Twitter Preps for Road Show: Bloomberg West (10/25)

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Oct. 25 (Bloomberg) -- Full episode of "Bloomberg West." Guests: ZT Wealth Chief Economist Max Wolff, LinkedIn Senior Vice President Deep Nishar, TBG Digital CEO and Founder Simon Mansell and Baidu Co-Founder, Chairman and CEO Robin Li. (Source: Bloomberg)

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.

Tutors top executives are in new york meeting with bankers -- twitter's top executives are in new york meeting with bankers.

Instagram ads are coming next week.

We know what they will look like.

They will blend in with the feed.

The question now is will it work?

And shares of a firm have plunged more than 50%. some have called it a fraud.

We year from both sides.

First, to the lead.

The twitter roadshow begins on monday.

-- we hear from both sides.

First, to the lead.

The twitter roadshow begins on monday.

Goldman sachs is the lead underwriter.

It will practice the presentation.

We are getting a look at video video -- twitter will show.

Here is a sneak peak.

Incredible leveling of the playing field.

It gives you the ability to echo around the world instantly.

That content creation and sharing and the connection that we see every day around the world that we never would have seen before, that possibility and opportunity afforded by the platform are limitless.

The rocha will begin in the washington, d.c. area -- the roadshow will begin in the washington, d.c. area.

They will share -- sell shares.

I bring in jon erlichman from l.a. jon, what is the latest that we know about the plans?

This is the day that is wrapping up.

It was compared to what will happen over the next couple of weeks.

It is one of the easier days.

You deal with banks on your teams.

All of the banks and their sales force that will get the word out about the twitter story.

What will be coming, as you highlighted, or all of the stops all over the country.

They will go from new york and to chicago and l.a. and denver.

There will be a variety of questions.

There was a video that would've made available today.

There are two parts of the story.

One is the platform and how important it has become in terms of getting news out.

The costello -- dick costello is talking about how people are hearing about twitter through other outlets.

Tv and other media.

There is the financial story of where it could go.

It was suggested maybe the gross margin could get up to 70%. twitter is trying to set the roadmap for one profitability will come.

They are doing a lot of the spending now.

That will pay dividends down the road.

That is a little bit of a take away as we head into the week that starts next week.

What is the biggest question from investors going to be?

Will it be how much time people are spending on twitter?

I was asking investors who might end up attending the roadshow today.

That is the most important question to me.

How much time people spend on twitter.

This is someone who also invest in facebook.

You have to wonder if the crowd that will show up at the various roadshow meetings are facebook investors or were facebook investors and will compare how much time people spend on twitter versus facebook.

A lot of them are familiar with the way things played out with the facebook ipo.

That is one to watch out for.

That matters when it comes to how much time are how much opportunity people have to see ads.

I also want to bring into our special panel paul kedrosky, an early-stage venture investor and former equity analyst.

We also have max wolf.

He is new york -- he is in new york.

Paul, we begin with you.

How convincing was the roadshow presentation?

We are sort about a point where people will be convinced by this roadshow.

There is not a lot of new information.

It is lovely to see dick pull out the charm.

I do not think there is a lot of new information.

Insofar as anyone being convinced, it will come out in questions during the roadshow.

I really missed the roadshows for back in the day.

I used to be on the other side of this thing.

It was always hilarious tried to prepare an answer questions and give data will completely giving the impression that you do not want to -- max, what about you?

We heard from dick costello.

Is the story believable?

Do you buy it?

I think i do.

There is a little bit of finesse going on in the video.

We are used to seeing this brilliant visionary leader who had the inspirational idea residing in a single individual who are told will guide the company.

Twitter has some coming and going.

I do not have a single visionary . bringing the three guys together was an artful way of creating their own composite, single visionary.

What about the messaging?

What about the messaging you heard from everyone in the video?

One thing that really stood out -- there was a moment in that video, the less glossy video that they do -- dick costello uses an example of an interaction between someone on twitter and a brand.

They tailored one photo for one person.

They had that we are different.

We do something that is different from plain, old banner ads.

Coming from the facebook facebook has a lot of users.

I do not know what the story is, that they have a lot of users.

That could be interesting.

Twitter does not have the same number of users.

It is not about the total number of users, but what they can offer on this different scale and why brands like that.

That definitely stood out to me.

What are you expecting to be the schedule here?

We are expect in pricing to happen on november 6 and trading on november 7. is that the timing that you are seeing as well?


That sounds just about right.

I think all of us wish we had the horseshoes that he had two days before the stock begins trading.

He's clairvoyant or something.

What do you think about the price?

It is cheaper than some were expecting they valuation to be.

-- the evaluation to be.

Is it too low?

If it is too high, people think you are trying to screw over the hightail investors.

If it is too low -- it was a very conscious effort by their sophisticated team to price this thing fairly aggressively and not give the impression of being -- with investors.

You have a lot of open market orders.

This is the cheapest i will ever see in my lifetime.

I better get my order in now.

It will have consequences.

That is assuming the pricing will hold on.

Would you agree with that, max?

Is it unlikely that it would happen?

I think by design, this is the anti-facebook offering.

There will locked on the private share trading, which they have done.

They will have 10 tens revenue not 20 times revenue.

They signed up with the new york stock exchange and not the nasdaq.

That being said, there is money for the company.

It is still an aggressive evaluation.

It is not aggressive for web 2.0. if we see that lot size in the price day here, i would not be surprised to see it go above the final markup.

Stick around.

We will continue this conversation after the break.

Ritter prepares to -- we will dig into the numbers -- twitter -- we will dig into the numbers.

? this is "bloomberg west." i am emily chang.

We're back with our special panel.

We speak about twitter.

Jon erlichman is in l.a. and we have paul kedrosky in san diego and max wolf with us from new york.

Paul, i was speaking with someone earlier today.

He said twitter is never going to be as ubiquitous as facebook.

It will never have this many users, but it doesn't matter.

It is still a good is this.

Do you agree with that?

-- it is still a good business?

Do you agree with that?

Facebook is trying to position itself as this is that repository for photos and family updates.

Relationships of your life.

Twitter is a fleeting thing.

People might want to have a fleeting thing with a brand.

It is a more fluid collection of relationships that people not necessarily trying to replace connections with family and friends in your life.

These are two parallel tracks.

Twitter is showing a large and successful business.

I do not think he is wrong.

How would you respond to that, max?

Do think it doesn't matter how many users ritter gets?

-- do you think it doesn't matter how many users twitter gets?

If you choose facebook as the benchmark, everything else looks small.

What value twitter has is it is the first of history.

Twitter it is a first draft of history.

It works as a communication portal as opposed to a hangout.

It is a different platform.

Let's crunch some of the numbers.

You have been looking at user growth and revenue growth.

It is still looking pretty good.


They have got millions of monthly users right now.

To your point, this is a company that is highlighting the fact that 70% of the people using the platform actively are outside the u.s., which gets to something else you were talking about.

If it is a specific platform that serves it to civic purpose, -- specific purpose, maybe that is best suited for specific advertisers.

Will be -- will this be the right place for brands that are not benefiting in the moment?

In addition, will this be used in the same way for advertisers in the rest of the world?

For people who will go on the roadshow, they are curious to hear how many people are using it in the u.s. there will be a need to explain how the advertising story works outside of the u.s. on this roadshow.

The majority of twitter's revenue does come from the united states and a majority of users are outside of the u.s. will advertisers use twitter outside of the united states?

They'll have to beat them back with sticks.

This is purely an accident of history.

The sophistication of advertisers is that they are willing to experiment earlier with these hot forms first -- platforms first.

What will be interesting is watching work twitter drains those dollars from its -- is watching where twitter drains those dollars from.

Thank you for weighing in on this discussion on twitter.

What is bryan cranston up to it now that "breaking bad" has come to an end?

That is up next.

? this is "bloomberg west." i am emily chang.

The first commercial for that ipad air is out.

It shows bryan cranston from "breaking bad." it is an extremely simple tool, but also extremely powerful.

It could be used to start a poem , or finish a symphony.

Apple show the at at the end -- ad at the end of its show.

It has a starting price of $499. muddy waters has a new target.

It calls it a "massive fraud" in a new report.

Stocks are plummeting.

It wiped out more than $500 million in market cap minutes before trading was halted.

Trading resumed this afternoon.

They rejected allegations on a conference call this morning.

The muddy waters founder -- in an interview earlier, he gave his reaction to the call.

This is typical.

When you call companies fraud, except for one company, everyone comes out and says these allegations are untrue.

You do not understand the business.

We have formed a special committee.

This is pretty much standard fraud playbook.

How are you understanding this business?

How have you been collecting this information?

How long has it taken you to build this thesis?

We have worked on it for about two months.

We did a lot of on the ground work trying to find physical presence of the customers and trying to find retailers that have phones with apps preinstalled and surveying people in different parts of china to see whether they have this app on the phone.

We did a lot of analysis on government files regarding the nq.

Also, its largest customers.

We concluded it is itself.

We did a lot of internet research.

We downloaded the app and had computer engineers analyze the code.

We try to make a men's -- payments through their payment portal.

We did a lot of work on this company.

I want to reference something that was said on the nq call.

They said an executive has been as samsung and is now at nq.

You said that he was not on the board, but he is indeed on the board.

You might have gotten that fact wrong.


that is the company trying to twist what we said.

We pointed out of all the china companies, omar is not a director or officer of any of those companies.

He is on the board of one company.

This is a guy who sits in the u.s. the company kind of gives them information as to what his geographic responsibilities are.

This is something we have tried to get out of the company previously.

It is clear that he is not involved in the management or oversight of any of the china companies.

I do not know if that -- takes them out of anything.

It was certainly spun that way.

That was the muddy waters -- there was a response to the allegation.

We take these allegations very seriously.

They are all completely false.

We believe in transparency.

We have hosted a conference call this morning.

Nearly 400 people dialed in.

For two and half hours, we answered questions.

We are building an extremely amazing business globally and not just in china.

We are a global company.

Muddy waters showed a gross misunderstanding of our industry , as well as the business we are in.

It has been argued that 72% of nq reported that -- were fictitious.

What do you say to that?

We have partners in china that are not just for the consumer.

We are part of a broad ecosystem.

We have partnerships with dishy bidders that preload our software.

We have partnerships in carriers.

We operate in a mobile ecosystem . there are many parties.

It is not something we are involved in by ourselves.

We support our carrier partners.

We support our partners in terms of how we operate our business.

In china, we have an advertising business.

20% of our revenue comes from large partners that we work with.

So, we have an extremely thriving business in china and around the world.

That was the nq co-ceo, omar kahn.

? this is "bloomberg west," where our focus is on technology and the future of business.

I'm emily chang with your bloomberg top headlines.

Mozilla has a new tool for its firefox browser.

The contract internet use.

It is called lightspeed.

They can say how they're moving around the web.

Hbo is no longer for rhenium cable subscriber rolls.

Comcast also offers it and the streaming service in a basic passage called internet plus.

The offers local tv and internet and hbo for a starting price of $40 a month.

In a statement that hbo gave out -- a smart phone made by the motorola unit, they have cut the price in half.

It allows users to create a custom phone.

It costs $100 with a contract.

At&t drop the price of a higher moto cx.

Apple is making a push into emerging markets.

There are 35 countries, including russia and taiwan and south korea.

It has been a key stronghold for them.

There was a jump in profits.

How can awful -- apple find success?

I want to bring in adam satariano.

What do we know about these countries?

How much you demand is there for apple products?

This is part of a big rollout that apple is doing to get the iphone into 100 different countries by the end of the year.

They are taking a different approach.

It has introduced handsets for basically any type of customer that is at the high end or the low end or the middle road.

So, let's talk about china.

Do we know how the phones and the new phones have been selling?

This is a market where apple is sort of falling behind.

You share has slipped.

We do not have -- market shares has slipped.

We do not have a clear picture of that.

Apple will report its fourth- quarter results.

Initial launch their, there were long lines.

Nothing mind blowing.

We will be waiting to watch on monday to see if there is any details that apple will share.

There is no doubt that they are falling behind some of the companies like samsung.

It offers the device at a range of prices.

Given the amazing numbers we have seen some sound sunk, we have to point out that samsung makes a phone chip and apple uses samsung chips.

Is that driving some of the numbers in samsung's favor?

That is a big part of their business.

They are selling a lot of these smart phones.

In addition, they are selling chips that go into other people's smart phones.

There are processors that go inside the devices and they have a company like samsung manufacture it for them.

Samsung finds ways to make money on different sides.

Would apple consider making its own chips?

That would be very costly to do.

The plants that make it costs billions of dollars to do so.

Apple's business model until now has been to design the product in california and to hire companies like foxconn to assemble them are other companies like samsung to make the chips or intel to make the chips.

We will watch how the phones do in these new countries.

Adam satariano, thank you.

Linkedin has long called itself the professional network.

Professional spend more time on smart phones and tablets.

Have to find new ways to revamp its mobile applications.

There is a new total -- tool.

Joining me is that linkedin guest.

I know you have been working on this for a while.


Is the goal to make linked in a social network and not just a professional social network?

What is happening is that mobile is becoming more and more a part of the professional five.

You walk into the office in the morning.

You go home and check if you may mills -- e-mails here and there.

That is no longer the case.

We work whenever and wherever we want to be.

Mobile and tablets make it possible.

This is what we are doing.

This product is our way of ensuring that our members are enabled to work whenever and wherever.

You are also trying to encourage people to to spend more time there.

You doesn't make it is the content push.

Is that the goal to get users to spend more time on that app?

Users to engage on the mobile device as opposed to the desktop are two and half times more engaged than if they're only using it on the desktop.

So, absolutely.

We have the device in your pocket, you can do it at your fingertips.

Let's talk about this new feature.

How does it work?

But linked intro does is it enables you to make communication better.

E-mail is something we spent a few hours on.

It has the same message body and subject line and to and from.

What the linkedin intro does is as it goes through the servers, it adds a snippet.

It will tell me the latest story or video.

It helps me get that little bit extra richness of what you have been doing professionally.

When i'm e-mailing with my mom, i do not necessarily want to see her linkedin profile.

You don't have to.

It gives you a very small snippet.

It is really seamless.

Intro has been criticized for the last few days for compromising privacy and security issues.

How do you respond?

Linkedin has always been -- what linkedin intro does -- the content, all of the servers are on a separate ways.

These things do not commingle.

Eager -- user data is not impacted?


some people who have been talking about this have criticized apple for putting you in a position that could compromise user data.

Apple is inflexible with a situation that you guys had to do a lot of workarounds to make this work.

How do you respond to that?

Apple is a great partner.

We are an integral part of the maverick launch.

We worked with them on this as well.

We work with them to make sure that this enables both of our members to get -- on the apple platform.

Talk about the newsreader app that you guys recently acquired.

We have been waiting for this day and to see what you guys are going to do.

You guys are spearheading this.

Tell me about the thinking and the strategy.

It is definitely a huge part of our content strategy.

As professionals, we get bombarded all day.

It is difficult to synthesize all of this information to do what we need to do every day.

Our objective is to ensure that every professionals pence 10-15 minutes every morning and we give you the right pieces of content that enable you to be great at what you do.

It will get us closer to that goal and enable members to be more productive and successful every day.

The linkedin vice president, thank you.


We will be back with more "bloomberg west" in a moment.

? this is "bloomberg west." i am emily chang.

Apple is building its spaceship headquarters.

Amazon has cleared a key hurdle to add bio domes to its new campus in seattle.

A board unanimously approved amazon's plans to build three intersecting spears that would have offices, stores, and dining areas.

The doll needs to be approved by another city board.

Once that is done, they will have three new amazon skyscrapers.

In today's new hollywood, directv, time warner cable content charter communications are weighing the idea of starting aereo-like services.

Aereo has been battling with tv broadcasters in court.

Jon erlichman is in l.a. and helped break this story.

What can you tell us about this?

We know this -- there is a love-hate relationship with the broadcasters.

In recent years, you have heard the stories of these higher fees that the page tv providers have to pay to those networks.

It is called retransmission fees.

The broadcasters say aereo cannot do that.

There is a long court battle.

If aereo walks away successful in this legal battle, that pay- tv providers have to think about something.

They want to pay those same fees that they have been paying is aereo doesn't have to pay them?

And what about the idea of starting their own aereo-like services?

Directv, time warner cable, and try to have considering this.

Can they partner with aereo as well?


If you can make that technology yourself, why not do it yourself?

That is where things are going.

I'm sure the folks would say it is not that easy to replicate our technology.

What about the technology part of it?


There is proprietary technology that aereo has.

At the same time, it might the enjoying that it has first mover advantage.

Admittedly, the company has described itself or others have described as a modern-day -- there are people inside these pay-tv providers who we have spoken with that basically feel like they are in a position to replicate that technology and maybe take it another step.

It is interesting that the story began as aereo is on the scene and what does that mean for tv providers has shifted to a start of what aereo means for the broadcasters.

Jon erlichman, thank you.

Still ahead, talk about why a man founded a company in china instead of the u.s. we preview my exclusive interview next.

? this is "bloomberg west." i am emily chang.

They've developed as the google of china.

Baidu handles 80% of internet searches in china.

In a rare exclusive interview, i sat down with the ceo of baidu, robin li.

I asked why he decided to start the company in china rather than in that u.s. when he went to the university of new york.

I realized it is probably better to be close to the market you want to serve.

The chinese internet market was very different from u.s. internet market.

For more on this exclusive interview with baidu's robin li, be sure to check out "bloomberg west" next week right here on bloomberg tv.

Ads are on the way to instagram.

There will be a sponsored label and the top right corner.

Instagram says it will allow sample ads in the coming weeks.

It is starting with a handful of brands that have great numbers for the instagram community.

Will these ads lend to the instagram experience i will it turn users off?

-- or will it turn users off?

This is an example of what the ads will look like.

What do you think?

For the advertising industry in general, getting their hands on the users of instagram, we describe it to our client as exciting.

Do you think users will react well to these?

You always have the vocal few who will complain, but the reality is they are getting the service for free.

That needs to be paid for.

Most people are not put off by tv ads.

They still watch tv and use facebook and twitter.

Overall, it will make a difference to the user growth.

They can hide ads.

How much a do you think that will help with experience?

In our experience, not many people get feedback on the ads.

Not many people hide them.

If you are one of those vocal few who do not like them and you cannot hide them -- compared to facebook and twitter and google, what unique advantages are disadvantages this instagram have when it comes to being an ad platform for advertisers?

67% are women.

It is one of the most popular ops downloaded on the iphone.

-- apps downloaded on the iphone.

Huge potential for reaching all of those people.

Be careful about the types of ads that they feature.

They have selected advertisers based on the content that they publish.

Have a skill that will be one of the challenges.

Make sure your stream is not filled with ads of fat, but the core fashion photography that people love instagram four.

Scaling the quality of imagery, it will be a challenge.

I'm sure they will overcome that.

Talk about the scaling.

They will start with a handful of brands.

How quickly will that ramp?

Almost all of my clients are asking me.

There will be a lot of demand.

It will be the instagram carefully selecting the companies of the brand you're using it in a fresh way.

They want to promote a quality experience.

They will have the pick of the bunch.

Bill gradually add advertisers mainly based on the quality of the content and videos that those advertisers publish.

-- they will gradually add advertisers mainly based on the quality of the content and videos that those advertisers publish.

Will they have data to better target the ad?

They probably have the best targeting in the market.

I'm sure similar targeting will be available in instagram.

It will be sold by the same salesforce.

There'll be a large of -- there will be a lot of targeting capability.

I'm sure that will be a good opportunity.

Twitter is about to go public.

Instagram is about to debut ads.

How is the ad landscape changing over the next year?

Will we see dramatic changes?

The more platforms there are, the more money that brands spent.

That fuels the money they want to spend promoting that content.

For companies like mine, it is good news.

There is more activity in the market and more places that these brands can spend and promote their content.

It is driven by the amount of user growth.

People spend most of their time looking through these feeds on their phones.

I think there is a huge opportunity as the tide rises.

All right.

Thank you.

Thank you.

Now it is time for the bwest byte where we focus on one number that tells a whole lot.

Jon has a friday by -- byte.


This one is -- the cash free flow that has been generated over the last three quarters that apple.

Cash from operations minus capital expenditures.

To give you an idea of how that compares to google, four times as much as google.

I mention these cash numbers because apple will have more cash when reporting's come in next week.

They're urging apple to do something with that cash, mainly buybacks in stock.

I spoke with adam severed tiny on all -- adam satariano earlier.

They manufacture their own chips and apple has to buy samsung chips.

Why doesn't apple make their own chips and adam says it is expensive.

If any company can afford it, it is apple.

[laughter] you can always enjoy a rainy day fund even if you have millions in cash i guess.

Thank you for watching.

Have a wonderful weekend.

We will see you on monday.


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


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