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.
Apple wins a key victory and its patent battle with samsung at access national trade commission -- just like the ban against apple, this one is subject to presidential review.
President obama calls for changes to the patriot act.
He says americans need to have confidence in the government surveillance program.
Are his proposals are enough to british or the public?
And a bloomberg west exclusive.
Sparking major controversy . we get the company's side in the only interview with that waywhy your advisor.
But first, to the lead.
Less than an hour ago, the u.s. international trade commission ruled that samsung infringed on to apple patents.
President obama can overturn this decision.
Last we come he be towed a ban on certain apple products.
-- last week, he veotetoed a ban on certain apple products.
For more on how big this is, i'm joined by a patent attorney.
You were here when we got that verdict a long time ago.
You helped us break it down.
How big of a deal is this itc decision?
The idc decision , we have had two decisions.
When case was by apple and another by samsung.
In the cases, there are a whole host of products.
It is a large deal.
This is a large amount of older models.
But there are current models included.
There are some.
There have been some declared i the itc that has passed judgment.
The question is whether these are affected?
Will the be a diminution of the quality of these products?
That remains to be seen.
We are hearing it is a worse case of mario.
-- worse case scenario.
The idc is saying to stop at the borders.
That is a big deal.
It is a big deal for the rest of the industry.
This is between apple and samsung, but we can take a guess it won't be long before apple will be asserting patent cases against other people.
All the other players in the market -- what will the president do?
President obama weighed in last week.
The difference between these two cases are night and day.
Apples and origins.
The last case was regarding essential patents.
The interoperability of devices.
Critical to the standard.
You could not communicate with an apple phone or samsung phone.
In this case, it does not have those larger implications.
It deals more with features and the user interface.
Things whether a headphone jack and be removed and be aware that it has been removed.
It does not have the overarching concern.
The last veto was in favor of apple.
If he does not veto this, that is also in favor of apple.
It will not be long before there are currently cases where samsung is accused of infringing some patent.
Right now, we need careful explanation of the differences between these two cases.
A u.s. for present it will be going overseas and telling others to clean up their intellectual property rights.
He has to expand the difference between when he was an american company versus a non-american company.
You do not think the president will be to this?
-- will veto this?
I don't. what about the other case that this is an award that apple received?
A judge reduced by half.
What is going on there?
This case is potentially bigger than the itc case.
Every intellectual attorney was watching this.
It was defined by a california jury that it was 26 products that they in french.
Can samsung sell these products?
The district court said you couldn't continue to sell these -- you can continue to sell these products.
It strikes at the grand bargain of the patent law.
In exchange for an inventors ideas, you will condemn the right to exclude it?
There are many cases between apple and samsung going on around the world.
Is apple winning?
They are on a roll.
There is 18 patents found to be infringed.
They are certainly in the lead.
They are posturing to gain ago she asian ship.
At some point -- negotiationship.
At some point -- i'm glad we have you to help us keep score.
We can barely keep track.
There is so many.
Thank you for joining us today.
Even as apple won a patent victory, it could be losing in china.
A research firm have found apple shares was cut nearly in half in the second quarter.
Chinese suppliers -- my guess joins me now via skype from shanghai.
What is going on.
Why such a huge drop?
It is great to be here.
Apple might be beating samsung in the united states, but in china, they are losing heavily.
Market share fell almost 50% in china last year.
They are now the seventh biggest seller of smartphones in china behind domestic manufacturers like lenovo and samsung.
Apple is facing serious challenges in china.
Investors need to watch out.
Is it all about price?
Is it because they do not have a cheaper iphone and there are many other cheaper options out there?
I do not think it is about price.
At the high-end of the market or may harbor standpoint, they're not that much better than anything else in the marketplace.
A lot of the local domestic companies have been releasing really good smartphones at half the price.
The sector has become a commoditized market.
You have a company that has launched a smartphone that is selling like crazy.
It is a company that started two years ago and it is outselling apple in china.
The other problems for apple is that they have not signed up for deals.
It still only has eight apple stores in china.
That is a ridiculous number.
They have more apple stores in pittsburgh than in china.
It is kind of perplexing what apple's strategy and timing is right now.
It does not seem like they have much of a strategy.
Tim cook was there recently.
He has been there several times.
He has been trying to lock down a deal.
It hasn't happened yet.
What about the grand perception of apple in china?
Has apple lost its cool factor?
Apple is no longer the aspirational brand that everyone wanted.
We used interview consumers and they would buy 15 or 20 ipads a year to give out as gifts.
That is no longer happening.
It is not cool.
One of the other big problems is that they are not able to get into the distribution in certain cities.
If you take a look, apple consumers look to hong kong.
Their sales have dropped in the last quarter.
Why doesn't apple be open more stores in china?
Is it because of difficulties dealing with the government and bureaucracy?
I have no idea.
It is perplexing.
Other companies are able to open stores in the country.
We believe china could have 100 apple stores.
Tim cook says he wants to grow slowly and ensure quality and troll.
That does not make sense -- quality control.
That does not make sense right now.
You saw one company report great numbers.
What they are saying is to go out and buy samsung or even lenovo.
That is really ocular.
They like to have once inquired for one phone -- one sim card for one phone.
Apple needs to get better at localizing for the chinese consumer.
We will continue to watch this.
Thank you for joining us.
Dell may not even only struggling tech company trying to go private.
We check in on blackberry next.
You can watch us streaming on your phone, tablet, and on bloomberg.com.
? i'm emily chang.
This is "bloomberg west." president obama announced possible changes to the surveillance program this afternoon as an attempt to assure the public of its privacy.
We have my guest in washington to explain.
Tell us how this all unfolded.
The president was a little defensive in his press conference this afternoon at the white house before he heads to martha's vineyard.
He said it is not enough to have confidence that the surveillance programs are not being abuse, but americans need to have confidence as well.
He has realized over the last couple of months that he underestimated that a feedback there were appropriate checks and balances that americans would be ok with it.
The program is an important tool in our effort to disrupt terrorist plots.
It does not allow the government to listen to any phone calls without a warrant.
Given the scale of this program, i understand the concerns of those who would worry that it could be subject to abuse.
The president announced several steps that he is taking as part of an ongoing public dialogue over surveillance issues and national security and concerns.
They released the legal rationale for section 215 of the patriot act that deals with telephone records and the collections there.
He is working with congress to enhance protections in the patriot act.
He also brought up the idea of having the civil liberties advocate at the foreign intelligence surveillance board.
He also announced he would be forming an outside advisory board that can conduct a review on how we should be thinking about balancing national security and civil liberties.
Administration officials acknowledged and the president said the same thing that these steps will not answer all the questions that are out there, that is the beginning of a discussion.
It does come after a high- profile meeting that the president had yesterday when he met with the apple ceo, tim cook , and the at&t ceo.
Other representatives and leaders -- no word on whether this was a preview of the advisory board that he would be announcing.
On top of other meetings officials have had , they were all part of the campaign that the president lunch today.
There were remarks.
What did he have to say?
He was asked about the race between larry summers and janet yellin that is playing out on capitol hill.
He said that his choice for the fed chairman was as important as his pick for a life time supreme court employment.
He says both of them are outstanding candidates.
You try to defuse the idea that this was and is a two person contest.
He says there are for outstanding candidates he is considering.
Both larry summers and janet yellin are highly qualified candidates.
There are a other of couple candidates who are highly qualified as well.
I will make the decision in the fall.
Recently the president was defending larry summers.
He said it wasn't because summers had the inside track, but rather he worked hard and stands up for people who he respects and who have done a good job whether or not they have been nominated.
He is compared to susan rice.
That is interesting.
She was under heavy criticism.
The president defended her there and didn't go on to nominate her.
Ileana goldman in washington, thank you.
Blackberry shares closed at the highest level in a month.
Up nearly five percent.
This after reuters said the bug report is coming around to the idea of a private company to help fix the problem in the public eye.
We reached out to black area to find common.
Jon erlichman is in l.a. do you have interesting information coming from your sources.
Tell us about that.
It is no surprise that the stock would go up on newsnight this.
It is possible inside blackberry, they have talked about the idea going private.
If you are really thinking about going private, you would talk to professionals who specialize in taking companies private.
The private equities firm.
We made a lot of calls today.
A lot of the sources that do a lot of business with technology companies gave us the message that there hasn't been a lot of buzz in the private equity circle that black area is out there and ready to go private.
That is not to say they are not speaking to some people, but if the companies were to go private, that is not a small thing for them to do.
Expect them to have more commentary or buzz in important circles of those professionals.
This is something dell is doing right now potentially as well.
What would blackberry gain from going down that road?
Air is always this view that being out of the limelight can help you turn things around.
A lot of the times you see these transactions because a story is misunderstood.
In the case of our dairy, its stock was at a certain price and it is less today.
If you look at what is happening, the devices, they had to bring down prices on the z10. jon erlichman, thank you.
Well, it has got backers like opera and eric schmidt.
Waywire faced controversy.
That is coming up.
? this is "bloomberg west." i'm emily chang.
As social media company has grown rapidly since its launch back in 2009. it has around 1800 clients in countries around the world.
The growth is partly because the company's american rivals cannot compete.
My guest is with me now.
You're one of the biggest companies.
What makes you better than your u.s. rivals?
Thank you for inviting me, first of all.
I think it is the fact that the a local european company, we get that there are lots of countries . we are the number one company in latin america and brazil.
You help your clients get a more global view?
It is a more global view.
Give me an example.
If you look at some unlike adidas, they need to cover facebook -- if you look at some unlike adidas, they need to cover facebook.
How do you measure how well a company is doing on social media?
It is looking at how people interact with them and engage and customer service.
What is more and company -- what is more important for companies to use -- facebook or twitter?
Facebook is a primary channel and twitter should come second.
It needs to be both.
What is the next frontier in social media analytics?
What makes you guys so much more innovative and better than the rest?
The key problem that u.s. companies is there are a lot more costs.
A lot of our competitors would have 10 or 30 engineers.
We have 100 developers in our country that are based which is lower.
We can innovate at a more rapid pace.
It is innovation we would be bringing to the clients.
We would roll it out at a fast speed.
It is all about the product.
Facebook and twitter are both partners of yours.
You they give you certain information?
How does that relationship work?
We work with obloquy available in permission from the company.
We do not touch -- we work with publicly available information from the company.
We do not touch the users.
It was great to meet you.
We will be right back with more "bloomberg west." we will talk about a controversial video startup waywire.
? this is "bloomberg west," where our focus is on technology and the future of business.
I'm emily chang with your -- chang.
Waywire market major controversy this week.
The chairman -- waywire allows you to share videos with friends.
I spoke exclusively with the waywire board member earlier today.
I think waywire is a site where it allows people to congregate and socialize.
The dominant medium it uses is video.
When volker decided to start this company, he had a track video of harnessing social video.
What waywire does is realize that the future of the internet is in a multi media and in the collection and aggregation organization of that media and contextualizing video content for consumers at home.
A lot of people curate their own videos through existing social networks such as facebook and twitter and youtube.
What makes you think they would use this instead?
Those sites are all fantastic.
Those treasure trove's of videos out there , we make it easier to find those treasures , those videos that align with your interest.
People can create a youtube channel, but the interface of waywire allows you to basically show videos that is much more meaningful.
Right now i'm at an academic conference in d.c. a lot of professors study media and journalism.
The theme is the collapse of content.
There is data that is aggregated, but not necessarily differentiated.
The power of sites like pinter est and instagram allow individuals to hear rate.
That is what will make waywire successful as well.
There are high-profile founders and backers, including oprah winfrey and eric schmidt.
What do you say about them tried to take on u2? i wouldn't say their art -- trying to take on youtube?
I wouldn't say that they are trying to take on youtube.
You are limited to what is in the database.
Waywire takes videos from across youtube and the huffington post line -- waywire has been around for about a year.
It still has not released a product or a full-fledged service yet.
How is waywire really doing?
It is doing fantastically well.
The companies just over a year old.
It has been tricking its business from -- model.
Registered users has tripled from about 7500 to nearly 30,000 registered users.
And that is without doing any concerted effort to attract viewers.
It is doing well.
The reason there are so many high-profile investors believe in this is they believe in the idea and this vision for harnessing the power of multimedia to connect people in the social and dynamic way.
We know there has been a round of layoffs.
Officers in new york has been close.
Employees are working virtually.
We are hearing there could be more layoffs to come.
Can you clarify?
I just mentioned that they have fine tuned their business model a bit.
They were producing some original content instead of doing the curation.
When the decision was made to stop producing original content, there are were people who were offered jobs to curate and basically took a pass on that.
That is part of doing business.
What is happening in the start up space, any decision to jump into a start up, it is not for the faint of heart.
It requires a certain kind of worsen and mentality and work ethic.
I think waywire will continue to grow and adapt to this space and opportunities in the market.
A headline in "the new york post" employees are looking for does elsewhere and are expecting waywire to -- it seems not much more than gossip or a rumor to me.
What people should expect waywire to be a destination site for when you want to find videos that people of like mind and interest are producing and sharing and aggregating.
No more layoffs to come?
You know, i'm advising the company on a one-to-one basis.
I do not know every detail of the decisions being made.
I cannot speak about specifics.
I do not know the answer to that to be truthful.
The son who runs cnn was also on the advisory board, but recently resigned.
Why did that happen?
He was brought on because he had a certain voice within the millennial generation and has a certain perspective.
He was valuable to the cofounders.
They found that valuable for the duration of his tenure.
Did he resign?
Why did he resign?
It has been published that he resigned to avoid any kind of appearance of conflict of interest or anything like that.
i do want to talk about cory boo ker.
What is his day-to-day involvement in the company?
He co-developed the idea.
He is involved from time to time on the decisions made.
He is the mayor of newark and running a senate race.
His day-to-day has not been particularly nitty-gritty.
He does maintain his own wire.
If anyone wants to see his content, they can go to waywire and look at the videos he thinks are important to share.
You have been involved in politics and have worked on presidential campaigns.
Some have raised their eyebrows with this thing.
Why was booker given a say?
Because of his high profile?
What is your take on that?
I do not necessarily agree with that your terry's nation.
With him bringing on other investors, some people were concerned.
When business and politics intersect, there are questions raised.
But there need to be more leaders who have an entrepreneurial perspective.
We need more people in the business community to have a civic commitment.
There is no problem here.
That was the waywire board member.
You can catch the full interview on your phone, talbot, and on bloomberg.com.
Aol ceo has -- might take drastic moves.
That is next.
? welcome back.
I'm emily chang.
This is "bloomberg west." aol weighs whether to shut down or find partners.
Tim armstrong announced patch will be replaced.
The number of positions that could be eliminated is still being determined and could be in the hundreds.
Edmond, what can you tell us about these layouts?
Why are the closing so many divisions?
There are about 900 patches out there.
Hyper local media sites across the country.
It has been growing year to year.
It made about 35 million in sales last year.
It is doubled from the year before that.
The problem is a costs way more to operate.
$120 million or more to operate patch every year.
It is bleeding money.
Armstrong did an analysis of the 900 patches out there.
A third of them are often both.
A second third is on the way to be profitable.
The rest is bleeding cash.
How did he say the goal is to make patch profitable before the end of the year?
Is that even possible?
It seems like it is a dire situation.
If he had half of the patches working and profitable or will be profitable, you could probably keep that promise.
You have to wonder what made those patches work and the others not work.
It took several years to figure it out.
There are still open questions for which patches were working and why they did and why others didn't work and why.
It feels like he is dumping the ones that are simply not working . here are the profitable ones.
A lot of open questions.
Is this evidence that you cannot do local news on a need, grand scale?
Why don't they just close packed altogether?
Is there hope?
That is also what analyst suggested.
They can shut the whole thing down.
It's a personal venture in which he put his own money into.
I think he has some personal affection for the business.
I think he honestly believes it will have a chance to survive and grow and do well.
It is still an experiment of local news and how it will work whether it is online or newspapers.
It is all in turmoil.
We do not know what the best business would be for these things.
It might work out on a small- scale, but not the scale they were originally intended.
It does not look like it is great news for local news in general.
Edmund lee, thank you.
Now to amazon.
They plan to hire or than 5000 full-time workers for warehouses.
The head of a rival company says amazon's approach to explain the team out of generating jobs for retail.
Open sky is a social shopping service, a marketplace of sorts for small businesses.
The ceo joins us from new york.
Explain this logic.
It is great to be here.
Thank you for having me.
We should celebrate that 5000 people got jobs working at amazon warehouses.
As a country and an economy, we can do better than that.
Would would be better is i thousand small businesses hiring employees and building their dreams and being able to grow.
Amazon is a world's best vending machine.
For the small businesses out there, they get lost in that millions of skews that are on amazon.
When you are an emerging brand and you make something innovative, what is better for you is engaging and making that relationship with customers and building followers.
At the same time , competition is competition.
If amazon is doing well and hiring, nothing wrong with that.
It is fantastic.
People who need jobs will have jobs.
That is a good thing.
I know that you guys take this view of being a creative company when it comes to shopping experiences.
Give us the stats to back it up.
What is happening with your business?
Openguy is effectively -- opensky is where you get to set up a profile and get followers and engage them.
Our business is exciting.
Thousands of merchants are joining opensky every month.
The more followers they have, the more products they can sell.
It is a modern main street.
The opensky fe ed -- most people bought something.
Do it have percent of people visit any of the top 10 e- commerce sites about every month -- 2% of people visit any of the top 10 e-commerce sites about every month.
Let's talk about shopping on your phone.
Groupon had big numbers.
Half of their overall business now.
What about in the case of you guys?
Half of our uses is on mobile -- usage is on mobile and tablet.
Opensky is a feed like twitter or facebook or linkedin.
You can scroll your feet and discover from what your friends are liking -- feed and discover what your friends are liking.
One of the things important is 80% of our shoppers cross category shop.
That means they bite you the products one week and apparel and accessories the following -- they buy beauty products one week and apparel and accessories the following.
We know searching on your mobile device is awkward and hard to do.
But a feed is much more powerful and fun.
A lot of people talking about wearable devices.
Where do you fit into that?
Where does commerce fit into that?
I hate to be a naysayer, but i doubt it.
It will be a long time before people are buying from the global glass.
It is amazing what they are doing, i do not think it is a practical mainstream -- certainly not for a long time.
John caplan from opensky.
Emily, back to you.
First there was "cars" and then there was "planes." will it take off at the box office?
? welcome back.
I'm emily chang.
They had to answer to investors and figure out ways to generate cash.
One way to do that is advertising.
Adam as a look.
Facebook is rumored to be launching its own advertising platform.
You can buy ads that target different ages and genders and run what is equivalent to commercials.
Facebook is moving into bigger advertising is a big deal.
To be advertising attracts more advertising dollars than any other form of media.
It is estimated to do about $4 billion.
That is a number that some estimate will grow as high as $8 billion in the next few years.
You might remember the movie "the social network." there was an argument over how to monetize the site.
We do not know what it can be or will be.
Now the facebook is a public company, they are looking for more ways to monetize the site.
One of its main competitors, twitter, is moving into courting tv advertising dollars.
They're looking at how many people on facebook are logging on during prime time television hours.
That number is 100 million people.
Looking within that number and the key demographics, they also found that more than a third of facebook users are simultaneously watching tv during prime time.
It is unclear how facebook plans to integrate video advertising in the new feed.
If it is a new commercial that is interrupted, they will face a new kind of backlash.
They want to know how much content they need to resonate and work well in the facebook video advertising platform.
How much advertising can facebook user stand before they start to revolve?
That was adam.
It is time for the bwest byte, where we focus on one number that reveals a whole lot.
It is a friday byte.
What do you have for us today?
That is the budget for that disney film "planes"." if they look a little like the pixar "cars" this was made by the disney toon studio and not the folks at pixar.
They think these plot lines are working.
Why would disney make this a not pixar?
It was supposed to be a direct to dvd film.
They said, this is looking pretty good.
Dane cook's voice is in there.
"cars" cars pulled in a lot of money.
They might have a big summer weekend.
We will see.
Speaking of disney, you have news.
Our buddy has had much needed r&r. i say, what are you up to?
Give us an update.
They look pretty good together, don't they?
They do look good together.
Cory is in his element.
He is hanging out with people his own age.
[laughter] i expect a full report next week.
I did not say that.
Have a great weekend.
We will be back here on monday.
This text has been automatically generated. It may not be 100% accurate.