What Can $4 Billion Buy?: Bloomberg West (11/22)

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Nov. 22 (Bloomberg) -- Full episode of "Bloomberg West." Guests: Pandora CFO Mike Herring; Roku CEO Anthony Wood; Stanford Graduate School of Business’ Marguerite Gong Hancock and Bloomberg Contributing Editor Paul Kedrosky. (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 jon erlichman in for emily chang.

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

Let's get straight to the rundown.

Spotify raises money.

And facebook tried to buy snack shack.

Things are getting a bit bubbly in silicon valley.

Comcast is thinking about buying time warner cable.

It might be joining forces with a rival to get the deal done.

Will have exclusive details.

And speaking of exclusive, ice -- i caught up with weinstein and why you will be teaming up with netflix on original movies anytime soon.

But first, to the lead.

Do you know what is cool?

$1 billion.

Now it seems to be about $3 billion or $4 billion or more.

There is an evaluation north of $4 million.

This comes after we learned that the cloud storage service dropbox is looking for an evaluation of $8 billion.

Snapchat turned down a $3 billion offer from facebook.

What is going on?

Let's go to paul kedrosky.

Happy friday.

Maybe i should say happy frosty friday.

You, too.

What do you think?

Are things feeling a bit frosty to you?

You know, some things do.

I do not know.

I think a lot of this is just people doing rearview mirror style driving.

It reminds me of 1999. it's a bubble.

Run.

I think that is premature in lots of different ways.

A lot of companies were chattering so much.

This is netscape going public after months of being founded.

This year is going close to 100% year-over-year.

Taking money at allegedly $1 billion.

That is not far off from -- there is a notion because a company is private it should be cheap is child this.

People want candy and are not getting it.

What about when you go out and look for investments?

That is part of what you do.

Seeing any stuff that you want to invest in?

Are there more pitches where you are like, really?

Compared to the ones that are more legitimate?

[laughter] that is always the case.

There's nothing new.

I will see about 1000 pages a year, give or take.

-- pitches a year, give or take.

Oh my goodness.

The thing that worries me more than bad pitches is bad investment.

There are bad terms.

There is a survey where they look that terms in venture capital financing in the last quarter.

The thing that struck me is a little worrisome.

The terms are about as entrepreneur friendly as we have seen dating back to 1992. that dealt with technical stuff like liquidation preferences.

How much of the subsequent return they get -- in that kind of stuff is the beginning of saying something worrisome.

It is less about valuation than it is about investors be tailwagging lee overeager -- tell lagging -- tail wagging earer.

-- eager.

Is that why it is easy for companies to sate thank you, but no thanks to that facebook's of the world?

There are other people who would pay this money.

I do not have to go public.

That is an option.

They do not have to take mark zuckerberg's money.

There is the other problem where people do not want facebook money.

I think i would rather have someone else's money from another company.

Being inside the facebook is not as excited -- not as exciting.

That becomes a more typical sale to make -- difficult sale to make.

I still expect snapchat to be acquired, but not at that price.

What would have to happen for you to feel like aims were getting out of control?

-- things were getting out of control?

I have no doubt that the underwriters will try to do that . if they see that, they will run.

Until then, i'm not worried.

Investors have a good handle.

When we see the opposite, we should run and hide.

Bloomberg contributing editor, paul kedrosky in san diego.

And a feature film about nelson mandela is getting oscar buzz.

Early screenings are attracting hillary clinton and obama.

An exquisite interview coming up.

? this is "bloomberg west." i'm jon erlichman.

The bidding war for timetable warning is heating up.

Comcast and charter communications are discussing a joint bid for time warner cable.

The talks are still preliminary.

There are still many options under consideration.

I want to bring in alex sherman.

He joins us from new york.

Walk us through what is happening.

Why this joint bid possibility?

This was a big day for people following the story.

Many have reported incremental details about charter being interested in buying time warner cable.

How is charter, a small company, raise the money it needs to buy time warner cable?

Today we got insight into how that might happen.

If comcast were to enter the negotiations and take it he's -- a piece of time warner cable, charter wouldn't have to be able to raise as much debt.

Comcast could get some strategic assets.

If comcast could add new york city, it would complete the northeast corridor there.

That could be one way of breaking up the assets.

With that said, we learn that comcast is considering buying the entire thing of time warner cable if regulators will go along with that.

In a breakup scenario, it would be an easier sell to washington because comcast has about 22 million subscribers and time warner cable has $12 million -- 12 million subscribers.

We will see.

You mention big numbers.

And even bigger number would be facebook with well over one billion users around the world.

Why this cable consolidation?

These cable companies are competing against these global platforms now.

Right.

You can start small and move out.

Cable doesn't compete against itself.

They are in regions of the country.

They compete against verizon and at&t. they compete against the satellite players, directv and dish.

If you keep pushing it out, they compete with net books and amazon -- netflix and amazon and maybe youtube.

You could say they compete with facebook.

That will be the argument that they make as you see this rapid consolidation.

It is something erect and dish might argue down the road -- direct and dish might argue down the road.

Alex sherman joining us from new york.

Now to pandora, the against u.s. online radio service is beefing up its platform as players like apple makes its way into the radio market.

Spending factored into its thirst -- third-quarter loss.

The chief financial officer of pandora joins me in studio.

Good to chat with you.

One thing amazing to me of your business is the amount of advertising revenue on mobile that you guys are generating.

I believe it is third only to google and facebook.

How does that come about?

That is correct.

Advertising revenue is over $100 million.

That is a requirement for us to do business.

80% is all traffic on mobile devices.

We have been laser focused on how to motor ties -- monetize mobile traffic.

We have a format in the ad that fits well.

We have had a lot of traction in selling advertising to advertisers who want to reach consumers who are using mobile devices.

You talk about this delicate balance.

You are introducing more advertising that is helpful for your business.

You do not want to disrupt the listening experience.

I heard something about is it that people feel more comfortable with the 32nd spot over the course of say half an hour as opposed to 15 seconds and later -- there aren't a lot of nuances.

Absolutely.

We have been slowly increasing ads strategically in order to increase the number of ads we run and measuring the effect that he -- that it has on the listeners enjoyment.

When you went to ads to get on a back-to-back format and the -- space interruption of music far part, but also increase the listener perception.

One of the key things of being connected to radio is that we can measure these things and we can ease into monetization strategies and balance the need to monetize our service with listening enjoyment.

You do have a subscription component.

The priority has been on the advertising side.

Sometimes people talk about subscription businesses.

Can you elaborate on that?

We think a subscription offering is largely an ad free offering.

It is an important component to the product decision-making that a listener can make.

The larger opportunity is in free radio.

It is from an ad supported perspective.

80% of our listening is on mobile.

We have seen subscribers grow significantly.

Over 3 million subscribers across our listening base.

We think that market opportunity is much bigger.

People are used to listening to radio free over am/fm.

We can offer them a free opt in to connected devices that have fewer interruptions because we monetize it are many ways through subscription.

That balance is very proconsumer.

Spotify raised more money.

People wonder if they will go public.

Will it tell a story of its international expansion?

You get questions all the time of which markets you are in.

We see pandora grow in more markets around the world at a faster clip?

We're focused on the business in front of us.

It is operating on all cylinders.

We have been looking to international markets.

He rolled out in australia and new zealand.

The primary barriers are rolling out internationally is licensing structures.

We have an excellent business opportunity in the united states . our short-term focus has been building that.

We are keeping our eyes open and watching for development and licensing.

That is on our radar.

Thank you for your perspective.

Chief financial officer of pandora.

Nba is next in our special series tech in the game.

? this is "bloomberg west." i'm jon erlichman.

He has a lot of impressive titles, max levchin.

He helps fund and create new companies.

At the robin hood investors conference in new york, stephanie ruhle caught up with the serial entrepreneur and asked him about some projects he is working on.

We have two major projects we have announced.

One is a product and a company that i spend most my time on right now trying to change the way consumer loans are underwritten.

We are trying to change that using modern data sources and sites.

The other company is an attempt to lower the costs of infertility treatment and create a new kind of health insurance.

A new form of health insurance.

Everyone seems to be talking about health insurance.

The rollout of the failure of healthcare.gov.

You know, it is probably a disappointment that the government is not good at building software.

I would like to believe silicon valley has a few lessons to teach.

Like what?

If the white house picked up the phone and called you, what would your answer be to solve this healthcare.gov problem?

I think the costs of health care insurance -- i think the problem is the cost of health.

They are focused on having people pay for these people.

How do we make it cheaper to stay healthy?

How do we correct before we have to fix it?

Focusing on health and wellness, wellness is an important thing.

It does not seem to be a fad.

The data that is gathered on your body will be used to predict what could become a costly health care and if it.

-- benefit.

All of these primitive, but rapidly developing sensors are creating a better picture of her overall health and predicting what may or may not happen to you and lower the costs.

That was paypal co-founder max levchin with stephanie ruhle.

And buyers successfully blocked steve ballmer from buying a team and moving it to seattle.

Cory johnson has more.

The national basketball association is ripe with the tech titan teen owners.

Mark cuban, and a new ownership group for the sacramento kings.

I think of it as social.

Is hoping that tech in touch will turn around the franchise.

He is not going at it alone.

These are truly smart people.

Smart people like the call comes ceo -- qualcomm and chris kelly.

We may not have the most wins, but we have the most patents.

Nba hall of famer is a personal advisor.

Teams are expensive.

You need to have a lot of money to buy them.

A lot of these guys are successful.

They have money and passion.

The teams pose a tough business problem.

Eight winning seasons in 28 years.

The lowest in the league.

One of the biggest tech titans of all, steve ballmer, try to swoop in and by the kings and move the franchise to seattle.

But there was a clever real estate and municipal debt deal to keep the team in california.

I came to california with no money.

Everything i have i/o to the state of california.

-- i owe to the state of california.

The understand the data.

I also created a mission for my day job, my software company.

We want to build a winning franchise.

Make the world a better place.

It is a shot a dreamer can make.

Openness, hard work.

I have got a vision.

Cory johnson, bloomberg, sacramento, california.

The latest hunger games film is already catching fire.

That is coming up next on "bloomberg west." . the girl on fire.

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

I'm jon erlichman in for emily chang.

Let's go straight to your bloomberg top headlines.

The iphone maker will put $30 million into high-tech manufacturing facilities in pennsylvania.

They will fund research and development at a university.

And cuts in its entertainment unit.

Sony looks to boost profit and keep full ownership and movie, tv, and the music business.

This is after dan loeb pushed sony to sell part of its assets.

Speaking of dan loeb, his hedge fund third point has taken a stake at softbank.

The robin hood investors conference -- he disclosed this at the robin hood investors conference in new york.

The latest hunger games movie "catching fire" is off to a solid start.

There were advance screenings last night.

The film hit most theaters today.

Lions gate is the studio behind the movie.

They are betting it success will launch its next franchise.

The 75th hunger games!

Most new films can only hope to have as much buzz as the hunger games catching fire.

The first hunger games film generated millions of dollars at the box office.

Investors took notice.

Lyons -- lionsgate stock -- hunger games will be a big deal for lionsgate this year.

They will easily exceed the first film's opening weekend.

It will significantly outperform overseas.

They will have 3000 screens in china.

This isn't real.

Lionsgate is hoping to drum up a buzz for its next franchise.

They've also show a trailer for their upcoming film "divergent." lionsgate has lots of other films to make.

The last two of the series are based on the last book "mocking jay." they are even toying with the idea of hunger games themepark.

"catching fire" has taken in 20% more than the first films showing.

Harvey weinstein's latest film is manson -- nelson mandela's long walk to freedom.

I spoke exclusively with weinstein.

I started by asking why the goal of this project was to do more than make a movie.

This movie is about leadership.

We need in this country.

It is also about bipartisanship.

People working together.

This movie inspires me to do things that i never would have thought.

I have been pretty much a democrat all my life.

I have been against the koch brothers and i invited them to come to the screening.

Let's put down our weapons.

Forgive us all for our, you know, trespass is in everybody's mind and try to work.

Don't get me wrong.

I do not make educational films.

We are inspired by seeing this movie.

It plays like an action movie.

It has got a great lesson to boot.

Does that make you more passionate to get behind this may be so than others studios?

Yes.

I knew we could do some things.

This is nelson mandela.

It is not glorified like gandhi.

Nelson mandela is hit his first wife and he regrets it to this day.

It is in the movie.

Nelson mandela was a bit of a womanizer.

He regrets that to this day.

That is in here.

He is not a saint.

He is the first person to tell you he was not a saint.

This is the story of how he gets to that place where he can do so much good.

It seems like there are lot of weinstein contenders in the mix.

This is no exception.

Easier said than done.

You guys make it look pretty easy.

It is up process like?

Perfectionism.

You try to drive yourself and the people you work with to do well.

I think for us the awards are a way of giving publicity to movies that deserve it.

I saw the new hunger games.

It is really good as a matter of fact.

People will flock to that.

I understand that.

It is a way of putting a light on some things that maybe are not as commercial.

I will put this movie against any other movie.

I will put up against the avengers, anything.

President obama and the first lady saw this at a white house screening.

Does it help for a partnership like this when people in washington are very aware of the film?

Yesterday, we had john mccain , colin powell put on the same stage.

You could see the friendliness.

The movie brought them together.

This is not the only thing that can bring them together.

That is what we walk out of the film with.

They will learn something that mandela taught them all.

He walked out of prison and for gave them so he could build a better future.

That is what we have to do as a country.

Move on.

Start fresh.

To see that republicans and democrat on stage, wow.

This is another movie waiting to happen.

You hear all of the stories about cutbacks at the big studios.

Does that create a challenge when it comes to getting a film like this out?

It is a challenge and an opportunity.

Making movies with this kind of subject matter is not what people perceive as wow.

We defy gravity and have these movies do well.

It is important they do well.

We can make commercial movies just as good as anyone else.

When you see "the king speech" or a movie do well -- i like to give attention to other films that need it.

The moviegoing experience is changing.

Netflix has said it would love to get into making original movies.

Have you spoken with them at all about that possibility?

Netflix has been a great partner.

They are supportive of movies like this.

I grew up in a movie theater.

I'm planning to continue to be inside of the movie theater.

If it ends up in the movie theater, that is a good place as far as i'm concerned.

I protect that great communal experience of walking -- watching movies in the dark with strangers who quickly become friends.

That was harry weinstein of the weinstein company.

Twitter is not the only ipo story in tech.

? this is "bloomberg west." i'm jon erlichman.

Mark zuckerberg has wrapped up his 24-hour hackathon.

They give the winners a bag full of goodies including a tablet and a speaker.

Before the event began, zuckerberg spoke about how important he thinks inspiration is.

This is one of the biggest civil rights issues of our time.

It makes me proud that i am part of a community and it was easy to rally the leaders and support this effort.

Along with zuckerberg, linked in founder reid hoffman was also in attendance.

Much of the ipo talk of late has been centered around twitter.

The china scene is worth watching.

Alibaba is preparing for potential multibillion-dollar ipo next year.

For more, we bring in the director of stanford university's china 2.0 initiative the studies impact of innovation and entrepreneurship.

Great to have you here.

Pleasure to be here.

How has the twitter ipo influence the tech scene in china?

Use a larger stream of ipos.

You mentioned ali baba coming forward.

Twitter has encouraged more companies to come to the u.s.. the big news coming from the china internet companies are mobile and internet.

We see that with new companies coming forward.

They have figured out ways to use mobile and monetize it.

We talk a lot about how more videos are coming to twitter.

The tv experience is coming to twitter and maybe less so on traditional tv.

We do not talk so much about what is going on in china and how the video platform is working its way into many of these other social network services.

What can you tell us about that.

There is a long-standing youtube like platform that has long been using video.

And they have figured out a way to integrate this where they have video and the social network scene.

People describe a company as the china version of twitter or facebook.

There's a lot of innovation taking place in china.

How would you describe that.

I think it is an even.

There are definitely spikes.

Bc companies building new products.

-- you see companies building new products.

It is integrated.

There are many things coming from tencent.

It is really coming from china and going global.

Talk about ali baba.

You have this very public opening which really speaks to the size and scale of what a chinese company can be in a more visual way.

How important is that from china's perspective?

It is huge.

When you think about hundreds of billions of dollar ipo, we do not -- that does not happen very often.

I think they're only about $41 billion ipos.

This market is huge.

This is the first time that a china tech company has come onto the global stage at the $100 billion mark.

It is a coming of age of a company that is going global on the market and is also aiming to be capturing markets worldwide.

Thank you for stopping by.

Leisure to be here.

-- pleasure to be here.

We are days away from that kickoff of the holiday shopping season.

I will ask anthony would how people can tap into the shopping spree.

? welcome back.

I'm jon erlichman.

This is "bloomberg west." jonny i've says is simple is good.

Babel design guru is helping with the design philosophy.

Be spoke with charlie rose on the design philosophy.

It defines the essence.

Therefore you understand what it is.

You understand what it does.

See it -- it is simplicity.

It is not just the absence of clutter or stuff that is not there.

It is this tremendous gravity of trying to find that simple solution.

You can watch all of charlie rose's interview with jony ive tonight at 8 p.m. and 10 p.m. eastern.

They kicks off the holiday shopping season -- next friday kicks off the holiday shopping season.

Roku kicks off the "now this is tv" ad campaign.

It compares to other streaming devices.

How is the campaign going?

What this be the year of that device?

Good to see you, sir.

Thank you.

What is the holiday strategy at roku?

It will be the biggest polity -- holiday season ever for roku.

Everyone -- many string to the tv every day.

-- steaream to the tv every day.

For us, we're launching the ad campaign and we are focused on explaining why roku is the best streaming device.

People often do not understand why we are the best.

It has about 1000 more channels.

You can watch a new movie every day.

This has been a very busy couple of weeks for gaming consoles.

There is the new xbox from microsoft.

There are streaming devices, too.

A lot of new devices on the market for the holiday season.

In highlighting the differences of what roku compared to everyone else -- roku has unique advantages.

The new gaming council costs $500. if you are a serious gamer, that is great.

If you just want a that a way to stream content, a $49 roku device is what you get.

There is a story of cable consolidation.

You could see comcast and charter team up to acquire time warner cable.

What do you make of the story of cable companies that feel like they need to come together?

Is that a direct result of sales of devices of companies like yours?

I don't think so.

I think it is more to do with the fact that cable companies are making lots of money on broadband and streaming devices like roku are helping drive that revenue stream.

Increasingly, they're under pressure content costs.

I'm not in the business of cable operations, but i think they feel by consolidating, they can have more negotiating leverage.

There is something that the holiday time called self giving.

When asked comes to tech card -- when it comes to tech hardware, sometimes people treat themselves.

If regina did erman what the sales breakdown will be, it is her a lot of self gifting of roku devices -- if you could predict what the roku sales breakdown would be, would it be a lot of self gifting of roku devices?

It is a trend.

We have a new ad campaign for the new spokesperson we have found.

It is a guy from the ukraine.

The campaign is around self gifting.

Christmas can be fickle.

You might get a sweater, but you what -- what you really want is a roku.

That is one of our new campaigns.

Before we go, and estimates on how many devices you think you will sell this holiday season?

There is some research done recently.

They reported that we sold more roku streaming players than any other device in the united states as far as streaming players go.

We haven't reported new numbers, but we are selling a new device.

We will have our best christmas ever.

The bwest byte is where we focus on one number that tells us a whole lot.

We have a special guest.

Edmund lee is in new york.

What do you have?

The bwest byte is 43 million.

It is a pretty big number.

That is the amount that rupert murdoch spent at his -- she gets the property in the divorce.

That is the main price she got after the two of them file for divorce.

They settled this week.

You have reported so much on this.

Here's the thing -- he finally had a chance to buy it.

Now he has got to let it go.

There you go.

We have got to let you go.

Have a great weekend.

?

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

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