things were the details might get in the way.

I am intrigued.

I am looking forward to seeing that.

Then i could be the cynic.

What a team we would make.

I will be the optimist.

That works for us.

That is working quite well.

Thank you.

Thank you, cory johnson, our editor at large talking about elon musk's plans to build a hyper loop between tampa and cisco and los angeles.

He says the plans will be ready august 12. gosh-- our editor at large talking about elon musk's plans to build a hyper loop between l.a. and los angeles san francisco.

We are seeing declining markets.

The losses today are deepening as the session goes on.

The dow and the nasdaq both down about four/10. -- 4/10. people are looking at the economic data that was out this morning.

We will talk about that in dirty minutes.

They are talking about earnings, some of which have been disappointing.

All of that has been weighing on the markets today.

Let's take a look at what has been going on with oil.

We have seen oil falling to the lows of the session.

A turnaround in the price of oil.

The survey for tomorrow's inventory report actually shows expectations for a drop in inventories which would be bullish for oil.

That is not the case now.

That does it for on the markets at the moment.

We will be back in 30 minutes to chat a little bit about economic data today and what it means for the said.

Onstar just launched a new ad campaign.

We will talk about their new strategy about the future of the connected car next.

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

? this is the early edition of "bloomberg west." you can catch us at our later time, 3 p.m. pacific, 3 p.m. eastern.

Let's get to trish regan in new york.

Backers of egypt's ousted president are calling for fresh rallies against the interim government.

This comes as clashes injured seven and wounded more.

The muslim brotherhood says they will not join the new cabinet.

Hannah montana see is a north korean flag ship believed to be carrying weapons.

The crew was looking for drugs when they found military cargo hidden in brown sugar containers.

Mexico says they have captured the head of the most violent drug cartel.

He is believed to head the zetas cartel.

This is the first major arrest since mexico's new president took power in december.

Back to you.

Thank you.

Now to the future of the connected car, general motors just launched a new ad campaign called connected.

This is their first since 2010 and it is voiced by rich summer you might know as harry crane.

You are at the tied up thanks to two very ambitious children and, wait.

Normally you would just sit and stew about it, but you live in a time when you can control your car from nearly anywhere in your world.

For more on the new strategy, i want to bring in the chief officer for general motors -- the chief entertainment officer for general motors.

You are not airing this on television, you are putting it on pandora and youtube.

Why is that?

I think that people are finding new ways to learn about products that are interesting to them and there are many ways to reach these people.

We are putting these into environments was allows people to talk about this.

It is ironic that the tv guy on mad men is the one that narrates this.

What are you going for subliminally?

I don't think there is much subliminal there.

The guy has a great voice and it is that right balance.

People will say, i recognize that voice and familiarity.

It is the right emotions that we are driving in these commercials about that level of amazement that the onstar technology can bring.

Let's talk about that.

Onstar has been around for 17 years and you claim to have originated this idea of the connected car.

What else can you do other than locking your car remotely?

The basic premise is really around safety and security.

There are four spots that are running right now.

It really explains what the technology can do for you.

Whether it can help you track your vehicle if it is stolen or if you are an accident, that people can be there to help you and assist you.

Or, something as simple as knowing that your car can send a diagnostic report to you and a dealer so that you can be assured that your cars and the best running condition.

There is a lot more in the future.

There was another feature i thought which was interesting, someone leans on your car or bombs into it, you can honk at them?

That is one of those, as i was talking to people the other day, earlier today we announced we would be adding a high-speed connection to the vehicle.

Some of the ideas that this can bring is a much more interactive way to connect with your vehicle.

The notification of somebody bombs your car is a future concept that we demonstrated.

-- the notification if somebody bumps your car is a future concept.

Cars have been slow to keep up with technology.

Cars are not as smart as we would like them to be.

When is a smart car going to be the reality rather than just the exception?

I think you are seeing that today.

There are two ways we are looking at it.

People are connected with their phones.

Their phones are an extension of themselves.

We have to work well with those . we worked with apple earlier this year and we were the first to introduce a connection that allows you to use siri within your vehicle.

There are other people that won a full experience.

They want the best in the technology.

We introduced an award-winning system called the cadillac user experience.

This is an ipad-like hype of interaction.

This is where we are bringing the right technology for the right customers and their needs are different.

You mentioned apple and google.

They are getting more involved cars, where does that leave leave gm?

In terms of working with workers like apple and in google, we are looking for ways to help integrate the experience that people have with their personal smartphones, to look into the vehicle to make sure that it is safe and appropriate for the car experience.

With regards to a toddler striving, it will take a lot of hands working on that particular problem.

It will take a lot of effort to make that a reality.

This has real time traffic updates, what about upgrading the maps and real-time traffic information?

We introduced a product that you bring your smart phone in and you can use it on our vehicles.

People would not expect to have the navigation option using that large screen.

We introduced a that early this year so that they can take their smart phone and have the navigation application from their smart phone shared or projected on that screen and these intra-bubble cars.

The response to that on a global basis, but in europe and south america has been fabulous.

It is an unexpected level of technology for a level of vehicle.

We will continue to work with a device company and make sure they are complemented by those things we put into the car.

There is a lot of opportunity for us to do that because we know about the car, the car experience.

That provides a lot of context that you cannot necessarily get on a smart phone.

Thank you so much for joining us today.

Coming up, spotify is eyeing asia for his next market.

Welcome back to "bloomberg west." the chinese search leader is making a huge play in mobile.

They are buying an app store for $1.9 billion.

This is the most popular third hardee's store for smart phone apps and if the through, it will improve biadu's mobile access.

Spotify is applying for licensing permits and some asian countries.

So far, they are available in 20 eight countries and regions, expanding faster globally than pandora.

With us from los angeles is andy.

How is it that spotify is able to expand so much more quickly than pandora?

Spotify negotiates directly with the music labels.

This is dominated by three global record companies.

Because they have the direct deals with these record companies, they can get international rights much more quickly than pandora am a which relies on collections agencies to get its rights for music.

So, pandora has a lot more users, but how big a threat is this to be thinking about the future?

Pandora has been limited in its international reach because of how it gets his music rights.

Pandora is only operating in the u.s. and in australia and new zealand, where the artist rights groups are committing it to operate.

They would like to expand into europe, the uk am a but they have not been able to do that.

They have been quite limited.

They will continue to be limited until they can reach those agreements.

Others where we have rhapsody, they have been able to grow their business and set up because they have these direct relations with the music industry.

So, spotify is operating in hong kong, singapore, and malaysia.

What other countries are they looking at and what does this mean with the rollout of itunes radio expected later this year?

Well, they are targeting japan.

They have wanted to open up in tokyo for a wild.

They have been working through the issues.

It is very complicated.

I talked to -- about that.

You can look for that to happen.

I think he was saying this year was the target.

Ok.

thank you for giving us that update.

Thank you.

As baseball fans get ready for the all-star game tonight, we will show you how one company bringing the dated to the ballpark all to make the game easier to watch.

That is next.

-- one company is bringing big data to the ballpark.

This is "bloomberg west." chalk up another win for aereo in its battle with the broadcast networks.

The court in new york will not review the decision which stated that they do not violate the rights of broadcasters when they make their signal available.

A local affiliate filed suit against the service in in boston and cbs has vowed to fight the service in the city expands to.

Major league baseball loss 84th all-star game comes to new york tonight.

The best players will face off to give their league a home field advantage.

Technology is playing a big part in the game.

Cory johnson has more to explain.

Technology does not help suspect this win win monster homeruns but it has changed the way that viewers change all kinds of sports -- technology does not help cespedes win monster homeruns.

They are looking to enhance the sports, highlight the moving balls, players.

This has all started with the hockey puck.

What you do is changing the way that viewers watch sports.

Not a lot of people know that sport vision is connected to the growing hockey puck.

That is the first project we ever did as part of news corporation.

We still laugh about it sometimes.

Sometimes we cannot actually travel into canada and it made that we did that.

It is probably the radioactive isotopes that you landed.

The most incredible thing is the biggest of all american sports.

Nfl football, seeing that yellow line, this completely changes the way you watch the game.

I wish i had a nickel for every time somebody told me that they love that product.

As much as it has been a product for hard-core fans, it has made the game easier to watch.

My wife always credits me for understanding how the game works.

Talk to me about how the technology has changed.

You could notice when the screen was switched to a silicon graphics computer that would be able to render those images.

How has that changed over the last 10 years or so?

Tremendously.

When we performed the first in 10 line, it took a whole truck with five racks of computers to produce that line and we used to have to delay the video feed on the broadcast by almost one second.

Now, it is a matter of millisecond delay.

But technology has really made it easier for us to do.

I would expect that a lot of the technology will advance are benefiting all kinds of businesses.

I am pierced about the notion of processing power.

The cutting edge is sending it out to amazon or something like it.

You need that strike zone box in the major league game.

You need the animations above the nascar car.

Can you render those kinds of things on the crowd or do you have to own your own machine?

That is a great question because that is in the middle of the transition for us.

We need equipment to track the objects because we are actually a data company.

We track objects first.

We have to be there to do that.

Beyond that what we do is typically we render things live on site in the broadcast compound.

It has evolved that we will be able to send that out to servers on the cloud, do data searches, create a graphic and insight, render it out on the cloud, send it back to the broadcast compounds of the user is getting something that is bounced back to the cloud.

That has really changed our business and it makes us a lot more efficient.

Aren't you the beneficiary of the arms race?

This is raising cable costs.

If this slows down, is that a problem to you guys?

What we're trying to do is create the next generation of sports entertainment.

We can now render things so that people can watch a game now.

Will be back more right after this break.

Coming up on the late addition of "bloomberg west" , how has yahoo's business really changed since the takeover of bristol-myers?

We will have the latest on the video conference call at 3 p.m. percent say, three -- 3 p.m. pacific, 6 p.m. eastern.

Our markets correspondent is in new york.

Bus take a look at stocks right now where we see them once again trading pretty much in the lows of the session.

The clients across the board for the s&p, the tao, and the nasdaq.

Ben bernanke is speaking tomorrow before congress and we are on the face of that seeing yields come down to that.

This is also a bit player.

He added to holding some treasuries he thought inflation expectations would be going up.

Let's bring in michael mckee to chat on the economic data, what it means for the bond market.

We got inflation data today on the consumer side that showed it approaching the fed target.

We don't want it to go much beyond that.

Let's hope that he breaks even.

This is supporting retail sales that can push back tapering, then we get to the floor.

The cpi has been going down.

As is getting close to the two percent target.

This should be reassuring.

At least it tells them that this is not a huge problem.

If we have better-than-expected news, industrial production is off three/10 for the month.

Factories are starting to come back.

The holy cow came when the home builders released their sentiment index back in january 2006. that was the height of the housing bubble.

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

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