Samsung Faces Import Ban: Bloomberg West (10/08)

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Oct. 8 (Bloomberg) -- Full episode of "Bloomberg West." Guests: Salesforce CEO Marc Benioff, SGN CEO Chris DeWolfe and Max Chafkin. (Source: Bloomberg)

Welcome to the yearly edition of bloomberg west.

Our focus is on innovation, technology, and the future of is this your samsung -- future business.

Samsung fails to get an import reprieve that is set to go into effect at midnight tonight.

Why did president obama not cut them the same break as apple?

Investment in san francisco schools, microsoft one-on-one in your view, how tax can help education in what could be next for sales court -- for salesforce.

Will the fast rolling international expansion make apple a dominant in streaming radio as the itunes store is for buying music?

We will get to all of the stories in just a moment.

First, the latest from washington.

We expect to hear from president obama in the next hour.

But there are still no sign to the end of the shutdown.

What is the latest?

No more than 45 minutes after speaker john boehner had a press conference in for an obama administration to come to the table, president brock obama picked up the phone, called the speaker and said no thanks.

That is according to speaker boehner's aides.

Both sides firmly entrenched, no direct that way forward.

We have the house making moves toward creating a committee to bring bipartisan negotiators to go to start working toward a deal on the spending bill.

Democrats already say that it's a nonstarter.

So looks that we will fish the day the same way we started, with no further along the path.

What does president obama say at his 2:00 p.m. conference is the big question.

Will continue to keep you up it'd right here on bloomberg television about what is going on in washington throughout the day.

Back to samsung, samsung has failed to convince president obama to overturn an import ban on certain samsung devices.

That means a company must stop importing some older smartphone tablets that happened to infringe on to apple -- on two apple tablets.

Samson said that it should be overturned on policy grounds since obama overruled the band for apple.

How much could this hurt samsung?

To some extent, comparing this to the apple situation is like comparing apples to oranges.

In some ways.

It is important to look at what samsung has done with their smart phone business and how they have grown to be one of the largest businesses in the history of mankind.

This is not hyperbole.

It is an enormous business.

They have seen tremendous gains built into these devices that they invented.

What apple says, wait, you didn't just invent these devices.

You stole some stuff here in so did they build this business and sells or was it built over time -- business themselves or was it built over time?

What president obama had to do in making this decision was look at the history of this patent battle and made -- and look at what made this case different.

He didn't say anything last night after midnight.

His traitor presented it did.

"-- but his trade representative did.

That was their decision in the statement about this.

But the context is what everyone is talking about, the similarity of the sounds and the service- level similarity in the cases.

That was president obama's tough patent call.

Yes, he vetoed an apple product dan very much in support of some older products and wanted to be carefully watching this upcoming case against samsung.

So last night, defining to be towed the samsung product van looks like he is playing hometown favorites.

That is what i was then asked him why not cut samsung the same break?

Is it simply because they are not an american company?

They are a very different cases.

Fundamentally, the apple versus samsung cases very different from the samsung versus apple case.

The apple versus samsung case, these are the patents that apple wanted to use and lost the case over.

These are standard and central patents of which there are thousands.

It is akin to breathing oxygen.

And it requires the law that there is a fair and reasonable and nondiscriminatory way of licensing.

These are standard 3-d technology wireless technologies of which there are thousands in every patent.

The apple patent were very different.

They are nonessential patents.

There is no requirement for apple to license them under the law unlike samsung.

There are very specific things that apple invented.

The headphone jack that can tell when you unplug it and turns off your music, that is something that apple engineers came up with.

They are nonessential to the usage of cell phones and they don't have to license those if they don't want.

They can determine whatever rights they want for that.

And future samsung devices were designed around those patents.

What happens now?

There are several of these cases open run the world.

Again, this is a really big is this for samsung.

They took and probably $20 billion last year alone.

When you look at the size of that business, samsung will fight tooth and nail to protect that on the low-end as well as the high end.

So it will try to go back to the itc and say that the president was wrong and the case itself was wrong and try to appeal that.

They are running out of chances.

The patent also has some serious american locations, especially since president obama did recently overturn a ban on apple products.

Making use joint -- megan hughes, what is the deal here?

We have been talking a lot about this samsung winning a case against apple and the president vetoing.

That was the first veto since the reagan administration.

That was a big decision.

The south korean government immediately weighed in and said that the government should -- said that the government blocking competitors is protectionism.

Frohman said in an interview, before the decision came out, that he made clear to the company and the south korean government that these decisions had nothing to do with nationality, that they are policy judgments.

As cory was pointing out, these were very different cases.

That is the u.s. government perspective.

Any sense that the shutdown had an impact on this decision at all?

A lot of times commit would be relief online, but the website for the ustr has been shut down.

It hasn't been updated since october 1. instead, it was released by e- mail.

It came from one of the press officers.

But it still coming out -- but it still did come out on time.

The ban will not be a top priority over customs, which has a large number of furloughs . so it is in samsung's best interest to follow the rules.

He is known for building one of silicon valley's hottest companies, but also for his philanthropic efforts.

Up next, part one of my exclusive interview with mark benioff.

Salesforce ceo terry benioff -- mark benioff provided a donation to public schools, the biggest one time donation in the school district history aimed at improving science and technology education.

But $1.5 million of it will be used to improve tech at the schools, including buying tablets for students.

Each of the cds 12 middle schools -- each of the city's $12 million will get money to spend on high need areas at their specific schools.

I spoke with him about this gift in an exclusive one-on-one interview.

We had a huge commitment to san francisco unified school district and we want to make them the best schools right here in the country.

We certainly deserve them.

We have all of this amazing wealth creation and new technology being created in seven cisco, great companies in san francisco.

We need to give back to seven cisco.

A phenomenal place to give back is here in the schools.

I understand they came to you asking tried pads.

You said inc.

Your.

-- you said think bigger.

Here's some money and some ipads, too.

Just putting a computer in schools is not enough.

Technology is never the answer.

But as -- but is part of the answer.

They need money to be able to do what they need to do to make the technology work.

They also need people.

We have thousands of employees here in san francisco and we asked them all to do at least four hours in volunteer is him -- in volunteerism.

And we give them time paid off.

It is a catalyst to get more resource into schools.

$2.7 million is the biggest donation in the districts history.

How do you want them to spend this money?

I want them to spend the money to figure out what the next $2.7 million needs to be.

We need to come in with bigger resources and more gifts and more capabilities and the principles, the mayor, the superintendent need to articulate a long-term plan where they can show us the right philanthropic targets.

The kids and seven cisco need more.

Any better health care.

I need better education.

We have to get them off the streets and into shelters.

This is an important time in san francisco it is a great time for our industry and we need to be giving back to help the kids.

I am a new parent and i have been thinking a lot about the school system.

We have some of the smartest and most talented and richest people in the world in the bay area.

Why aren't the schools better?

Why is there such a disconnect between the tech committee and the school system?

In all cases, there is a history in our industry that we haven't been especially philanthropic.

But that is changing.

You look at the new generation of entrepreneurs and you see all kinds of philanthropic gifts that are happening and we just need to let those entrepreneurs know that they can give their money right here in seven cisco.

Let's would have zynga on lowered and auto debt.

How do you get more companies on board?

We have evangelized a 1-1 model.

1% of their equity, 1% of their profit, number one percent of their employees time into a nonprofit.

At first, we had no equity in a profit in a time.

But now we have given away half a million hours of volunteerism so far.

We have given away $50 million in grants.

And we also run 20,000 nonprofits and ngos for free.

That is really the beginning for salesforce.

As you know, salesforce is 14 years old.

We are having a phenomenal run as a company.

But because we made that decision in the beginning that we would give back as we became more successful, we can do more in today's event -- we can do more and today is evidence of that.

Sure, some wealthy people give money, but how do you make for long-term improvements?

How do you scale what you are doing?

You can scale what you are doing and what everyone else is doing by giving more.

There is a lot of resources here did ask a lot of resources.

So you think it takes money.

It takes money, resources and people.

Do you think there is a difference between technorati and real people in separate cisco -- in san francisco?

I don't think so.

There are incredible people in our industry and they are doing phenomenal things.

They want to give and they want to support the schools, the hospitals, the homeless shelters . but we can't just create it on our own.

We needed to be a public-private partnership and we are lucky to have a great mayor that is giving us that support right now.

Talk about the google and facebook buses that take people and seven cisco torque.

And there is the argument that it creates a different kind of people.

But don't use public transport.

The prices where the buses pick up our higher.

What do you make of that?

Hypothetic -- i don't agree with that.

In san francisco, we are seeing the genesis of an incredible the city on this planet that is really getting elevated by the technology industry and a great city like london, great city like tokyo to my great city like new york and a great city like separate cisco.

-- like san francisco.

And uc san francisco becoming one of these resources.

That kind of metamorphosis or change is difficult.

How is a part of your strategy in terms of the linear business, philanthropy?

Define that in terms of attracting talent?

Yes come all of those things.

And we started the company, we said, yes, we wanted a new technology model, cloud computing.

We want a new business model, which was a subscription-based economy, not just a license on all.

And we wanted to be -- a license model.

And we wanted a nonprofit model.

So we do in these philanthropic events, that is part of what we want to do.

We have goals.

In the same way that we have goals to create cloud computing and be the leader in that industry, we have a goal to be in -- to be leaders in giving back.

That was part one of my exclusive interview with marc benioff.

Coming up, we talk about the business of salesforce and what to expect next from the company as well as rival oracle.

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

Welcome back.

When salesforce started in 19 99, cloud computing sounded like a pie-in-the-sky idea.

Fast-forward to today, smart phones and tablets are everywhere and software as a service is a new normal for new businesses.

That has transformed salesforce into one of the leaders in silicon valley.

In part two of my collusive interview with marc benioff, i asked him what we should expect that the companies upcoming conference?

Dream force will be 120,000 people in saffron cisco this year, november 18, 19th and 20th.

-- people in san francisco this year, november 18, 19th and 20th.

Green bay is playing.

We have a lot of surprises.

Sheryl sandberg is coming to do a keynote.

We even have some phenomenal speakers, like deepak chopra is coming and wayne dwyer.

We have a number -- we have an unbelievable agenda.

Is there one message this year?

There is, which is, behind every one of your apps, there is a customer.

We will show you why customer- manager relationship is more important than anything you have done before.

Salesforce has been growing phenomenally, 30% to 35%. you have managed the company for growth.

You have been asked this before.

The formula is working.

But how long do you think it will continue to work?

Our focus and our main focus -- and this has been very important -- and it has been working, which is growth.

That is the most important thing for us.

We will do everything necessary to grow and that is why you see even this year come in our last guidance call, we gave guidance over $4 billion in revenue this year, growing at 30%. you haven't seen a technology company growing at 30% in a while because of an inordinate focus on growth good.

Oracle group, emerald two percent.

I know you have a partnership now, but you still compete.

What are you guys doing better?

What are they doing wrong?

Oracle is very much a vestige of the past.

They are a company built on client/server computing.

The first am ever put computers in schools was in a public school in san francisco a few blocks from here in the bayview and i was with oracle.

Oracle is a phenomenal country -- a phenomenal company with a phenomenal leader.

He has taught me everything i know about running a company and growing one, but it is very much about the old software model.

The client/server technology model and the license server model and that is not what companies want today.

He is interested in any features through cloud computing.

They talk about it, but they haven't delivered it.

We deliver the best social computing, cloud computing and mobile computing in the world.

As evidenced by the conference they just had, they are rolling out new mainframe computers, which are great computers if you want to buy computers.

But that is not cut cloud computing either -- but that is not cloud computing either.

We need to go to the next generation of computing and that is the cloud and that is what we have.

I know you watched the america's cup.

There he skipped his keynote to watch the america's cup.

It's a huge passion of his bid what about -- that is a huge passion of his.

And about the criticism?

That adds mystique to him.

I think it was intentional and very smart of him.

We are talking about right now.

He got us to talk about larry ellison.

The america's cup was phenomenal pr for oracle, the best i've ever seen.

That was salesforce ceo marc benioff on an exclusive one-on- one interview.

Timeout from the markets and to look at what is happening in the markets every hour.

Julie hyman is in new york.

The shutdown is dragging on.

It is definitely getting to investors.

In the beginning of this, we saw them really shrugging off the shutdown, thinking it could only last a couple of days.

Now it has dragged on and on.

There is recent concern about what it means for the u.s. economy and for the debt ceiling negotiation.

More concern about a default.

We see that in the treasury markets.

We also see this all play out with technology in particular.

If you look at the overall markets, we see that the nasdaq is falling the most.

Internet stocks in particular are being hit today.

Yell, yahoo!, all tumbling today.

-- yelp, yahoo!, all telling today.

They are being more hard-hit i these concerns.

It is basically a suction of the macro worry in the market.

We will be back in 30 minutes worth more and you will get more bloomberg west after the break.

You can catch a satire later time at 6:00 p.m. eastern.

The faa will recall the inspectors who will be back on the job this week after initially being deemed nonessential.

Most of them will oversee major airline operations.

Others will keep an i on aircraft and parts.

Argentina president regina fernandez said kershner is under good spirits after removing a book on your her brain.

It is eight weeks after she fell and hit her head.

She is expected to miss campaigning for this month's election.

Heavy rains from a typhoon are pounding shanghai and nearby areas.

Schools and businesses were closed and shanghai and many roads were flooded creating a travel nightmare.

Dozens of flights have been delayed.

The storm also killed at least six people and caused damage to thousands of homes in a nearby province.

President obama is scheduled to take questions from the press in a little less than half an hour.

Phil mattingly is with us now from adding me.

Are we expecting any big announcements today?

What exactly is the president going to say?

If it is anything like his phone call with speaker john boehner earlier today, don't expect anything new.

The state of play today, now day eight of the shutdown, a little bit more than a week from the treasury secretaries deadline for the debt ceiling, it is really kind of the same place it has been for the last couple weeks.

Speaker john boehner today physically calling for negotiations and president barack obama both in his call with speaker boehner and officials reiterating they are not willing to come to the table.

They believe it is congress's job to pass a clean spending resolution and a clean increase of the debt ceiling.

Until that is done, they will not sit down and talk to . speaker boehner said earlier today that nothing is on the table and nothing is off to what is he up to?

Republicans will vote on a bipartisan to the -- bipartisan committee to start negotiating these ideas.

Basically, this is a play to make sure that the amerco people know that the house republicans are interested in negotiations -- make sure the american people know that the house republicans are interested in negotiations.

What the republicans are tying to do is to things.

One, they will keep lobbing over piecemeal bills and continue to underline the fact that they want to come to the table i want to have discussions.

Is the white house that refuses to negotiate.

Even though they have rough poll numbers, they think that will be a winning message for them.

Whether that ends up being the case, from the white house perspective, they don't think it is.

This is a question that everybody wants the answer to.

Nobody has answer, but i will ask it.

How does this all and?

-- how does this all end?

Does it?

People on both sides sure hope so.

But people in the back rooms are not talking to one another.

The big thing that remains confusing to everybody who works in washington right now is, usually at this point, we have a good idea the endgame.

We know the rhetoric is hot and they are any in their heads and faces against the wall.

But they are not talking right now and we don't know what the procedural gamesmanship will be over the next week to make this happen.

There is one ray of light that could have some potential can senate democrats have started working on a bill that will be a clean desk you increase.

It will have the first test vote late this week.

If, a big if i might they are able to get four or five senate republicans to come along with them, it could present an escape hatch for speaker boehner if we are at the 11th hour and there is no deal.

Still, speaker boehner is very dead set that there will be no clean debt ceiling increase unless -- that ceiling increase.

Thank you so much for that update.

Again, we are break -- we are waiting for a news conference with president obama at the top of the hour.

Apple is planning to broaden its radio reach.

Bloomberg news has learned that itunes radio will soon be available in mooring was speaking countries come including the u.k., canada and australia.

Jon erlichman has more in today's digital remix.

Apple beating pandora to the punch.

That is certainly the market reaction in the story today.

It seems like apple does have a progressive role for itunes radio.

You highlighted that u.k., canada and australia are on its target list heading into 2014. add to that, new zealand and the nordic region.

When itunes radio was unveiled in the u.s. last month, apple sure that the 11 million listeners had sampled music in the first five days.

We are equally waiting with the next update will be.

Many suggest that this is a similar role as what we saw with itunes more than a decade ago.

It was interesting that 80 kew, the executive who has been leading the charge for apple, was recently -- that eddie q, the executive who has been leading the charge for apple, was recently quoted.

What does it mean for a service like pandora?

Other than the market, how does this affect pandora?

I think there are two parts to the story.

If we are talking about the global side, one analyst highlights the difference in the deal structures.

The fact that apple cuts deals directly with the music labels and to the lead up to the launch of itunes radio here was likely in a position where they could weekly do a rollout in other countries.

It is a different format to what pandora's doing.

That isn't to say that pandora is not in some of the countries that we have mentioned, but there is a bigger footprint opportunity for apple overseas.

He makes the argument that itunes radio may have a "uphill battle here in the u.s." because of the fact that somebody people have already been using the pandora service for some time and apple here at home has to make the case that here's 1, 2, 3, for reasons why he should use us and not pandora.

So those are the two stories, the overseas story versus the ones playing out here at home.

Thanks so much.

The maker of the popular candy crushed saw the game recently filed for a public offering.

That is next on bloomberg west.

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

Will come back.

Cain, the maker of the candy crushed game, can it prove that it is not the next zynga?

Chris is the cofounder and former ceo of myspace.

Great to have you back on the show.

This is a hit-driven business.

Candy crushes obviously -- the popularity is at an all-time high.

So it's time to go public.

But how does king avoid the fate of zynga?

King did a lot of things a right way.

For example, they didn't just finished -- did not just focus on facebook.

They focused on all the different platforms.

Everyone is moving to mobile, whether it is iphone, ipad or any of the android devices.

And the number of game players has gone from 40 million to 140 million in the last eight or nine years.

So they are differently going in the right direction of the current.

But is at the history of the business?

If can decline declines -- if candy crushed declines in popularity, but they have nothing compared to this.

Candy crushes one of those two or three games that has entered the popular culture, no doubt about it.

But instead of making money on one platform and mccain money on three or four different platforms and if you -- and as you so rightly mentioned, there are three or four games that are big in their own right.

Your time to get around the hit-driven formula and create a new formula that takes the uncertainty out of the game.

What does that formula involved?

Is that really possible?

We have only a few minutes here, but, ok, so the greenlight process, we make sure that we are very focused.

We do super high-end [indiscernible] we cross promote very well.

So you don't have to spend as much money on marketing.

We build games that we know can be evergreen.

Don't everyone bill just doesn't everyone create games?

Like that they should.

What makes a game evergreen?

A game that you can continue to add contact two.

So add levels.

Cracks if you look -- if you look at a board game, monopoly, you cannot play forever.

So we look at for those types of games coming games that have a proven game mechanic.

The interesting thing about the gaming industry, you can continue to tinker with it.

You look at your metrics everyday and find the script of measures for those increased metrics and increase the value of those games are in.

, knees it -- how many resumes are you getting from zynga?

We are getting a lot and many from the bay area.

Crushed the you have hired a lot of people from zynga, right?

Yes.

But there is plenty of other talent around, too.

Do think that zynga can recover -- can recover?

Crexendo no.

It is much easier to build a culture than it is i don't know.

It is a lot easier to build a culture rather than turn one around.

I do not know him and he seems like a great guy and a really bright guy, possibly the right guy for the job.

But a really difficult job at that.

What direction do they need to turn in?

Chrysler need to get a lot smaller and resolve their problems from the technology respective than from adding one employee's perspective.

What i said before about cross- platform development, what i mean by that is come instead of having one team build the same game for a spoke, another team though the exact same game for ios and another team for android, you have one team build it once and then you have technology that allows you to quickly put those games out and make money in five places instead of one.

What does it mean for you guys?

Are you working on an ipo?

We are not necessarily working on an ipo.

We are excited that the hangover is finally ended here.

Super cell raised money at a very high valuation.

We are fortunate that we have been profitable and juggling are revenues every year to.

We are having a great year.

We don't need to raise money.

We are growing internally.

We are running our own race.

We love the positive momentum and the positive message that king is bringing to the industry through this announcement.

The gaming and history hangover is over or the zynga hangover is over?

For zynga.

We will be back in just a moment.

We turn now to vanity fair's annual power list of the top 50 leading innovators who are shaking the foundations of their industries.

This year, many tech ceos are on top of the list.

Joining us now is someone who helped put the list together and you helped for the last three years.

Thank you so much for being here.

Jim cook and johnny on were number one this year.

What are some of the surprises on this year's list?

Ask everyone was surprised by "the washington post." if you are back six months ago and said what industry will silicon valley be talking about, you would not have thought the newspaper industry.

But suddenly the newspaper industry looks pretty good and it's because basisbesos has commanded so much respect from everyone.

Even if you step back from "the post," amazon has done so well dominating in so many industries and just encroaching on everybody us as territory that it is looking very formidable.

And he's coming out with a book on jeff basis, -- on jeff bezos, so you have to read it.

After three years of putting this thing together, what do you see are the big changes in trends?

The reason why technology is so high on the list is because it's so influential.

If you look at who are the most powerful people, the most in for initial and you wonder what influences our culture right now and it is technology.

It is twitter and facebook and apple and amazon.

That is the reason that tec has dominated so much.

What is the process of putting this list together?

Is there a lot of debate?

Do you fight over the rankings?do you fight for your people ? we ask as many people as we can.

We tried to interview -- we cast a wider net than ends up going on the list.

We interview 30% were people.

Who are the people you're talking to?

Crises are the people who didn't quite win the honor.

We talked to insiders, venture capitalist, anyone we can find and ask them who do they musters back, who do they think is most influential and then we talk, just like anything else.

There is no secret of her them.

So the top women on the list come in at 14 and 15, sheryl sandberg emerson meyer.

Why are they higher up?

-- and marissa mayer.

Why are they not hire up?

I don't think it rises to this -- to the level of something like apple.

Sheryl sandberg, the book has done really well.

She has engineered an amazing turnaround at facebook.

But she is not the ceo, so the list -- but she started a movement with her book.

Obviously, she has vaulted 20 spots on our list a sickly because of the book.

And also because -- on our list a sickly because of the book.

Is anybody ever say -- on our list basically because of the bug.

Is anybody ever say, why am i not hire?

The power of the d list, we should talk about that as well.

When you look at what jay-z is doing, not just in music, he managed to have a platinum record before it even came out because of his deal with samsung.

You look at what he is doing and sports.

That is amazing.

Beyonce had a tour coming out, now the man a documentary.

They are doing so much in so many different feels that it is kind of remarkable . thank you so much for telling us how it comes together.

Write back after this quick break.

Google unveiled a new chrome notebook today in new york city.

It was made by hewlett-packard and is called the ht chrome book 11. it weighs less than 2.5 pounds and has a price tag of $279. you can charge it with a micro usb, the same charger as android and smartphone devices.

The really interesting thing about the new hp chrome book is that we work close with them to have it more affordable and have a really nice computer for $279. the chrome book 11 goes on sale today at googles play store and at select retailers.

Coming up on the late edition of bloomberg west, electrical failures are destroying thousands of dollars of machinery at the nsa data center under construction in utah.

How can this impact the amount of information that the agency is able to monitor?

We will have that on the late show.

It's time now for on the markets . julie hyman is in new york.

Let's get straight to stocks and seek where they are trading.

We continue to see declines.

For the first time today, we see much more concern over the ratcheting up concern for the government shutdown and what it means for the dead -- 20 debt negotiations.

I want to bring in our guest to talk more about it.

He is joining us here, chairman of crystal wealth advisors.

Thank you for coming in.

We have seen technology really get hit in particular.

Internet stocks are getting hit in particular.

What is going on as you see the landscape?

What has changed today?

It is unsettling, the imf announcement in china making comments, jack and making comments of congress.

It is just getting more and more intense.

You have the debt ceiling coming up next week.

And the runways getting awfully short.

Especially when you look at november 1. a large social security payment

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

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