RetailMeNot Goes Public: Bloomberg West (07/19)

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July 19 (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 f19om 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 all the global technology and media companies that are reshaping our world.

I'll cory johnson in for emily chang.

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

Let's get straight to the rundown.bloomberg has just learned that apple is buying hopstop.

This is a fixed the apple maps were waiting for quest --? surging more than 30% in the first day.

Could this help push other internet companies like twitter toward an ipo?

Could cbs yanked is signal from time warner cable?

And some the biggest u.s. cities.

We will explain the fight that will take big bang theory off the air.

First, to the lead.

A battle for mobile phone supremacy.

Maps are key.

Apple has made another trip.

We are learning the tech giant is not making one but two acquisitions today to improve as a must -- much-maligned map app.

They have just acquired cap -- hopstop.

It is also buying location ary.

It helps users find future business.

They have struggled over the past year.

Even tim cook making a public apology over early flaws in the map software.

Turning to me now is work.

-- mark.

A perfect guy to have today.

Why is hopstop so interesting?

The right number of criticisms.

You have to bring them.

It did not have transit directors.

Google has very successfully get from place to place on mass transit, that was notably lacking.

That was the lacking feature.

It is something that is hard to do.

It is interesting overdue acquisition.

Apple has always done acquisitions but quietly and small.

That would rather build than by it.

You essentially do investment banking for mapping companies.

Do anybody know if there are active, are they?

This is apples fourth and fifth apples -- acquisition.

Most of them have been pretty small.

It was an imagery acquisition that was misplaced.

These are pretty good acquisitions.

For different reasons, but they fit in there.

What is their gold?

Are they trying to make the mapping app that is workable or are they trying to catch google is work those are different objectives.

Why are they different?

My opinion is the google map app is really terrific.

Do you think that's a bad goal is to get toward or is a different quest mark is a different approach.

They are to organize the world.

Somewhere , they realized a huge truck has a location component to it.

They did not to look into the mapping apple but to organize locations.

That number is only getting bigger with mobile and the internet.

They go into it without the mindset.

May be that they literally top-down approach where is stuff?

Not what the stuff look like as you discover it.

The google app and i will add a waste -- wave shows you from a birdseye view but humid view what you are seeing.

An old-fashioned trueblue whenever.

If you look at where google is going now and where they are taking it, they are taking it to personalize the results.

If you search for something and i search for something, your results be different from mine.

They know you and they know me and they can hypothesize.

Most of the other guys in the space and apple is one, they are trying to button -- build a mapping app.

There's a difference and the vision they bring to it.

Although these acquisition for apple are very good.

They are smart and they fit with what they are doing.

That will bring the good functionality.

Are they in a rush?

You bias, you are in a hurry?

You look at locationary.

It would've been good three years ago.

Integrating and cleaning of the data and geo-data is notoriously messy.

It gives them some technology that really cleans it up and makes it work better.

Arguably, it is not in a rush.

They have done it three years ago, they would've, with 3 -- better results.

In this arena, we presume that google is a potential acquirer.

Companies are for sale, whoever will call back and say are you sure you do not want to bias there will be an offer.

Who else is on the table?

Is common -- toomm tom and here, garman?

To have so much information about, they should be a natural.

We passed on wave.

There's not been been a lot of activity for facebook.

That has taken a backseat.

They seem to not be doing as much.

Amazon is another link that will be interesting.

Samsung is another interesting one in there.

Samsung would like to build beyond the handset into the operating system.

Maps and locations to translate that is kind of a core functionality of it.

Garmin, not so much.

Tom-tom is more look at on the other side.

Is there a place where it is total or in brooklyn up teases?

-- broken up pieces?

Was is nice -- it seems like a good time to be a buyer.

Still to come, what does edwards noted not to know?

The secrets he was not able to crack my next.

? i cory johnson.

This is "bloomberg west" on bloomberg television and radio and streaming on the bloomberg tv+ ipad app and at bloomberg.com.

Former security advisor contractor edward snowden release of documents that showed the american government was spying on its own people.

It turned out some information he did not get could not get.

This is business week writer who interviewed officials that snowden did not have as much access to information as he claimed.

Michael joins me now.

Would we talk about him not having access, what did he not have axes to that he claims to have access to?

He took the job and work in nsa to get a list of computers that the u.s. government had had.

Get him -- access to a lot of information -- it turns out he had an accent a lot of information.

Essentially very version of a corporate network.

Intelligence agencies and the nsa especially had deeper secrets that it keeps on networks that are not connected to the corporate network.

These are networks that if you going to room and sit down before you can actually get access to the computer, sometimes they are connected.

They are encrypted internally.

It turns out the unit that does the hacking afford computers is one of those that he uses very strict, infrastructure.

It does not use contractors at all.

He was at a disadvantage.

The big business aspects here.

What was the change and when did happen that contractors and private businesses got access to data like this?

If we are talking the intelligence world, it was 9/11. the intelligence capacity had been shrinking in the 1990's. 9/11 happened and they wanted to expand it very quickly.

They saw themselves fighting a global insurgency that you needed to come back to that with a national presence.

They expanded by hiring lots of contractors.

One of the issues, they never went away.

The use of contractors always described as a temporary thing.

They did manage to embedded themselves so deeply into the intelligence establishment that did they go from a temporary to a permanent presence in the intelligence.

But it also seems like it is part of the cup that all government side.

It goes all the way back to al gore hurry at this notion that we have work to do, but we do not have as many workers to do it.

So what outsourcing.

Is this the flip side?

Is is the compromise?

Yeah i'm a absolutely.

It is more expensive in the short term.

When they want to expand after 9/11, they kept hitting these limitations that congress put on the number of employees they had.

It was gave the money but they cannot hire more employees.

They hired contractors.

There is a question of whether or not the contractor's especially blues out and -- booze allen, they provide the bodies and special at a level like edward snowden.

They do not control the computers that he said cap -- that he sits at.

They can claim it was not their fault.

There is a question of whether or not snowden should have been there in the first place.

Probably not going to help the with negotiable price.

Michael riley, thank you very much.

Microsoft had his worst today and the public market since four years following more than 11% after the company revealed it has lots of problems with his windows eight software and a write-down on the surface tablet.

It told getting hurt with slumping pc sales.

It was flat for the coming quarter.

They are working to sell more and tablets smartphones.

The biggest issue impacting these companies if the economic slowdown in china.

Joining me now is paul kedrosky.

Would you look at these quarterly numbers -- when you look at these quarterly numbers and see that justice, the bigger picture might be missed here.

China has the most of all.

It is easy to started telling stories about microsoft screw ups and everything else that is going on, the transition to mobile.

Was a lot of investors seem to be missing is the incredible growing of s&p 500 large-cap high-tech companies as a key marketplace.

China -- it is the most china dependent sector.

Among those companies do have microsoft, intel, qualcomm.

As much as anything else explains a wide this across-the- board gap has happened in all of these large tech companies.

It is too easy to ply the mobile brush here.

It has more to do the macro factors out there.

People are not used to applying to tax.

A miss backup for minutes.

When you you think about economics will do in china among my mind goes -- china, my mind goes to basic materials.

When it comes to a slowdown in china, and a wonderful chart you found.

You already tweeted out.

It really shows us there is a very different type of impact.

The economist have this index which is something you would see on light night -- late-night television.

It is a whole different thing.

Totally different.

Different commercial.

The idea is, the really powerful one is you can segregate companies, dependency on a geographic area.

It is important to look at the impact of china.

You come to the realization it is not about raw materials and what is going to happen to the currency.

It's a story about what is happening to the most dependent companies on the china economy.

It is, technology.

Most of the companies are already troubled like microsoft.

Is tablet problems.

This fixes a layer against the top.

Many of the large cap tech companies.

Where would you see this in terms of the biggest impact within technology is marked those companies that are ready have had went.

China not completely fallen off the map.

Do you look for those companies, the worse companies in technology, and why?

Is a good starting starting point.

If you look at the graph that is based on, you will see quickly it is microsoft, intel, and ibm entered the most dependent -- that are the most dependent across-the-board.

If you look across north america, the platform is largely seen as reminiscent of 1994 or something like that.

The markets where they continue to find penetration success in asia and his rapid development has gone ahead.

These are the places where microsoft has had some success which bolstered their business.

Now all of a sudden, this is a complete turnaround.

Those are the places i would look first area less so on the semiconductor and a more on the direct consumer connection.

What about apple?

Ever report the next week.

That opened a bunch of stores in china.

-- they will report next week.

-- they have opened a bunch of stores in china.

What should we expect from them?

It is hard not to, it is hard to imagine how they do not have exactly the same headwind as everybody else.

They are facing all the same forces.

China is the group rick -- biggest growth market place.

Maybe everything changes.

In the current quarter, it is difficult how these factors do not hit them in the same way.

My expectation is we will get the same story especially on the top line.

Speaking of dependency.

Pogo trotsky.

-- paul contrasted.

-- paul d kedrosky.

The fight that could take cbs off the air in some of the biggest u.s. cities, coming up next.

? welcome back.

Charter communications seems to be getting more serious about buying time warner cable.

We have learned time warner is working with goldman sachs to pursue a bid.

The big backer is mr.

Malone.

Last week alone told us in sun valley that a merger is good for the media industry.

In the media business, it drives down costs and makes it possible for larger investments.

In order to improve the service for the consumer, you'd be larger, not monopolies, but the larger places.

Time warner cable rejected an informal approach from charter because charter reportedly did not offer a premium.

Speaking of which, time warner, a big fight between time warner and cbs.

Cbs did end up being off the air in los angeles and new york city among them.

Cbs is asking for re- transmission fees that are 600% more than the others they are paying.

Time warner is battling back.

Jon erlichman in los angeles with more.

Time warner cable, what is up with that?

600 is what they are talking about possibly.

Some folks in new york or los angeles may have seen some the commercials running right now that are warning them that sold their favorites shows may go black.

Some people are wondering, did we just go through this a while ago where the content craters and cable companies were battling over these fees?

Perhaps cbs has been a little nicer in the process.

This is become an important part of the content business.

When all of these companies talk about cutting -- when all of these companies are talking about content being king, they can also get the entire fee from the pay-tv provider.

We have entered this world where the cable channel themselves generate huge fees.

The networks are saying, hold on, we spend all this money on the content and in some cases our fees do not look that great.

Behind the negotiations, cbs is saying and some of the markets what you are paying us compared to cable channels is relatively low.

I want to goes public and say they are complaining and air their dirty laundry.

It is good for us.

We are thankful for stories every day.

When you look at these guys, or is something inherent about the value that time warner gets out of these guys.

People realizing that people watch this our local advertisers has greater value.

Cbs thinks they can charge more not that they have higher costs.

I think that everybody looks at where the money is being made and decides at the end of the day, they each want to get a bigger part of it.

The additional part of the storyline is if these fights go on and hypothetically you have blackouts in some markets because they cannot get to the right number of what they think is fair, one of the big questions is when you see more people say forget it, i am paying $200 a month, i can get a netflix subscription.

It is hard to say.

One of the big factors that will play for everybody is sports programming which of course you cannot get live sports on netflix.

One analyst we spoke with today said, football season, maybe everybody will work something out so we can all watch our favorite teams.

Jon erlichman, thank you.

By softbank -- why softbank failed to break into the music business.

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

I am cory johnson.

Your top bloomberg headlights.

Bloomberg learned the faa will higher inspection on all boeing dreamliner's. this comes after a battery of the transmitter was pinpointed as a likely source of the fire on board if buyer -- on board a plane.

Google is making some tweaks to gmail.

A new feature that allows you to expand mailboxes.

The features will be available in the next few days.

A merger could be coming between china and number two and number largest search engines.

-- number three search engines.

Baidu is 80% of all of china's searches.

Japan's softbank tried to enter into the music business by buying a business last year.

Have a billion dollars -- half $1 billion for universal but they were turned down.

Andy, softbank's bid valued at roughly at 2 million more than is market value.

That is a pretty good price, but yet they said no.

That is a pretty amazing price.

It took a lot of people by surprise.

What underscores it is the changing nature of the music biz.

Universal just last year acquired emi.

That this is as getting much, much bigger.

They are biggest director -- worker company in the world.

And one of the biggest music publishers.

The combination if you wanted to start new technology services involving music would be keep it off for a lot of advantages.

The premium on that business because of his pure scale is maybe weren't. i do not really understand where the profits are in the music business now.

I am not understood this is total won a grammy.

I do not get it.

I do not understand in this changing world with pandora and the emergence of spotify it where the real money is.

Where does the music industry think is greatest value is right now?

Fox is deftly in the digital space.

It is definitely an mobile.

-- it is definitely in the digital space.

You can listen to spotify for free, but if you want to take on the go, you are going to pay $10 a month.

It goes for any streaming services.

Or you are going to buy a tracksuit can listen to it any time you want unless opposed to is cyclic throughout your pandora station.

That's mobility and that ability to take it on the road with you is where the premium is coming from.

That is where all of the growth in this industry is coming from.

Do you think ultimately -- the music business has been making a lot of money over the last 20 years.

Repackaging the new formats so when they taken apple -- take an apple -- album --users picking whichever songs they want.

Have they figured out how to make a profit without having to sell 12 songs every time they got an interest in one?

Ask what is happening is they are taking a longer view, think about the film industry.

They come out with the film one week and it a box office run and then there are 10 years of payments that follow.

That's kind of how the music industry is looking at a sunk.

A song comes out and there's a huge spike in the level of interest in that piece of music.

Then it calms down and there is this long to tell that people keep streaming and buying get.

It is on the radio.

It is tweeted.

That long tail is where they are seeing the profits coming from.

What's interesting.

-- interesting.

Bloomberg news andy.

Thank you.

Retailmenot made his debut on the nasdaq.

This is just the third consumer internet company to go public since facebook's rocky ipo.

We'll discuss this and a lot of other companies that have been considering ipos such as twitter to take the plunge but work -- plunge?

Craig, good to see you.

I do not know a venture capital and the world who do not want to see more ipos.

Is important blood line.

It represents a critical source of capital and liquidity.

If the ipo market looks tougher, m&a evaluations go down.

I wonder -- does anybody talk to you about this?

I got an e-mail from a friend from i'm asking me about this.

I said i do not know what it is.

Is it a good thing or a bad thing?

This is one that everybody is watching.

It is a big deal.

A lot of the companies that are sitting on the are watching to see how it goes, the ipo backlog now is 2.7 billion dollars.

A number of companies.

The value of companies that have filed but do not have go public.

A number of those have been filed for over six months.

If a number of guys were waiting to see how things go.

That is despite of the jobs act that let companies secretly filed and go to the fcc to see what they will look like and put yourself in a better position southern not withheld have a dill hang in there for ever.

You can confidentially filed.

A could be more robust.

In general, the jobs act has been a great boost to the ipo market.

It takes time for these things to work through the system.

The jobs act and president obama signed into thousand 12 will have a meaningful effect.

It takes great advantage of that.

I read a prospectus today.

There are a lot of things they do disclose like ceo compensation whether their accounting is any good.

They said we do not know yet, we will find out later.

There is a little bit of -- a couple of things, there sells.

They are slowing down substantially.

More worrisome, maybe weren't some about the operating profitability.

Going from one to 37% in spite of a lot of acquisitions.

You have their margins falling from 38% to 30% over five quarters.

That is not a superstrong ipo.

They are coming out in the summer.

They put themselves against the wall.

And they have they have some strong things going for them.

Get great opening day for them.

They have fantastic growth margins.

94% is unheard of for a lot of companies.

That's great net to merge -- margins.

Like you said, there are key things they have to do to keep it going.

After keep their revenue growth up.

They have done that by acquiring a lot of companies in the past.

After the team to do that on and in organic or organic.

It has slowed down.

Is this good news , bad news, are you happy it has worked out, or could hit -- it have been better?

It is good news for the industry.

It will determine their long- term valuation.

They will have to prove it.

Time will tell.

Craig hanson.

As the rise of robots going to cause a real problem?

Next.

You can watch a streaming or older.com.

-- bloomberg.com.

? i'm cory johnson.

This is "bloomberg west" on bloomberg television and radio and streaming on the bloomberg tv+ ipad app and at bloomberg.com.

A videogame industry has plunged in june as consumers likely waited for new devices like the xbox one or playstation for.

Sales of videogame hardware and accessories fell to i've hundred $93 million area -- $593 million.

Nintendo ds was the top device for the second straight month.

Those sales jumped 42%. the robots of today are not far from what film directors envisioned.

They can work on factory lines or hunt for clues or talk to humans.

Could this be creating an employment crisis but work is the subject of an interesting new book called "robotalypse." robots do not look like a rosy from "the jetsons." this seems kind of ridiculous.

Maybe when you puzzle it out, maybe it is not.

Most people with seabees as mechanical things like the terminator.

Most of the low-level jobs do not look anything like that.

Everyplace a very simple jobs initially and then over the long term, as the technology improves, and 30 or 50 years, you can to the point where yes, you robots working around your house.

A robot quite simply is anything physical that takes away or does amanda will cast.

-- or does amanda will -- manual tasks.

Eventually, you will see a lot of technology that will turn into robotics.

Things that were originally quite manual will have robotic extensions.

Low-level jobs are going to be replaced by these technological robots.

We will see 70% additional jobs disappear.

Against me an example of where we are seeing this right now.

-- give me an example of where we are seeing this right now.

One specific example.

And technologies that are replacing on production lines.

There is robot technology that you can program within minutes and it will replace the job of a normal human and that costs around $15,000. if you look at the economics, it is reprising that most -- more is not being done.

They are trying new things out in their factories.

Would you go to most of the amazon distribution centers, it is fascinating because they have a software driven experience that involves people who walk around 15 miles a day.

What is going to happen over the next two years, that will get replaced.

Low-level jobs will get replaced by the robotics.

It is how we deal with that.

We do start to really lose implemented because of technology.

How does humanity deal with that?

That is a really interesting subject which is what i really write about in my book.

Did you see "sharknado?" yes.

You could've called it robot nado.

You could've made a movie.

You are dyslexic.

You wrote a boat -- a book.

Tell me how difficult it was.

I was told i would never read or write.

It was the most challenging thing i had ever done create -- and done.

Thankfully, my editor, it is something you can read and enjoy.

It is thought-provoking stuff.

The changing nature of business.

Been all -- ben way.

Author of "jobaclypse." how do they manage to fight off rivals?

The ceo will be next.

? welcome back.

I am jon erlichman -- i am cory johnson.

Online shopping site modcloth is making big bucks using the old and the new.

That brought in $100 million in sales in the past year.

Most that through mobile sales.

Jon joins us now with more.

More than 30% of the traffic they get coming for mobile devices.

That's a big change change when it comes to e-commerce.

Eric koger joins us now.

A lot of people know your business.

For those people who are less familiar with how it operates, what is the business model?

What's modcloth -- modcloth it is an online retailer only.

It involves our large community of women from around the world and basically all aspects of the business.

We sell vintage inspired fashion from small designers and our own proprietary development.

We enable the community to submit design ideas and vote on products before we take them into production.

They have a huge influence.

We also involve our community and the site experience by letting them upload photos of themselves in the shop outfits of other real women wearing modcloth.

Everybody likes -- i was going to say everybody likes to use social media.

Giving the consumer more free voice and what you make it a big deal.

How does it translate into big bucks?

We did over $100 million in revenue and we are growing every year.

A big part of it is a show -- social experience that modcloth is engaging in on facebook and all of the external social networks that customers spend their time.

And how i described a few moments ago.

We take on this wonderful input we get from our customer on what she loves and translate that back into the supply chain during analytics and predictive models that help us make decisions on what products to produce.

The customers have this really direct influence over what merchandise gets made.

Using the data make better decisions.

It is also pretty cool, you clap source clothing -- clout source clothing directions.

I have not heard about that.

Tell me more.

In the community can submit design ideas.

We let the community vote on the top designs through our program.

The top designs we take into production.

We also take designs from the various designers we work with corporate production and put them up and from the community to vote.

We use their vote to help determine what we should produce.

And how much we should produce based on the level of interest.

With that -- we have had over one million comments.

Those comments help us decide what to produce and how to evolve those designs.

Changing colors or details.

We have had over 20 million votes across of the products we are launching their program.

It really helps us steer our decisions.

Speaking of evolution, what about the business it self when it comes to growth from here has worked what about partnerships with traditional retailers or the giants of e-commerce?

What you think about that?

We are really focused on developing the best possible e- commerce experience across all devices.

Mobile is a big focus for us now.

Everything we do, we are think about in a mobile first away.

What that experience is on our phones and tablets before we start focusing on the desktop experience.

We see that as a huge opportunity for growth for that to be more present in her life since she tends to have a phone more with her.

We are also focused on growing through better serving the full spectrum of sizes.

We have been bringing more of our products and the full-size special from extra small to 4x. the designers we have worked with have not been producing in 1x-4x. we are working with them to understand the fitting needs of our consumers.

This is a husband and wife this list which you started -- this is what you started with your wife.

Any suggestions for spouses that are looking to go to business together?

Susan i started modcloth when were 18 and 17 respectively.

It is almost always ever known.

And works well with us since jeff clement three skill sets.

Knowing that clear division at west final say on what is critical.

It is the key to success for any partnership especially when you are working with your wife.

Some good advice.

Eric koger, ceo of modcloth . some breaking news.

Microsoft.

Microsoft is being pressed the closely fought you -- followed company that has a big stake.

Valueact is pressing them for a seat on the board.

Microsoft is considering giving in.

They want them to stop focusing on consumer and more on business software where they have been stronger.

Will send the struggles with the candle and selling consumer -- kindle and selling consumer products.

Check us out of your ipad and your phone and at bloomberg.com area have a good weekend.

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

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