Live from pier 3 from san francisco, welcome to the early edition of "bloomberg west." we cover the global media and technology 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.
Twitter's executive team is meeting with bankers in new york to make reparations for its roadshow set to kick off on monday -- preparations for its roadshow on monday.
Samsung reports record earnings on rising sales of its lower- priced smart phones and tablets.
The gain comes at apple's loss in many markets.
Dish network is taking its next step into offering wireless service.
If the company ready to put their ways use for more than satellite-tv?
Twitter is getting ready for its roadshow.
Executives will tell investors why they should invest in the company.
The twitter ceo and cfo are in new york, meeting bankers who will help lead the ipo to practice for their presentation.
Footer's roadshow will start with meetings in the washington, d.c. area -- twitter's roadshow will start with meetings in the washington, d.c. area.
We are getting a peek at the twitter roadshow video.
Take a listen.
We started twitter as a simple idea because we loved it.
We cap building it because we wanted to see other -- kept building it because he wanted to see other people love it -- we wanted to see other people love it.
I honestly never thought it would go this way, and that is part of the reason why we have succeeded.
And an updated ipo filing, twitter says it will offer 70 million shares at $17 to $20 apiece.
Jon is joining me in l.a. what do you think of the presentation materials you have seen so far?
What i love about tracking this twitter roadshow is that one of the best places to track what is going on is on twitter.
When the executives arrived at morgan stanley, a morgan stanley employee was the one who tweeted out that this twitter ceo and cfo had arrived.
This is a day that is very much about getting the sales teams at work on this ipo all up to speed on what to do and what to be doing over the next few days.
Next week is when the roadshow really gets going.
There is a washington stop, a new york stop.
They move west, and the hope is to return for a november 6 pricing.
Even the map around the country of where they are going looks similar to what we saw with facebook ahead of its ipo, as they try to cover as much ground in a quick amount of time.
We are expecting the first day of trading to be november 7. what are the big questions?
You are already getting a sense from this video of what they are anticipating to get.
The company is not profitable right now.
The cfo suggesting that the profit margins could climb to 30% to 40%. he did not provide much of a timeframe around that.
You can expect there might be follow-up questions to that.
I did speak this morning with one investor who will be at one of the roadshows and said, what's the most important thing for you?
This person said, how much time people spend on twitter each day.
People who are investors in facebook are curious about that.
We know that dick costolo talk about how twitter has 230 million users.
There is this interest in whether people are taking a peek at twitter, staying there for longer stretches.
It was interesting to see dick costolo use the example of carl icahn tweeting about his apple stake.
The people who go to these roadshows will know about carl icahn.
Carl icahn as opposed to justin bieber.
[laughter] for more on twitter's pricing and roadshow, i want to bring a senior analyst at pivotal research group.
He covers companies that make money from advertising.
He joins us on the phone from portland.
How convincing is it?
If you believe, it is convincing.
The major thing investors have to get over is that this is not a proven business model.
If you trust in the management, you get very comfortable with it.
What do you think of the price range?
That would value twitter at 10 $.9 billion, lower than some valuations we heard out there -- $10.9 billion lower than some valuations we heard out there.
We had the same problem with facebook.
Most people were off by 200 million shares in their estimates it is coming in at probably $12 billion, $13 billion.
It is probably a conservative price.
We know the average revenue per user is less than 50%. there are different sized businesses.
How do the numbers stack up to you?
The numbers look good for a company at its stage.
They have done really well.
-- well, operationally.
Users are not that important at the current scale.
A lot of investors will ultimately be focusing on the revenue growth.
They just need the beat on the street to generate this kind of revenue growth.
Are you saying users are not important right now because twitter has a lot more potential to get a lot more users?
they are big enough.
They could never grow their user base, and they would be fine as a business.
They're never going to be facebook.
It's almost impossible to imagine how they could be facebook.
They are a niche product.
At the roadshow, they have to explain to investors what exactly twitter is here it.
The vast majority of institutional investors have never looked at twitter and probably never will.
You think it could be interesting to see how the institutional versus retail investors breakdown.
Why is that?
It will say something about where the company wants to be.
There may be a retail investor that is paying more for the dream.
Institutional investors probably looking at metrics.
A retail investor is probably more familiar than the product than an institutional investor.
He will face me about where the company wants to go and how it wants to be -- it will say where the company wants to go and how it wants to be.
It sounds like you do believe that from a business perspective.
It's entirely possible they could have 100 million monthly checking out twitter.
It's never going to be as ubiquitous as something like facebook.
It is about the advertising opportunity.
They have not even started to generate ad revenues in most countries around the world.
They are at a state where when they negotiate with large advertisers, they say 94 of the top 100 advertisers are working with them here.
Their goal is to get the numbers up to 250, 500, then a million.
Brian wieser, thank you for weighing in today on "bloomberg west." customers in emerging markets are going gaga for the samsung galaxy phones.
You can watch a streaming on your tablet, your phone, and at bloomberg.com.
? the south korean smart phone maker samsung reported record third-quarter innings.
Net income rising.
The company's surging profits come from its success with lower and consumers and demand for the processors that samsung manufactures.
Apple is making a big push into emerging markets today.
The iphone 5s and 5c are going on sale in new countries, including russia and india.
I bring in adams atari.
They are fierce competitors in the marketplace.
They are suing each other in court.
They have a beneficial business relationship where apple buys loads of chips from them.
You wonder how much of an advantage samsung has because he uses its own chips.
Samsung is vertically integrated.
They control the whole aspect of making a device.
All these different things are able to squeeze a more economical model and really squeeze out profits.
Has apple considered making its own chips?
They design the chip in cupertino, then work with suppliers like what has been samsung to manufacture for them.
Will they consider doing the manufacturing themselves?
I don't think so.
That's a huge endeavor to do that.
You are talking about billion- dollar facilities that have to be built.
Apple has shown that they prefer to hire other companies like foxconn to assemble them or samsung to make the chips.
We know the new iphones have been on sale in china for a few weeks now.
How are they doing?
Apple put out the numbers showing they sold 9 million initially.
They report results on monday, which will give us a better sense of how that initial rush was.
The big thing that people should be waiting for is not going to come until january, when they report the results from how the holiday quarter went.
What about these other countries?
How much are they going to matter to apple?
Apple has shown that they are not going to compete at the low end.
You mentioned russia.
There are iphone cost is equivalent of $800 -- their iphone cost is an equivalent of $800, a monthly salary.
Samsung also seems to be moving faster than apple when it comes to new devices.
They recently got a patent for glasses.
Are they just trying to beat apple to the punch, or is apple behind?
That might be part of it.
I would be waiting to see how sales of these watches go so far.
Some of the reviews were very mixed.
It remains to be seen whether or not there is a real moneymaker for them.
Apple has been reported as working on that area as well.
I'm still waiting to see a company that really turns that into a billion-dollar business.
Adams atari on oh -- adam satariano, thank you.
Microsoft's latest earnings prove the critics wrong.
Jon erlichman is back with that story.
A surprise attack for microsoft.
They're dealing with a lot of questions right now.
There are two stories with microsoft.
Here is a company trying to position itself for the future , and now looking for a new ceo.
Microsoft can always take a sigh of relief.
The story presented last night suggested that is the case.
Microsoft had the numbers to back it up.
The business is bringing in windows revenue, office revenue, those exceeded estimates.
The outlook was encouraging.
As the company try to explain it , even the consumer side is a bit of a challenge right now.
On the business side, it is getting long term commitments from businesses on a range of stuff whether it is office or server products.
The microsoft cfo said the company is set up for a terrific holiday season.
We are hearing that holiday sales in general will be weaker.
What's the argument here for microsoft?
Touching on three areas, one of them being all those new devices that will hit the market that are fueled by windows.
We saw him out with its first tablet.
Microsoft has its own tablet.
And then the launch of the new xbox.
In the case of the xbox users, it is a loyal base.
You get the sense that pricing is really going to matter for microsoft, bringing down the pricing on products like the service devices.
Jon erlichman our senior west coast correspondent.
Research is targeting a chinese company.
You can watch a streaming on your tablet, phone, and at bloomberg.com.
? we have breaking news to tell you.
7.5 magnitude earthquake east of tokyo.
The u.s. geological service is saying a magnitude quake of 7.5 and a tsunami advisory has been issued for a part of japan.
We are continuing to monitor headlines about this.
According to the pacific tsunami warning center, a 7.6 magnitude earthquake has hit about 300 miles east-northeast of tokyo.
Research firm muddy waters, known for its scathing reports on chinese companies, has a new target, n.q. mobile.
The company called the mobile security company a massive fraud and issued a strong cell on the share.
That sent the n.q. mobile stock plummeting.
Muddy waters founder and director of research stands by his stance.
He spoke with sara eisen and scarlet fu and gave his reaction to the call.
This is typical.
We have called a number of companies frogs.
Four -- frauds.
Four of them have been delisted.
Everyone comes out and says these allegations are untrue, you don't understand the business.
This is standard fraud lay book -- playbook.
How have you been collecting this information, and how along is it taking you to build this basis?
We worked on n.q. for about two months.
We did a lot of on the groundwork, trying to find physical presence of its customers, trying to find retailers that have phones with the apps preinstalled, surveying over 800 people in different parts of china to see whether they have this app on their phone.
We did a lot of analysis of government files regarding n.q. its largest customer, which we concluded is itself.
We did a lot of internet-based research and downloaded the app.
Computer engineers analyze the code of the app.
We try to make payments through their payment portal.
Referencing something n.q. made on it's called, it says that an executive who has been at samsung and citigroup and is now at n.q. -- you said he was not on the board.
He is indeed on the board.
No, that's the company trying to twist what we said.
We pointed out of all the china companies,, daschle marcon is not officer or director of any of those companies -- omar khan is not an officer or director of any of those companies.
We have tried to get what his geographical responsibility at the company is.
What the company said it is not a reputation of the fact, although they certainly spun it that way.
That was muddy waters founder and director of research, carson block with sara eisen and scarlet fu.
N.q. mobile has said it will form an independent special committee to investigate allegations made by muddy waters.
I want to get back to that breaking news.
7.6 magnitude quake has hit 300 11 miles east-northeast of tokyo.
A tsunami advisory has been issued.
-- issued for the fukushima area.
Magnitude quake has hit 300 miles east-northeast of tokyo.
More on that after this quick break.
? this is the early edition of "bloomberg west." i'm emily chang.
Rand paul is considering placing a hold on the nomination of janet yellen to leave the federal reserve.
A senate fight -- vote may be forced.
A similar bill already passed the house.
United continental holdings fined 1.1 million dollars for stranding passengers at chicago o'hare airport last july.
That is the largest fine since e-government rules went into effect in 2010, which says planes must return to the gate if they are waiting on the tarmac for more than three hours.
Angela merkel and french president francois hollande want new shares on -- rules on sharing intelligence with the u.s.. the leaders say a new pact will ensure transparency.
Some officials in europe have called for a delay in trade talks between the u.s. and the eu.
The twitter ipo is not just important for its executives.
Investors and goldman sachs, winning it is a feather in the cap of the new york stock exchange.
Julie hyman is in new york to walk us through the process.
The nyse is doing interest for her soul this weekend.
How will that go -- a dress rehearsal this weekend.
How will that go?
Let's walk you through how an ipo works.
You have the bank involved.
Shopping out the shares, figuring out where the range should be.
We know it is $17 to $20 a share.
The biggest difference here is that at the nyse, all the order flows come in before the stock begins trading via computer, whether to a handheld computer that someone on the floor is holding or through a computerized system.
A person decides when to open the stock and at what price.
And then twitter begins trading once that process is completed and that decision is made.
The order volume could be high and overwhelm the system.
You could have excessive price volatility in the beginning moments of trading that could throw off the system as well, where you have drastic mismatches in prices.
It is very difficult to test everyone of the millions of scenarios that could happen on the first day of trading.
I talked to a finance professor in georgetown and he said it is very difficult to be entirely sure.
One of the other things he pointed out is it's not just important how much volume, it is the number of orders.
If you have one order for twitter shares for one million shares, it moves more smoothly through the system than if you have 100 orders of 100 shares or 10,000 orders of 100 shares.
The number of orders, even if they are small, is also important.
It's very important where you are pricing it, so you don't get that price volatility and mismatches in the initial moments of trading.
We have been talking about valuation.
Julie hyman, we will be watching to see how it goes this weekend.
Dish network is planning to offer fixed wireless broadband in trial markets in expansion of a partnership.
This could signal the satellite- tv provider's broader wireless plans.
Dish will begin selling the service in several virginia cities in early 2014. i want to bring in edmond lee, who covers media and technology for bloomberg news.
Why them as a strategic partner for dish?
They already have the structure.
They already have a customer base.
It's a good partnership that makes sense, and it allows the chairman to make use of the spectrum or potentially make use of more of the spectrum he already owns.
What does this reveal about their wireless expansion plan?
It's a good question.
Everyone is wondering what he plans to do with the spectrum he's already sitting on.
This is not necessarily his first choice, to offer fixed wireless broadband service.
He would rather do a mobile offering to customers across the country.
He's looking for other ways to make use of it.
This partnership allows them to offer broadband a way that cable companies already do.
This is one of the big holes in dish's products right now.
You can get video and internet.
With dish it is still primarily a video product.
Will this help them compete with other cable and telecom companies?
A little bit.
Some of the markets are rural areas that don't have cable infrastructure, don't have a lot of fixed line infrastructure.
It's a good way to offer for those folks.
In areas where they have cable broadband or broadband through their phone provider, it's going to be harder to compete with those guys.
Unless you're going to price it in a more cheap or competitive way, it's going to be a harder market for them to break into.
The biggest plans for wireless strategy is to try to offer a mobile smart phone service where you can offer both, internet and phone and your video all at once.
The people who are dish customers, what does this mean for their wireless?
What will change?
If you are already a dish customer and you are in those rural areas of virginia where they will start offering it, you could get your internet and video.
That certainly is more convenient for them.
For most dish customers, it's not going after the full lot of dish customers right now.
If it is a successful run in virginia, they may try to roll it out into other markets and have other offerings.
How does this relate to spectrum battle for dish has been fighting?
-- battles dish has been fighting?
They paid $2 billion plus for spectrum.
They want and need more to fully build it out.
If they're going to offer the mobile service, they need to find a partner or build infrastructure, which is really expensive.
They are lobbying the ftc like, we are waiting for you to auction off more spectrum, more airwaves.
They said, we will guarantee that we will police pay this much, $1.5 billion -- pay this much, $1.5 billion for the spectrum here.
I have to get a lot of approval from u.s. regulators of how much they want to use and how much they want to buy it for -- they have to get a lot of approval from u.s. regulators of how much they want to use and how much they want to buy it for.
Edmund lee, thanks so much.
? this is the early edition of "bloomberg west." i'm emily chang.
A small company takes open source maps and helps companies such as uber, foursquare and ever note use him for their own apps.
You have got the biggest tech companies in the world.
Had you set yourselves apart from them?
-- how do you say yourselves apart from them?
What separates us is how we use open source software and how we are working with open data communities.
We need a really good set of data.
You have a community of over a million people going out there.
I understand why the most interesting parts about your products is it is customizable.
Different apps can do different things with a map.
Give me an example.
Brand really matters, especially on the app.
Being able to change the color of the map.
Being able to control the entire brand experience.
It is like an exercise app.
You take out the freeways, you just have the hiking trails.
The maps on apps are such a core feature.
You have to be able to control all those details.
You charge $.50 per impression.
Google can afford to supplement its maps a different way.
How do you plan to make money?
Google does subsidize their maps.
Any big player has to have maps.
25% of their search business is local.
The monetization they're doing right now, they're trying to figure out ways to reduce the cost.
Spending over $1 billion a year, that's a lot of money.
How many impressions do you get from uber on a particular day?
Hundreds of millions of impressions across our different subscribers.
We have over 2500 paid subscribers.
Start tweaking the colors of the map, hit save.
"usa today" used your maps on election night.
Tell us about that.
I was 20 million people looking at the map in real time -- that was 20 million people looking at the map in real time.
This is real data coming in showing where the results are.
For us, it was a huge win.
"new yroork times" was down for 15 minutes.
Our maps were just cranking.
You guys have been funding yourselves until now.
You're making $10 from the foundry?
Foundry invested last week in us.
It's our first time taking outside capital.
You work for an ngo -- worked for an ngo.
We were there helping ngo's in d.c. in afghanistan, during the election, doing map work.
When you're working with ngo's and data, a lot of that requires having a better map.
The traditional players in maps were focusing on desktop.
What are you using the money for?
This is about team growth.
We're going to have the best tech by continuing to have the best engineers.
So it is for talent.
What is the talent pool for engineers like in d.c.? we have 30 people in d.c. interesting.
We will be watching you guys.
Thanks for joining us.
The obama administration says the problems with healthcare.gov will be fixed by december.
They need new engineers.
Should it take that long?
? this is "bloomberg west," live on bloomberg television, streaming on your tablet, your phone, and at bloomberg.com.
I'm emily chang.
Think of it as the google in china.
In a rare interview, i sat down with the ceo of baidu.
I asked him why he decided to start baidu in china.
I could have started something here.
I realized it is probably better to be close to the market you want to serve.
That turned out to be the most important decision i made for the company because the chinese internet market was very different from the u.s. internet market.
For more on my exclusive interview, be sure to catch "bloomberg west" all next week.
To the technical problems that have plagued healthcare.gov.
The obama administration says the site will be fixed by december.
It is the first time the administration has given a timeline for the exchange to be operational.
Megan hughes joins us now.
Who is making this promise?
This is coming from the management consultant as part of the tech surge.
He spoke on a conference call with the centers of medicare and medicaid services, the agency in charge of the rollout.
He said that by the end of november, the site will operate well for the vast majority of users and be fixed in time for people to sign up in december to be covered by january 1. we are confident that each week the site will get better, and by the end of november, healthcare.gov will operate smoothly for the vast majority of users.
A little bit about zients, he is soon to be the white house's top economic advisor.
He is presently a health-care entrepreneur.
He has a lot of private sector management experience.
That is who the president assigned to deal with all of this mess last week.
Today was the first time we had heard from him.
What else could he tell you about the project?
Is cms ultimately still in charge of coordinating this?
Zients said a new general contactor -- contractor has been assigned to oversee the website and be in charge of overseeing the entire operation.
The company he named is owned by optima, a unit of united health.
It was previously responsible for gathering data from agencies such as the irs.
It has also been in charge of the registration part of the site, which had problems early on.
The company also did testing around this site.
It earned $155 million in contracts related to the health care law, but no one on today's call would say exactly how much the company would make in this role as general contractor or how much would be spent or how many people are working on the tech surge.
Megan hughes, thanks so much for that.
More of "bloomberg west" in just a moment.
? welcome back.
I'm emily chang.
Coming up on the late edition of "bloomberg west," linkedin is making big changes to its mobile efforts.
We will find out more about the new features that linkedin is launching.
Bloomberg tv is on the markets.
Julie hyman is in new york.
What are you watching?
The markets overall.
We are not seeing a lot of change with the major averages.
The nasdaq has been leading because of better than estimated numbers coming out of microsoft as well as amazon.
Elsewhere, earnings are mixed.
I have been watching a stock that i know you have been watching, and q mobile.
We have been watching the company -- n.q. mobile after it was targeted by muddy waters.
Shares have been halted.
They have now resumed trading.
It looks like they are falling once again.
They're bouncing up once again.
The company came out with an extensive denial of muddy waters' allegations earlier today.
Something to keep an eye on.
We will keep updating you on it as the shares continue to trade.
Zynga shares are surging.
The maker of "farmville" reported a smaller than estimated loss in its first quarter.
You cannot talk about zynga without talking about facebook.
Shares are up almost 100% this year.
Bullish bets are at an all-time high.
For more, i want to bring in a bloomberg stocks reporter.
You have seen this happen with a couple of these tech stocks, apple as well as facebook.
Sentiment has changed enormously over the past several months.
It is an amazing round trip
This text has been automatically generated. It may not be 100% accurate.