Nasdaq Halts Trades: Bloomberg West (08/22)

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Aug. 22 (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 from 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 late edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world.

I'm emily chang.

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

Let's get straight to the rundown.

The glitch heard around the world broke down trading on the nasdaq for hours.

How did the biggest tech companies have such major technological difficulties?

Pandora pulls in about face, grabbing limits on free mobile listening six months after introducing the restrictions.

Will it pull listeners from traditional radio?

What is next for the creative minds behind youtube with cofounder chad hurley.

First, to the lead.

We are in that major technical glitch that brought the nasdaq to a screeching halt for three hours today.

They describe the issue with a problem with the security industry's processor gives out price quotes.

It stopped all trading for three hours, meaning investors could not trade shares of some of the largest tech companies like apple, google, microsoft, facebook.

Nasdaq will work with other exchanges that are members of the s.i.p. and we will support necessary steps to enhance the platform.

Earlier this year, nasdaq agreed to pay $10 million to the government and millions more to firms after mishandling orders during the facebook ipo.

How reliable are the computers at the nasdaq?

We turn to our editor at large, cory johnson.

How reliable are these computers?

Not reliable today.

The nasdaq is strained with high-frequency trading, volume that continues to creep higher and higher.

What should have been a light summer day today proved to be a disaster on some level.

One thing that seems to be the source of the strain is nasdaq issuing' regardless of how those trades happened.

-- issuing a single quote regardless of how those trades happen.

It doesn't even explain exactly what happened, does it?

Quacks i don't think the nasdaq is sure what happened.

They knew there was an issue with the sip.

It was an information trickle, first around noon.

We knew that there were problems with nasdaq listed stocks and it became apparent there were no tics on the equities themselves.

Later, nasdaq released one hour after that, a statement saying there was a problem with the sip but did not explain why.

There was talk of reopening at 3:00. there was not a lot of information coming out of nasdaq today.

It shows they are not exactly sure what happened.

Jack lew said the sec was working with nasdaq for hours.

They were working with nasdaq on this.

There was a lot of cooperation and it seems to have made the situation a little easier to deal with.

It still caused a lot of problems with hedge funds.

Etf's were having trouble trading because they needed at access to certain nasdaq stocks.

About 1/5 of the s&p 500 stocks are nasdaq listed stocks.

It doesn't just affect apple and microsoft, it affects those treated with them like ibm.

A place for tech companies to go, how does it impact their argument to companies like twitter saying to list with us?

Quacks i got a joke e-mail saying that this is how they prepare for the twitter ipo.

A total failure.

This is certainly part of the conversation and certainly part of the many decades conversation, they have a specialist.

Quacks do they need to be taking advice from the tech companies?

Should you want trades in a millisecond?

All these things that technology has made possible is a problem for the nasdaq because the initial reason computers were bought before there was a nasdaq was to reduce errors and get rid of paperwork.

To take the dozens of people used to process stock certificates and move them from one owner to the new owner.

I don't think anyone could have imagined that 40 years later, the logical extension would be computers based on general concepts written for this.

They might not want to think about it.

You spent a lot of time on the floor of the new york stock exchange.

How much is too much?

It is not really a debate, they think that humans should be doing most of the trading.

I think others are already switched over to electronic trading.

Is this one that has gotten started and run out of control?

Decimals, is that a good thing?

Maybe not.

Can you do anything about it at this point?

Almost definitely not.

They have more than 2400 stocks with $5.7 trillion in market cap.

It is a massive number.

I think the most interesting question right now is if twitter will want to go with them.

Facebook did and it almost certainly damaged the stock brand because of the way the ipo went off.

Something that twitter will be looking at, other companies wanting to go out.

Thanks to both of you.

Pandora is lifting limits for free mobile listeners.

What does it mean for the streaming radio service as it takes on spotify?

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

? ? i'm emily chang, this "bloomberg west." pandora is doing away with a monthly cap on mobile listening, no longer limiting people to 40 hours a month.

They implemented the cap six months ago to keep royalty costs under control.

This comes as they report second-quarter earnings.

Jon erlichman is closely following the story and why the change of heart?

It has a lot to do with the success they have had generating mobile revenue.

It has been very encouraging, north of $100 million coming from the mobile related business.

This is a company that as you pointed out six months ago said that one of our key problems, as you bring in more users , the royalties that you have to pay to music labels go up as well.

How do we control that?

Over the life of the cap, they have figured out better ways to handle that.

When you skip a couple of songs on pandora, capping the number of times you can skip is one way to control that.

The advertising team is getting better at selling the inventory.

There is an upside to allow that to go away and sell the advertising.

Pandora has seen a rise in the number of people paying for the subscription service.

Did that impact this?

Does that offset the other costs?

Pandora one if you don't want the ads, and that part of the business benefited because of the cap.

They basically said now they are taking the cap away, they think it will keep that number from climbing at the rate it has been climbing.

People will continue to listen as long as they like.

What about cars?

Are we seeing headway there?

Any of these companies right now, they have gone after the phone, the tablet, and now the dashboard is the next great place to look.

We hit the streets of l.a. to examine that story in a little more detail.

In los angeles, millions on the move and sometimes lower than they would like.

For drivers, it is a headache but for pandora, it is an opportunity.

Quacks we have an early lead as one of the top apps used in the car right now.

The new battlefield is the car, where half of all radio listening takes place.

Pandora comes preloaded on more than 100 vehicles from 23 different car brands.

It translates to 2.5 million people using pandora on the road.

Nearly all new vehicles, equipped with pandora.

Like the civics and accords sold each month.

Consumers are streaming all day long and want to keep a context of a going.

-- the conductivity going.

Quacks for apple, they want to push the brand and get inside the cabin of the car and become a very standard fixture.

Quacks the head start means that cars will have their service.

It is the number one radio station in l.a.. as for those of you stuck in traffic, our condolences.

Meanwhile, something interesting the company talks about is they went and bought a patent from yahoo tied to internet radio.

Pandora seems to be going everywhere, having protection would be behind that recent purchase.

All right, and l.a., thank you.

We saw signs that marissa mayer's's efforts to turn the company around might be working.

They were number one in unique visitors, beating out google sites for the first time in two years.

More than 100 96 million users spent time on yahoo in july, up 21%. 192 million visited google.

This doesn't include figures from tumbler and does not include figures from mobile.

With us to discuss further is tom giles.

What does this include and not include?

It is a pretty big deal for yahoo, the first time she can have these bragging rights.

More importantly, hopefully for her, it will make advertisers talk about where we want to reach the most users.

They were joking earlier today, what year are we in?

Is this 1999? it is very surprising.

On the video call that she had a few weeks ago, she gave an indication that this was happening.

Listen to what she had to say.

Yahoo!'s traffic has been in decline and this shows traffic in 2012. setting aside seasonal peaks and valleys, there was a clear downward trend.

This is the 2013 page view traffic.

It is clearly growing.

We are now experiencing year- over-year growth.

Effectively erasing the declines of the last year.

Effectively erasing declines, but can they sustain this growth?

She has made changes to the site.

It looks very different.

It there are things about it that makes it much more -- a better and palatable experience.

On the other hand, mobile is really the numbers.

These don't include that.

That is where she said she wants to make improvements.

Those are numbers i am eager to see.

And more importantly, our advertisers buying?

At what point will this make a difference for advertisers?

They want to see where people are spending more time, tablet, ipad, mobile phone.

I get there is a lot to be seen on if she is making those inroads.

Thanks for weighing in.

Google glass drives buzz, but will people actually wear the goggles?

A former ceo says there is zero chance.

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

? ? i'm emily chang, this is "bloomberg west." cbs has agreed to a deal to stay on verizon, taking a shot at time warner cable that has blacked out cbs for three weeks.

In many aspects of the deal, time warner is demanding different terms than any other company in the business and is mystified by what it to be a lack of urgency to resolve this matter for their customers.

They say negotiations will continue.

Google glass is breaking the faces of fashion designers and the man famous actors, but will it become popular with average consumers?

Microsoft and samsung are trying to bring technology closer to consumers with watches.

The wearable war is only getting bigger.

Will the next thing be over your eyes or on your wrist?

I spoke to coastal ventures partner on the early edition of "bloomberg west." will there be a glass type of device, or is there going to be a glass type of device, something that you where?

10 years ago, i don't look forward to wearing something new on my eyes or my face.

I strongly prefer something on my wrist.

Can you provide the same level of computing power on your wrist?

What are the chances of google glass going mainstream?

Zero.

Q you don't hold back.

It is a very expensive procedure that people go through so they don't have to wear glasses.

The fact that people will voluntarily start wearing them.

But there are police officers, mechanics, doctors, industries that one can innovate in using versions of that.

It will be very difficult to provide an all-purpose consumer device that people will prefer to wear.

You think wristwatches will go mainstream?

It is more common to see people consulting their phone for time and bypassing the watch, but it feels native to where -- wear that.

Apple is probably going the right direction.

They will probably release upgraded versions of their first product.

I don't know if you can provide the same computing power, but if someone can figure it out, apple is set to do that.

Your experience as an operator, square and paypal.

How hands-on are you with your company's? it depends and depends on the ceo.

The more they want, the more they will provide value.

There's a difference between being an advisor and being an executive,, a leader, an operator.

My job right now is like being a chief psychologist.

Have you thought about this, have you thought about that?

Just finding those solutions through the questioning process.

Square is trying to challenge paypal, google wallet.

What are the chances square has of coming out on top?

There are so many companies competing in this market.

Payments are one of the few things everybody does almost every day.

It is a massive market, an incredible amount of money that people process better, faster, safer.

I think square is doing extremely well changing the payments landscape.

It is hard to take a company from scratch and transform the industry.

Setting the pace, setting the bar for automobiles.

Winning is another, can square win this market?

We can dominate a large fraction for financial services or commerce.

Can we process every payment in the world?

That is a big challenge.

When is square going public?

When should they?

I have no idea.

I don't have any specific opinion.

I think being a public company is a good thing.

I served on public company boards and i think it was good for them to go public.

I think that linkedin was able to take it vantage of the public offering and turn that into a marketing campaign.

More hr departments adopted those solutions.

Going public can be a strong advantage for a company.

That was the coastal ventures partner and former coo of square.

One of the -- what do the creators of you to do for an encore?

They create a video platform, of course.

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

? ? you are watching bloomberg west where we focus on technology and the future of business.

Activist investor carl icahn speaks with tim cook and that the two are planning on having dinner in september.

He believes in a share buyback and they will talk about how large that buyback should be.

Apple has authorized a buyback but i can't think it should be even bigger.

Apple has bought a navigation software company to improve apple maps.

Helping users navigate public transportation systems.

You remember apple maps was criticized for not having information about having public transport.

Gamestop has reported an 11% drop in revenue and a 50% drop in profit in the second quarter as mobile gaming takes a bite out of sales.

They raised their forecast as it waits for the release of the xbox one and the playstation 4. is sports the next best place for google to go?

Future rights to the nfl sunday ticket.

Bringing programming to web- based tv services.

Jon erlichman has been following these stories, what is the latest?

There is this battle for control of the living room and google is right in the middle of that battle doing all sorts of things on that front.

From google five or -- fiber to chrome cast, getting people excited, sports plays a huge role in that.

Obviously, there has been a lot of talk about this because youtube might go after the rights for nfl sunday ticket.

Something directv pays $1 billion a year for.

Youtube is focused on building subscription service.

Going to that next level of keeping people watching for longer times.

Give them great content that keeps them sitting there for a longer stretch.

The content can be costly.

The subscription model is something that youtube looks at , beneficial for netflix and spotify.

It is the same reason that cbs and fox want to have sports, a tool keeping people interested in what you're offering.

Google likes to pride itself on taking big.

What about buying a media company with rights to sports content?

We will see that definitively, they will do more deals.

To your point, the motorola mobility purchase is one people are still talking about.

When it comes to media deals, do they really need additional distribution?

They really just want the content because they have their own distribution.

If they were to go down the road of buying a big media company, that will get everybody talking about aol and time warner.

Not to say that there weren't challenges by motorola mobility, there was a big advantage going after that business because the patent behind it, it is something that could potentially happen, but we just don't know right now.

A big purchase google made a few years ago is youtube, 100 hours of video uploaded every minute and one billion unique visitors visit every month.

They sold youtube to google in 2006. the band are back with a new video sharing platform, but they want it to be more collaborative.

It allows you to record, share, and combine video clips from 16 seconds to 58 minutes.

With applications like vine and instagram, how will they differentiate themselves in a crowded space?

We are joined in the studio for an exclusive interview.

You say you have had this idea for a long time?

I have had thoughts about how to create better content and at youtube, things were too hectic to focus on that.

We are helping the individual get in front of a meaningful audience.

You say this has been haunting you?

Video is just a much more cool thing to create.

It's not just a photo.

You need more people involved in the process.

With mixfit, how do you create a scalable solution to allow people to tell a story more effectively?

One second longer than instagram, up to 58 minutes.

It was arbitrary, we were focused on a mentality.

We had that out before instagram announced 15. we thought we would stick with it.

The big insight with the social services right now, it into a tivoli creates more interesting content.

It is pretty intuitive and easy to use.

You can pull other videos into your own video and remain anonymous if you want to.

Why remain anonymous when so much of the photo and video posting is about identity?

And vanity?

We feel like social media is isolating and selfish.

We want people to care about the content and care about the stories they are telling.

I think there are still tremendous opportunity in video and i don't think anyone is doing it right.

Do you think instagram and devine, one are doing better?

They are creating rate solutions for their platforms.

Twitter has 100 and 40 characters and six seconds.

Facebook, people consume video through their feed.

For us, we are not focused on helping people tell sentences, we are helping tell stories.

If this is the future of video, would this hurt youtube?

The thing that you created?

I think it will be fine, they get plenty of video and i don't think they will be threatened by us anytime soon.

We are focused on hopefully creating a better tool for people to collaborate and tell stories more effectively.

Could they collaborate?

Potentially.

Really, contributing content is for the greater good of the community and all of that interlinks.

Being reused in the systemax as a trailer to get you recognition and drive people back to the crucial part of it.

You have continued to work together since you have left, tell me about your relationship and how it has evolved?

Like any relationship, you might have difficult times, but fortunately, we survived.

It is a give-and-take relationship in terms in terms of bringing the technical background.

We both have opinions, ideas, and it is good to have someone else to bounce those off of so you know you're not crazy.

Can you give us any indication of traction?

We have been pleasantly surprised by the reception in terms of people responding to the nature of collaboration, somewhat anonymous uploading.

We are being somewhat antisocial for that approach.

That is intentional to set the tone of the community.

The antisocial network.

We will talk more about youtube and how it has developed since you have gone.

Coming up after this break.

Nasa is hoping to uncover one of the secrets of the moon.

We will tell you the latest mission, coming up.

? ? i'm emily chang.

This is bloomberg west, streaming on your phone, tablet, and bloomberg.com . we continue our conversation with youtube cofounder chad hurley.

You actually stayed on at youtube for quite a while after google bought it.

Ceo until 2010, for four years.

I think they have done a great job.

I always appreciate the fact that they took a chance on us.

And i stayed on to see things through.

It turned into a real business and to some extent, i don't think youtube would be here today without their support, at least at that scale.

I think they have done a fantastic job reaching more people than ever.

A lot of things would not be here if it weren't for youtube.

Think of all the stars you have created.

Justin bieber.

Are you proud of that one?

Of course.

Are you -- it is necessary from a standpoint of having a catalog to control.

Also dealing with advertisers.

From my perspective, i don't think it is scalable.

Giving people the right tools of where they can collaborate in a global sense.

They talk about storyboards and scripts, creating inspirations.

That is what i always wanted to do and that is why i had that concept for so long.

It is hard to put a layer on top of a system like that.

It is a very efficient way to host information.

Has youtube reached its full potential?

Not at all.

Can it reach its full potential under google?

I think the reach and the brand and the opportunities everyone has to participate to either be discovered or start their own career.

If people have the talent, they now have opportunity.

What about the possibility of google buying sports content or a company that has rights and putting that on youtube?

It is a strategic move because they have the money to pay for the licensing around football.

It is hard to replicate live events.

Live sports is something that you can use to get a subscriber base.

You have had interesting comments about the future of television.

People should be able to watch anything anywhere legally.

I was referring to the companies that license their content.

The ones more aggressive about breaking down barriers around geography and licensing.

What is wrong with the rules?

It is annoying when you go on vacation that you can't access particular content.

I think the business models will big -- build a bigger consumer bases.

Which companies should let go?

All of them.

Do you think we will be able to watch anything anywhere and it will all be legal?

This is inevitable?

People will still pay for it and subscribe or supported by ads.

But people will gravitate to the content most successful -- accessible.

The acquisition of youtube was unique in that you guys made money, google dealt with a dot of -- a lot of legal issues.

Marissa mayer has likened the acquisition of tumbler to youtube.

What do you make of that comparison?

I don't think it is close.

You are primarily talking about photos and it is historically harder to monetize that type of content.

Videos have better market opportunity around advertising and it is much more engaging.

The catalog of content is impossible to replicate.

You think yahoo won't be able to monetize them?

They will be able to but it won't turn into youtube.

I think that they paid a fair price and they are essentially buying traffic.

You think a youtube deal could get done today?

People are still looking for the next youtube, for sure.

I think there are tremendous opportunities in the video space.

We are taking a unique approach , and there are other opportunities.

You can't compete with youtube by creating youtube.

People had to create new solutions.

What about the acquisition trend we have been seeing?

Like yahoo.

I think these companies are looking for answers, especially competing against google.

They are all looking for something that gives them growth.

It is harder to innovate internally.

Chad hurley, cofounder of youtube, we will be watching to see how mixfit develops.

We have been filming this whole time so we will post that online as well.

We will be right back in just a moment.

? ? i'll come back.

I am emily chang, this is "bloomberg west." nasa is going to the moon to find the mystery behind the dust that covers the moon.

Cory johnson is here.

What a mystery.

On september 6, nasa is launching a lunar -- i can't talk.

The environment explorer called laddie.

It will spend 100 days orbiting the moon studying the dust that showed up on the apollo mission.

Rick joins me right now.

Talk to me about when this dust was first observed and what we thought of it at the time.

It was first observed by a robot that landed on the surface of the moon.

A series of robots in the 60s. it was seen as a glow against the horizon after the sunset.

That sort of pointed to the possibility of levitated or electrostatic lofted.

The astronauts looked out of their command module window and before the orbital sunrise, they could see a horizon grow from that altitude.

And streamers like you would see in the rosy fingered dawn before the sun comes up.

Since the moon has very little atmosphere, it can't be the kind of dust or light scattering process that we see on earth.

The question was, what is it?

What is the mystery behind this glow?

What could it be accurate where might these kind of answers be found?

And where might they leave?

People have speculated this is very fine dust, electrically charged and launched into high altitudes by the surface charge of the moon.

That is a good deer he, but no one ever been able to test it because no one has flown in that kind of orbit with the kind of instrumentation needed to answer that question.

That is why the mystery has been there for over 40 years.

How is this spacecraft different from what came before?

What is the technology?

There is a lot of fairly new technology involved in the structure of the spacecraft to make it more light weight.

Some of the things we used to put the spacecraft together were commercial off-the-shelf parts from spaceflight providers like other business systems out there building subsystems for geosynchronous commercial satellites, and indications satellites, directv kind of things.

We used those to decrease the cost and buy something that is reliable and orbit around the moon as well.

This stuff that brought you nfl season ticket is going to bring you the dust from the moon as well.

Can it do other things as well?

It is a modular design that is built of segments and pieces that have different functions and different purposes.

Depending on what your needs are for another mission whether it be mars or other planets in the solar system, you would put the modules that you have together differently depending on the need.

It is something that you built piece by piece according to the need of the mission.

Each piece is predesigned and ready for you to use.

Apollo led to so much other business and innovation outside of space, is there still that possibility here?

Or maybe not as much of a big business world created by this particular space launch?

There is no question we have a large number of partners in the commercial sector that contributed to this.

While we tried to keep the cost down and the subsystems that are not necessarily cutting-edge but very reliable, there is still plenty of room within nasa mission design and future missions to plan into space.

They will definitely put into use cutting-edge technology.

Cool stuff, thank you very much.

Time for the bwest byte, one number that tells a whole lot.

What do you got?

35.5%, that is the degree to which trading was down on the nasdaq.

That is 82% lower than the biggest day ever.

Lacks pandora earnings, linkedin, tech companies not on the nasdaq but on the new york stock exchange.

An interesting point.

We wonder if twitter will go public and does this affect that?

.

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

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