But right now, it is time for "bloomberg west." welcome to the early edition of "bloomberg west." i am emily chang gourde our focus is an innovation, technology, and the future of business.
In a hollywood story all its own, netflix shines in the m&a spotlight as three of its original series take home a combinedi am emily chang gourde our 14 emmy nominations, the first for an online video service.
It was the vote that did not happen, dell delayed a shareholder vote that would determine its future.
Does that spell bad news for michael dell?
With the starting price tag of about $70,000, the tass slot model s not a cheap car for most; the tesla factory to see how the electric cars are made.
First to the lead -- netflix is crashing the tv industry boss biggest party and making history in the process.
The streaming service got 14 emmy nominations this morning, the first time original content may for onlinethe first for an online video service.
Billing has been nominated for tv's highest honor.
"house of cards" scored ninth nominations including outstanding drama series.
Acting nominations or received as well.
Kevin spacey says i am delighted that despite being the new kids on the block, we have broken through and such a competitive field of the outstanding work.
The major broadcast networks were shut out again for the second straight year.
Hbo led the pack with 108 nominations.
Let's get straight to our west coast correspondent, john ehrlichman and los angeles.
What is your take?
Was in the room when the emmy nominations came down and this is important in the story of new hollywood.
There was a lot of energy when you have this announcement that kevin spacey got an emmy nomination and robin wright.
You have to understand that if you had said yesterday that the expectation is that netflix would have 40 nominations, and nobody was going to say that.
Even though we have seen this transition -- netflix is making a big push to original content as well as others, this is the game-changer @ netflix being named that these big awards ceremonies.
In this town are getting the best talent is important to making these great shows, i talked to bruce rosenblum who heads up the academy of tv arts and sciences and is a well-known tv executive and he said if you see more of this netflix activity and yahoo!
Activity and cool activity and amazon activity, the creative types in this town that are making this content say maybe we should not go to the networks are even the pay-tv players.
Maybe we should go to these on demand streaming players and that is an important shift in the story we are telling.
And get netflix does not share any numbers on how many people are watching a particular show.
Do we know it is actually driving subscriber growth?
Netflix will report its quarterly results not too long from now.
If you go back to last quarter, netflix told us that in the u.s., they had added more than 2 million new domestic subscribers.
Going into the quarter, the expectation was between -- was that they would have between one and two million.
There is no question there was an immediate bump.
As for keeping the subscribers long term, netflix would be the first to admit that they cannot just rely on a house like "house of cards." they have existing an original content and as much of it is possible for being exclusive so that you can give any and everybody what they want.
That is what they are going for.
You can have a big show like this and take credit for it but they've got to keep adding to the content library and that is what they have been pushing to do about john ehrlichman who was in the room when the nominations came down, thank you so much.
Netflix will heat up the rivalry between streaming service and hbo.
Prior to the release of"house of cards,"they said netflix would have to pump out a lot of shows to beat the hbo track record.
I think it's important to know that we have run the business on an absolute basis across many different content sets.
The of your concentration on a specific piece of content is not so enormous it would move the needle.
This would be true of "house of cards." it became symbolic.
In terms of concentration of viewership, it competes very high with studio contents.
I want to bring in someone who knows just what it takes to create original content for platforms.
Larry tan, ceo of guru and has made shows for hulu, yahoo!, and aol.
Netflix got 14 nominations and the stars got only three.
What is your take on what they have managed to pull off?
This is really a watershed moment for programming that premieres on the digital platform.
It was not that long ago when cable shows were not given -- even eligible to win emmys or nominated and now cable entirely dominates the emmys.
We are now seeing it repeated again with digital.
Gone are the days when people will say if it is good, it would be on tv.
Netflix has established that that program out there can be on a digital first platform.
They have accomplished something here.
Even though "house of cards" has gotten critical acclaim, we don't know how many people watch it.
A company research firm found that "house of cards"i can sit for less than 1% of tv shows used by netflix of dior's as opposed to 3% for "mad men." it establishes that netflix is a high-quality place for programming and ultimately a subscriber-driven network and that is what matters.
If you remember when "mad men"firsts lost, it did not have massive redding's but it was an establishment anamc, the beach had a great original's which led to "breaking bad" "what king debt." -- walking dead." it establishes netflix as a premier player in the space and people will watch this on going for years to come on netflix.
Is it time to break out the champagne and call this the second coming of hbo?
There are some shows that netflix producers that people have not heard of.
"arrested development"got three nominations but got more when it was on the network.
"arent is the new black"just came out and that is a good show.
You should check that out.
It establishes that great programming can come from different places.
If you look at what has happened in the gains over the last 10 years, cable has taken over.
There was a time when nobody wanted to be on cable and it was a place for reruns and shows went for syndication.
Now cable is the pace -- place for the best programming and netflix is right up there.
They are up against all cable networks.
There is no broadcast nominations for this category.
I think it's as a lot and it is only the beginning.
What ted sarandos has done in a little over a year is outstanding.
They already have three shows that have been nominated for emmys on a platform that has never been in consideration before.
I think that is a watershed moment.
I don't think it is time to break out the champagne but we will all look on -- back on this time the way "it's in the city"one the first ever emmy for cable and it changed the gain for cable and hbo.
I think this is that moment for digital.
You think that netflix can become hbo?
Absolutely, they need a number of signature shows that people believe are good enough to pay a subscription for.
For hbo, it was "axed in the city" and"the sopranos." it has helped that blacks.
The other show that they have done have been well received by the audience and their subscriber base is growing.
It is hollywood so you are only as good as your last guest.
Netflix right now is poised to compete with hbo and showtime and starz and all the other channels.
How hard is it going to be for netflix to create more it shows?
You know this firsthand.
They are playing a very smart.
There are working with top talent.
They are paying budgets and rates that are comparable to premium cable.
They are in the market in the right way.
I think they have demonstrated they can launch a show very successfully.
They go straight to series, not doing pilots.
So many millions of people watched and st.
Netflix on their tv or their device that they can get a good foot prints.
If you launch a show on starz, there is a limited audience for it if you launch a show on netflix, the audience is probably bigger.
Thank you very much.
Dell's richard is still up in the air.
The computer maker postponed its buy out the vote.
Does that mean michael dell and silver lake did not have enough support?
We will take you live to dell headquarters, coming up.
? dell has postponed a planned shareholder vote on founder michael dell's takeover bid.
The shareholder meeting this morning was supposed to happen but it opened in quickly adjourned moments later and it was rescheduled for next week, july 24. cristina alesci is at del headquarters outside austin, texas.
The drama continues, break it down for us.
Basically, michael dell, silver lake and the special committee watch a year's worth of work state on the edge of failure and instead of seeing it go over that cliff, they decided to postpone the independent director of dell telling a room full of shareholders this morning that they need more time to solicit votes on their deal.
They will go out and basically urged shareholders to vote for the 1365. a delay may give them more time to perhaps eke more out of michael dell and silver light.
What we will likely see is michael dell and silver like going to the special committee and telling them the $13.65 is the best and final.
Time to perhapsthat hypothetically might smoke out some bluffing shareholders who voted no today into voting yes.
They are not leaving any money on the table.
What does this mean than for carl icahn?
The outcome today is worse for carl icahn then it is for michael dell.
From his standpoint, he wanted and up or down vote on the deal today so that shareholders voted it down, which could have happened if they let the vote go through, he could have presented a demand for an annual meeting and gotten his board elected and rescued his plan which is the $14 per share buyback for about 70% of the company.
His deal has a lot of risk because at least part of the company publicly traded.
To this point, she said that would give shareholders an opportunity to participate in the upside that he believes michael dell and silver lake will have at $13.65. cristina alesci, now you'll keep us posted.
Thank you so much.
For more on the postponed a shareholder vote at dell and whether employees are living -- losing confidence, we are joined by the managing director lucerne and worked at dell.
You are in a unique position.
York said h-p and dell and now you cover dell.
Is your take on how this has unfolded?
I think the book itself, management was worried about getting enough votes which is why they postpone.
What you think is best for dell?
I agree with carl icahn.
I don't know of a manager who cannot turn it around.
They need someone who can both transform the company as well as turn it around.
That is two different skill sets and michael is incredibly talented but that is not what he is good at.
Who can do it?
That is the question.
Silver like was sniffing around at mark hurd who worked at h-p and did a good job there to some extent.
Then he actually cut to the bone which is one reason why h-p is so troubled.
Lou gerenner did a good job with ibm but it is a difficult job.
I don't know that lou gershner to come back and dell is not as well positioned as ibm was 20 years ago.
Who can do the job?
That is the question.
I put out a report last week to take the $13.65. you think shareholder should go for this?
Maybe they can get a little bit more out of this with some posturing over the next week or so but i really am not optimistic.
Did a good job with how has it impacted employees.
Are they losing confidence in michael dell?
I have been picking up that yes, employees are starting to question him.
He has been back for 6.5 years and tried multiple strategies and nothing has panned out.
Revenues and profits are down.
They spent $18.5 billion in acquisitions.
You have to question whether this is working and what is different now.
It is getting tougher.
Carl icahn had strong words yesterday, calling the dell board the most terrible board he has ever seen.
That indicates that they were somehow bullying shareholders into their vote.
Is this happening?
I don't think bullying is the correct word but they are lobbying to get a vote.
There is reason to believe that they might be talking the book try, and to get people to see one thing versus another.
How does this end?
That is a good question if only i could tell you.
Does it end next week?
I think we've got the potential with carl icahn for drama if the vote is no.
It is the potential for continued to drop.
What would that entail?
He is talking about litigation and trying to get an appraisal.
That could drag on for years.
If they get the yes vote, there is several months before the deal closes.
We will be there on july 24 and we will see what happens.
Thank you so much for joining us.
Still ahead, why a government board reviewing the and as a spy program wants to hear from google and microsoft and you can watch us streaming on your phone, your tablet, and bloomberg.com.
? still ahead, why a government board reviewing the and as a spy program wants to hear welcome back to "bloomberg west." companies like facebook and microsoft are pushing to be allowed to reveal more information on demands from the u.s. government.
They are planning to send a letter to the u.s. government asking to be allowed to disclose more.
Megan hughes in washington to break it down.
What is this proactive move?
Why are they doing this?
I've got this letter that is addressed to president obama, top members of congress, and the nsa.
If you look set to sign this letter, 63 organizations -- lots of the big tech companies.
They are alongside nonprofit privacy watchdogs like the center for democracy and technology which don't always see eye to eye with big tax on privacy issues.
Then you also got trade groups like the computer and communications industry association and the internet association.
This is a taste of what they are asking.
They want the government to allow companies to regularly release these statistics.
The number of government requests for user information under laws like the patriot act.
The letter also says that the government itself should be issuing its own transparency reports with this information.
They are actually pushing for a lot to require this.
There's also a group looking to advise congress on this issue.
They are looking for input from google, microsoft, though is this group?
We are talking about the privacy and civil liberties oversight board created after 9/11 that was appointed by the president and its role is to look at whether surveillance programs violate civil liberties.
Before this -- the fsa controversy, it did not meet for six years.
If the current chairman was sworn in just eight days before the first story on the leaks came out.
The group has already heard from national security watchdogs, former government officials of his time to hear from big tech.
On july 2, the board met with executives from apple for about one hour.
That was one of the companies that was cited in the guardian and the washington post participating in the end s a prism program . an apple spokesperson said they asked for that to push for more transparency but the board will look to talk to other companies.
The board's chairman will not comment on what other companies he has contacted.
We will speak with the chairman of the privacy and civil liberties oversight board next wednesday right here on "bloomberg west." it is time for "in the markets." julie hyman is in new york with more, take a look at what is going on with stocks.
It seems that good news is good news today.
We get economic news this morning in the form of initial jobless claims and the philadelphia fed.
Both of the surveys were better than estimated which is pushing stocks mostly higher.
The nasdaq is now lower and that seems to be related to earnings.
Johnson controls and united health and safeway are rising on the strength of their earnings.
Safeway says next year it will be returning all the free cash to shareholders.
That does it for "on the markets." we will be right back.
? this is the early edition of "bloomberg west." you can also catch as an hour later time.
British investigators believe an emergency beacon may buy honeywell was the likely source of the fire on a part to boeing 787 dram mayer at london's heathrow airport last week.
They are urging that begin to be turned off on all -- all streamliners.
Investigators are asking the faa to lead a review of the beacon on other aircraft models.
Senators have reached a bipartisan deal to end the doubling of student loan interest rates.
Under the plan, the higher charges would end in future borrowing costs would be tied to market movement.
If the plan would save the government an estimated $750 million over 10 years for it.
Final vote could come this week.
It's getting more expensive to live in the bay area.
According to a real estate firm, prices for homes in san francisco rose 33% in june from one year ago.
The median home price is now $555,000, the highest since 2007 but overall home sales have fallen 9% in june.
We are right in the thick of earnings season . yahoo!
Reported earnings this week at google reports today and facebook reports next week and the tech giant are reliant on ad dollars brief each takes a dozen different approach to bring in those add bucks,. / john ehrlichman has more from los angeles.
There is a different story for google today.
In the case of yahoo!
And facebook and google, they have to spend a huge amount of time thinking about where users are going and the people are spending more time on their own or tablet or desktop computer.
They've also got to figure out how the advertising fits into that story.
In the case of all of those companies, you are talking about very different advertising business models.
Last week, we were at the sun valley media conference.
Allen and company puts that on an idaho and we got a chance to speak with martin sorrell, the advertising giant, about some of the differences between the major technology companies.
I think advertisers are starting to understand the power of search which i think is the most powerful advertising tool whether it is pc-driven or mobile-driven.
Mobile has bags a potential.
They are starting to understand that facebook is about branding, not so much about immediate advertising impact.
We know that 85-90% of automobile purchases in america are influenced by search already.
Meantime, in the case of google, we can likely expect an update on all the companies big new initiatives.
There is boubou -- google glass, moto-x. they are important and the difference between a google earnings report an earnings call is larry pager generally makes an appearance on these calls.
His perspective is important.
Last quarter, he was talking about his job not being one to make these incremental changes as you often see in corporate america and boost earnings by couple of pennies.
He is trying to inspire the google ranks to think of that next thing so they can stay ahead of the competition and that is why there's so much attention these days on those products like glass and a driver-last cars.
What else can we expect from google?
We have a managing director at rbc capital.
It will not cross the $1,000 mark today?
Not today, no.
What are you expecting to hear?
The key thing is whether they can stay close to 20% for the court google search business and whether the underlying metrics like paid clicks and a moderation in the pricing that investors are looking for.
The motorola asset -- maybe for the first time we start to see those operating losses come down.
Those are things that people would look at to see if they are more bullish.
Will we hear more about the eighth moto-x, the super fan.
I doubt we would hear that.
This company has been very careful about talking about new products and earnings calls for it will typically be about historical.
What about google glass?
It is highly unlikely there will talk about that.
If that is a great pair -- part of the global investment but for 2017 and not for the next two years.
What is your take on google trying to be netflix and the fact that they are working on for looking into a stream television service?
I think this is one of those numerous google experiments they will try.
There has been google fiber and google film and i have wonderful asset in youtube that is monetized and it's almost as much money as netflix does, actually more.
I don't think that will change.
The streaming service they are offering, i think that is the small initiative and will not have a material impact.
Speaking of netflix, 14 nominations, earlier, our guest said he thinks that netflix is the next hbo.
What do you think?
There are about $30 million -- 30 million u.s. subscribers and we think they will be at 40 million soon.
It is unlikely they will be materially better than hbo within two years.
But they have to make more original shows.
Can they do that?
It is a fly will company so the more subs they get, the more revenue they get to make more content and buy more content and that will generate more revenue.
For the foreseeable future, the majority will be other people's content and not original.
Our original is a hedge and it has been successful and the nominations prove that.
We are seeing some interesting a pershings -- approaches to earnings call.
Netflix earnings call is coming up and have an analyst and a journalist moderating the call.
They are making a mistake.
You or i should be there.
What do you think about reid hastings trying to be transformed into them the way they share information.
Is this a good thing?
I don't think it is worrisome.
The financial market has assumed that since they will go on tv, they must have really positive news to disclose.
I would not make that assumption.
We have had a couple of quarters where read hastings has posted positive comments on facebook.
People have over-interpreted that as positive and the stock as re-corrected.
Do you were another analyst could get information before you?
I would doubt that.
I have never had an disclosure issues with netflix.
I doubt they would do something as stupid as that.
Thank you for weighing in on google and netflix.
Coming up, how do you make a tesla?
We get a tour of elon musk's electric car company right after the break.
You can also watch us streaming on your phone, your tablet, and bloomberg.com.
? microsoft reports earnings after the bell along with google and windows maker has been trying to make a splash in the tablet market with the surface.
Got confirmation of how key the tablet market is.
Tablets' sales are forecast to grow faster than smart phone sales every year through 2017. revenue from tablet sales could reach $125 billion in 2017, a 111% increase over last year.
Smart phone revenue may only climbed 66%. be sure to tune into the latest vision of "bloomberg west." we will bring you all the earnings numbers you need to know from microsoft and google.
Turning now to tesla, ken elon musk'electrics cars win over the world?
That is in a cover story of this week's "bloomberg business week." we got an inside exclusive look at tesla's fremont factory for the story.
? we are here inside the tesla factory getting the super secret tour of the cars made from scratch.
Last time i was in the factory was in the early days and it was quieter.
I have noticed a huge difference this time around.
You say you are doing about 400 cars per week?
How big is the factory?
About 5.5 million square feet.
We're at the bottom of that does not necessitate using everything but one day soon, we will use it all.
All those cars.
I could stay here an entire week.
People said it was too expensive to build cars in silicon valley.
We think it is competitive to do what we do here.
The price will be higher than other motorcars right now but we are convinced that by integrating manufacturing processes here, we save money and the pipeline costs will be scattered around the u.s.. hello.
Can get a car at the end of the tort?
We have about 140 robots.
They work on the body structure of the cart so it is very tech intensive.
That is the inside of a car and they are putting it together.
It is so real.
People who are used to factories, even for us is pretty cool.
That is inside tesla's fremont factory and you can read more about the inside look at test in this week's issue of "bloomberg business week." a new mobile app and to make your workplace more social, next to you can also watch us streaming on your phone, your tablet, and bloomberg.com.
? welcome back to "bloomberg west." tomfoolery is a mobile app.
The company just launched its first product, a social app the workplace.
That lets coworkers chat ensure funds and post interoffice updates.
Joining us now is the ceo of tomfoolery.
You have an impressive resume.
You worked at flvcker under yahoo!. how does this work?
It sounds like facebook but for people i work with.
We spend more of our weekend time at work -- weekday time at work than anywhere else.
We have incredibly important relationship to reform the people we work with.
The best tools we have to run those relationships are email or im.
These are things that were invented 30 years ago so we can do better than that.
We want to create a new kind of social app that takes the best of was developed for the consumer world and make it fun and easy to use for people at work.
Is that a good way to say it?
It is like facebook and 20 but i only share with people i work with?
That's exactly right that this is an gruss suit -- this is supposed to improve productivity?
People that say they have a real friend at work are seven times more likely to be engaged with the companies mission and at the companies work.
That translates to 21% higher productivity generally speaking.
You might think that sharing photos and having fun with your co-workers is a loss of productivity but in actuality, it is the opposite.
How is it different from social enterprise tools out there?
That's a great question.
There is a lot of rhetoric right now in the marketplace around enterprise software.
If you listen to the words that people are using, they are using words like productivity, respected as,rui in human capital.
We love to think of ourselves as human capital.
They talk about things that are around task management or document collaboration.
We talk about these things and if you look our will work day, we spend a small percentage of their time doing those things.
Assigning tasks to people or collaborate with people and documents.
We spend the vast majority of our time talking to people.
We get feedback and get feedback and decide on how to approach the next meeting we will be in together and figure out where to go for lunch or making decisions.
That is the real business of work.
We really want to focus on that part of it and make that communication and social experience as easy and fun as we possibly can.
You guys are working on an app for google glass.
You brought your glass with you.
You have a team of 10 people.
Why spend time on google glass?
It is because we are geeks and super stoked about mobile technology of any kind.
We think google glass is a very important experiment about where the future of mobile goes.
Will be big for people at work?
I don't know specifically if it will be big for people at work but tools that know who you are and where you are, what you are doing and filter all that information we get in our lives based on what your status is now, i think that is absolutely the future.
You can imagine a scenario where i walk into a conference room for a meeting with someone and a conference room now knows it is occupied in other people know it is occupied.
The speaker phone starts dialing my team member who i have to have a meeting with.
Is wrapping up a meeting.
You are able to get a message across that he is busy but the call is connected.
You used to work at yahoo!
And iran flicxker a while.
What you think about the changes marissa meyer is making?
I am hearing great things about morale.
Friends of mine are still there and love the changes she is making.
I think they needed someone who is a product-oriented person at the head of that company.
That is absolutely her strength.
I worked on flicker or a long time and i don't think people recognize how challenging it can be.
We will have to leave it there.
Thank you for being with us.
? . . welcome back.
Coming up on the late addition of "bloomberg west," google is gearing up for a second quarter earnings report this afternoon.
Is android still growing?
We will be learning -- maybe -- more about google glass.
We will also be talking to brian white.
Verizon is already out with earnings before the bell this morning, so growth, 4%. profit surged 3%. verizon wireless adding 941,000 monthly users, ahead of estimates, but boosting forecasts were capital spending due to its rising customer base.
Verizon also said it is considering following t-mobile and at&t introducing a plan to let users upgrade to new devices faster, though it did not give details.
It is 56 after, which means it is time for "on the markets," a look at what is moving this hour.
Let's go to julie hyman in new york.
Take a look at stocks.
We are seeing gains today, except for the nasdaq.
It dipped into the red briefly earlier, now back into the green, but folks focusing on economic data.
We will get to that in just a moment, but the tech has been lagging.
Just a highlight here of what has been happening.
Both intel and ebay shares falling after both companies came out with earnings that fell short of estimates.
Particularly intel is suffering because of a continuing pc slump.
Ebay suffering because of weakening demand in europe and asia.
As you mentioned, we will hear from google after the bell.
Shares have been trading lower after that announcement, as have shares of microsoft.
Let's look at treasuries.
We had that better than estimated economic data, and to talk more about that, let's bring in our economics editor.
Mike, you know lately it has been sort of a good data is bad for the markets, but that did not happen today.
Kind of interesting because ben bernanke goes up to capitol hill, essentially kind of dovish .
This text has been automatically generated. It may not be 100% accurate.