Zynga's Gain: Bloomberg West (07/02)

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July 2 (Bloomberg) -- On today's "Bloomberg West" the focus is on innovation, technology, media and the future of business. Hosted by Emily Chang with Editor-at-Large Cory Johnson and Senior Correspondent Jon Erlichman f9om Bloomberg's San Francisco studio, it showcases the personalities, companies and trends that are transforming the global economy. (Source: Bloomberg)

.4%. we had a positive data.

Everyone is focused on the auto sales, which are the highest since 2007. that is the second-biggest purchase anyone makes.

The house being the first.

In the average age of a car is really old, 11 years.

Usually, it is seven or eight.

That wraps up "lunch money ." time for the early edition of " bloomberg west." emily chang is live in san francisco.

Welcome to "bloomberg west ." our focus is on innovation, technology and the future of business.

Day awol the massive transit strike continues in san francisco, costing the bay area $73 million a day.

Some tech company see a silver lining.

Zynga cost new zynga's new ceo will be leaving a hole at microsoft.

What does it take to create a new cloud supercomputer for a lab that helps to create the world wide web?

First, to the lead.

For the second straight way in san francisco, a challenging commute for tech and other workers as bay area rapid transit employees remain on strike.

The shutdown meant that commuters from the east bay and south of the city had to find alternative ways to get to work.

According to the bay area council, the strike is costing the area $73 million a day in lost productivity alone.

Some companies are losing productivity, others are seeing business opportunities in the strike.

Ridesharing apps have seen business pickup.

An office provider is offering free workspace and 30 bay area lounges with some that have heart tickets.

Blue jeans network is best known for the billboard they put up with a message for yahoo's marissa mayer after she announced that she was ending the companies work from home policy.

First of all, tell me about this free trial you are offering at how this came to be.

Thank you, for having me this morning.

We really saw an opportunity to get the word out.

Obviously, with the strike, it has inconvenienced millions of workers in the area and we wanted to give those workers an opportunity to maintain their productivity but to do it from home.

We are offering them a free trial to use the service unlimited.

All you can meet, we like to say.

You have a number of clients such as facebook, foursquare, stanford university.

What kind of activity are you seeing since this trek started?

It has been a boon for business.

We have seen a two times a spike in our traffic this week in just a the first two from our bay area customers.

We can attribute that directly to the strike.

If it had not been a slow week to begin with, that might have been greater.

You are just looking at some pictures of the bull board that you put up when marissa mayer and did her work from home policy.

It was a very controversial decision.

You have been quick to capitalize on the opportunities to market to your self . who is coming up with ideas?

It is certainly a team effort.

You have to be opportunistic.

The biggest competition that we face is awareness.

We look for opportunities to get the word out.

Fortunately, they have handed these on a silver platter.

We have a viable and useful product to address these needs.

We are being realistic and trying to give customers an opportunity to use something i can really help them in their daily lives.

You do have competitors out there, certainly with different approaches to the same thing.

How do you differentiate yourselves?

What makes you guys special?

The short answer to that question is that each of those solutions that you just mentioned are islands.

What makes blue jeans unique is that we are an interoperable videoconference survived -- provider.

We let you use cisco or sony or microsoft or skype, or google or just a browser and a camera.

If none of those work, an old- fashioned phone line.

It makes it possible to have a videoconference with your colleagues and customers, even when you cannot get to the office.

If you are at home and you want to use skype, with blue jeans, products can work together.

We're the only people in the world that can bring it to to one single meeting, these business class conference room systems.

When you bring us together, you create a network effect opening up your reach for video to about 4 billion people worldwide.

The reason this is controversial, some people think that flexibility is important among technology is making it easier to telecommute.

Marissa mayer 's argument was that being in person, in person interactivity cannot be replaced.

When you have a face-to-face collaboration, you can create the benefits without physically being in person.

You think that you can really replicate an in person meeting on a videoconference?


The only thing you are able to have the smell and taste.

About 50 million people in the u.s. alone, the type of jobs that will lend themselves to telecommuting but only about 3 million people do it as a primary form of work.

There is an untapped man out there.

What has kept it untapped are one of two things.

It is the policy or the culture of the company or the technology.

The trilogy has not made it as easy or productive.

-- the technology has not made it easy or productive.

We can make a face-to-face meeting as easy, open, and affordable as an in person meeting.

You will see some of the policy and culture issues a road and you will see more telecommuting.

How have you set it up so that your employees can do this?

We have a very flexible work environment.

We have offices here in mountain view as well as in san francisco, southern california, atlanta, india.

We have people working from offices, working from home.

People say that video conferencing saves people from having to travel.

One of the other benefits is that for people that do travel, it is a way to connect back to the people at headquarters without being a second-class citizen on the the dark end of a phone line.

When you can see and be seen him it makes for a better meeting.

You mentioned the fact that you were a startup and there are the different ways to market yourself and the billboard is expensive for a smaller company.

What was the feedback on the marissa mayer billboard?

Was it worth it?

It was worth it, the biggest competition that we face is awareness.

Anything we can do to get the word out is great.

When you last out to something like this, this is not just to have the billboard out there but the media and the blogosphere pick it up, it gets the word out there.

If yahoo is looking for help, we get the word out is great.

Have a solution and we very much welcome the conversation.

How much more business did you get because of that billboard?

It is tough to say how much business we can tie to the bull board -- the billboard, but we saw a spike in web traffic immediately afterwards.

The traffic is really grown over the past year like gangbusters.

25% of the entire services market, activities like the billboard and the service itself which provides an unmatched value proposition has led to that growth.

The chief commercial officer for bluetooth network, thank you so much for joining us.

John magic is leaving microsoft just months before one of its most important product launches in years.

How will this impact the xbox launch?

-- don mattrick is leaving microsoft.

This is "bloomberg west" on bloomberg television, streaming on your phone, tablet, and bloomberg.com.

Don mattrick is calling it game over at microsoft just a few months before the release of their new gaming system.

How devastating a blow is this to microsoft?

I want to bring in my partner and editor at large, cory johnson.

You have been covering the release over the last couple of weeks.

What is your take on this?

Don mattrick has done some interesting stuff at microsoft.

A lot of it has been terrific success, not the least of which was launching the xbox live business.

They have been following the game business for a long time.

This is digital world research.

When you look at him leaving him a they have been looking at this stuff for years.

He is getting ready to take off.

This is usually never good but giving what is going on with microsoft in the past six weeks, they have the departure issue coming up, there are a string of bad news heading to the launch, but at least it is now and not six months from now.

I was down there in los angeles when they launched the device and talking about some of the gaming stuff and they gave us the price, which was $100 more than the playstation.

What is the worst piece of news that has come out about the upcoming xbox in the last few weeks?

The worst piece of news is probably the shock value.

This is the high end of where we would come out.

They can focus the value proposition and the marketing metrics around why people should be spending $500. they can now start using this next four months to set up a good line for finding what the xbox one is all about.

What had microsoft opposed -- proposed?

What they were going to have the box check in once every 24 hours if you're going to play games online.

Kind of like what you're set top box does.

Because it is microsoft it was seen as being something evil.

The reverse course does not necessarily have to check in all of the time.

The second issue is really used games.

They will be restrictive and put more pressure on third-party developers to try to see if they want to come up with their own authentication.

The less consumer friendly approach.

As the gaming universe expands, i wonder if those hard- core gamer issues or hard-core gamer only issues matter as much of the broader world.

The xbox will be marketed eventually to the hard-core gamers, but as we get into the midyear calendar of 2014, it will be more about people that use netflix, people who use hulu, possibly a music service.

The people who use skype on the xbox, some of the issues that have been cropping up recently when not matter at all.

What will microsoft do now without don mattrick?

Who will end up in charge of this important department?

He had a strong bench.

His senior leadership team is pretty talented.

You have several on the marketing and financial side.

You have a guy that is heading a publishing of the games.

They will choose from someone internally.

If i had to choose one of them, i would say phil.

My vote, it will be for yusuf mehdi.

What is it that microsoft needs to address.

Do they need to address hardware issues.

Will that affect the choice that will make?

What they need right now is somebody who is not going to rock the boat.

Most of the plans are already baked, but they need someone who can execute what they have been lining up.

Along those lines, they need to do a little bit more, it it is more third-party publishers making sure that everyone is on board.

They probably need a little bit more attention right now.

I guess to play games you need games.

The lone ranger opens in theaters tomorrow.

The budget was north of 200 million dollars and many reviews are unfavorable.

What does this mean for disney?

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

This is the early edition of "bloomberg west." the fourth of july weekend is typically a big one at the box office.

"the lone ranger" hits theaters tomorrow and the release comes after the disney announced that bob eiger will stay on as ceo for another 15 month.

We have more on the movie from l.a. they don't need another flop right now, especially after " john carter." this has been a pretty big year for disney if you think about the summer box office so far.

The "iron man three" film that has generated more than a billion dollars at the box office.

Also, " monsters university" helps to set a high bar.

Also there is a high budget for this film.

If this is a winner, disney will be a need position to talk about a strategy where you take stories that people know and put a fresh spin on them.

It does not end up working out, it is a reminder that even when you are staying focused on a strategy, like a studio like disney, you can have big wins and sometimes not so much.

This is not just a bed on the lone ranger.

If johnny depp is the superstar on screen than jerry bruckheimer is one of the biggest superstars behind the camera.

If you look at disney's connections to bruckheimer, " the pirates of the caribbean" franchise.

This is a relationship driven business.

This is not just one film tied to jerry brock armor, this is a long-term relationship.

Very similar that they have with another producer.

They most recently did "oz" with him.

When we come back, dish network may have lost out on bids for clearwire and spread but they hire making a new bet.

-- and sprint, but they might have a new bet.

This is the early edition of "bloomberg west." passengers on southwest airlines are allowed to watch mobile tv on their flights.

Dish is paying for the service in the exchange for the ability to run advertisements.

Dozens of on-demand shows will be available.

They offer a similar service on jetblue with dish network -- with directv.

We will tell you a noosenew partnership between rackspace and cern> this is the early edition of "bloomberg west." i am emily chang.

Time to check the headlines outside of technology.

I will hand it over to trish regan.

The tensions show no sign of easing in egypt.

The president has ignored calls to resign.

Opponents of mohamed morsi have taken to the streets.

Two more officials in his government resigned today.

Edward snowden has withdrawn his request for asylum in russia after they demanded that he stop leaking documents.

Norway, brazil have all said no to his request.

The auto industry is showing more signs of strength as sales boomed in the month of june.

Ford led the way with a jump in sales.

Chrysler sales were up eight percent.

It was the best june since 2007. when all of the numbers are in, the auto industry is expected to post its strongest month in six years.

Those are your top headlines.

Let's head over to dom chu.

Relatively flat for the most part.

You can see the major averages up marginally.

The dow jones is up 15 points . the nasdaq is up four points.

We are floating right around -- we are just off of the session highs.

Three of them you will want to focus on.

Constellation brands, this is the beverage alcohol company behind big names like corona, modell oh, and other big mexican beers.

They are coming short of analyst estimates.

The shares are off to % -- are off 2%. the federal regulators have delayed testing for one of an experimental hepatitis drug.

You can see that has taken a real fall on the shares.

They have lost the quarter of their value over the course of the day so far.

Watch their shares.

We will finish it off on a tech story.

We know that blackberry shares are not what we thought they would be but they are below $10 per share.

We will see if the weakness continues.

It is after the disappointing blackberry earnings earlier this week.

We turn to the future of the cloud.

Rackspace has teamed up with cern.

They are an international organization that operates the largest particle physics lab, test known as the birthplace of the world wide web.

Cory johnson is joining us with the story.

Yes, -- you are an insightful guy.

Yes, this cloud thing is a big deal.

Interestingly in this partnership, rackspace is going open source.

Joining us to talk about this is the ceo.

Cern is a trip, the problems they are trying to solve are not the minimize . they are trying to figure out the way all of the matter and things that surround this work.

They are exploring the origins of the universe and looking for that god particle they keep talking about.

It is exciting to work with these guys.

We looked at it in terms of stores.

As much as the supercollider, that is something they had to told themselves.

It looks like you are using these for the processing power as much as storage.

That is a common misconception.

We talk about cloud storage in our consumer lives.

Computing is a big part of it and that is where the term cloud computing comes from.

This is the idea of being able to tap into massive amounts of computing power to solve big problems.

We see companies of all sizes and organizations starting to tap into cloud computing because it allows them to have unlimited computing power at their disposal.

The organization will do a lot of analytics on the output of that large collider.

That is why they need a very large scale cloud.

The open source aspect of this is interesting.

Is that something that they kind of demand of things?

Where does the open source stand in the scope of all of your offerings?

Open source software has been something that we have been a big fan of ever since the early days.

We know from history that the web was built on open source.

Many of the software aspects of the web and the cloud are really starting to emerge as open source foundations underneath.

I think that certain n as a research organization, a group full of software engineers, physicists, they have always graduated towards open source -- gravitate it's towards open source software.

This is not a typical kind of customer rackspace.

We typically deal with enterprises and e-commerce companies.

People that do things that you think of as commercial activities.

When you think over to science and research, it is a whole set of different problems to solve, it is a new set of challenges.

They really give the organization a way to collaborate on the kinds of cloud technology that they will need going forward.

We have built all of our technology on open source software.

We lost this a couple of years ago with nassau.

This is an organization doing big things in the cloud.

This is picking up where that left off.

This is like an open marriage, they can pick up and leave when they find a different partner . the goal was to make it easy for organizations to adopt cloud computing.

One of the thing that holds cloud back and ways is this of locking yourself in to one particular vendor or stack of software.

We think that the opportunity is huge if we create a standard around open source and open stack and i think that is what is going to empower people to adopt cloud even faster.

Our model has been services and support and expertise wrapped around the software.

It was really the data center services, the things that we do with that software.

This is a new opportunity to deliver a great service to experience customers around the world.

We really appreciate your time.

Thank you.

Thank you.

Well, vi -- bebo.com is buying back some of his company.

This is "bloomberg west" streaming on your tablet and on television.

Michael burgess has bought back his site for $1 billion.

-- michael birch has bought back his site.

This is a social networking service that allows people to share photos, lay games with their friends.

We are joined now for more on the history of bebo.com.

Was this ever a facebook competitor?

Yes, they started the company in 2005. they met in the uk, they have moved here to start the company.

It was actually doing very well.

They were like fourth or fifth in the social networking game.

Everything is going gangbusters.

They were the most popular in the uk.

That was their bread-and-butter.

When they were purchased in 2008, myspace had been bought for 560. if you look at the number of users, you could get to that valuation without too many problems.

The problem was in executing that to make it worth 850 plus.

That is where time warner failed.

It is now one million.

That would be a pretty significant drop in stock market parlance.

It is calling to 10 million.

Why would he buy it back?

Why not start over?

At least with what he is purchasing, he gets the url back, he gets whatever i.t. still exist . a million dollars isn't that much.

He is an interesting character.

He was charting a private club called battery and there has been some interesting issues surrounding that.

He has invested in some startups.

He is a fairly well-known individual.

He has a tremendous network.

The battery is this private club that they started.

They bought a famous building in san francisco.

They are turning it into this club where fairly wealthy people can go for fine dining, they will have a hotel, they will have a game room.

Perhaps not something that you and i will be attending.

Maybe you.

But certainly something for the technorati.

His wife cofounded the company.

What is the role here?

They met at a bar in london.

They founded several companies together.

This was the one that really took off.

Everything they have done, they have done this together.

Thank you.

As i just mentioned, michael birch is working on another project, that private members club that we were discussing.

Jon erlichman had a chance to catch up with him and talk about battery.

When michael birch turned a playroom room into a wood paneled pub, he did not go to home depot.

He had it shipped over from england.

The ones that i know are quite far from here, so i wanted to re-create an english style pub in our home.

It is because we can.

They sold their site to my briefly the number one social networking platform in the uk, to aol for 800 $50 million in cash.

We felt that it was the opportunity.

Facebook was taking more and more members away from us.

Some of them went into investments in startups like pintrest, and some went into their house.

There are your costars -- there are beer coasters, i and lions.

Larry ellison bought the house across the street.

He is turning away from tech.

He has plans to open a private members club in san francisco.

He is hoping it will spark conversations about things other than apple and facebook.

Most of the events i go to in san francisco, it is the same people and you always talk about tech.

San francisco is already home to private clubs.

He hopes to attract a younger crowd.

A little different from the internet business.

It not only takes a lot of money, it takes a long time to do things.

If they hope to have 1200 members at the opening.

In the meantime, he will be hanging out at his own pub listening to tunes.

I see jimi hendrix in there.

I do see some janet jackson.

Half of it is my wife.

And playing pool on a pool table that is more than 100 years old.

Jon erlichman with michael birch.

Club battery will open later this month.

We will look at the new plan to offer the first exchange traded fund for the digital currency.

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

This is "bloomberg west" on television, streaming on your iphone and tablet, and on bloomberg.com.

The winkle boss twins have applied for an initial public offering.

-- thwew winklevoss twins have applied for initial public offering.

What were they planning on doing with good coins.

I was sitting across from a prominent journalist.

He said, this is a match made in hell.

It is interesting.

They have been investors in bitcoin for a long time.

They are trying to create an etf.

They want to share these -- sell the shares to the public.

They want to use these proceeds to acquire.

What they want to do is establish an etf, take 20 million dollars in proceeds and go out and buy bitcoin.

They want this value of the etf trade with the value of bitcoin.

The proceed will be taxed, unlike regular bitcoin.

This will have an effect on the small marketplace.

What about the record three issues?

? you learn a lot about bitcoins by reading this perspectives -- prospectus.

This comes directly from the sec filing.

It says a significant amount of demand is generated by speculators, investors seeking a profit from the short and long-term holdings.

The rolet if lack of the acceptance in retail and commercial marketplace limits the ability of end-users to pay for goods and services.

This is a speculative tool.

It is not used in commerce, generally.

The concerns are all right there.

This is something like summary other investments and people are trying to sell to a greater pool.

This is the inherent question.

That is the inherent issue.

Is bitcoin going more mainstream?

It sort of sounds like it.

With every day, with every new investor, yes.

There is the volatility overseas.

Let's see what the sec does.

They put their name on this.

This is the bitcoin trust.

We will be watching to see what happens.

Cory johnson, thank you.

Yahoo prepares to roll out the red carpet as it makes a new partnership in hollywood.

We will have the details next.

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

Welcome back to "bloomberg west." as apple applies for the iwatch trademark, another smart watches upping his game.

We will talk about the release today.

New york city has announced that .nyc web addresses will become available for new york residences and businesses.

Top level domain names are set to be by the end of this year.

Yahoo strikes a new partnership in the entertainment world.

They are keeping him to be the explosive -- exclusive digital partner of the award show.

They will have coverage from the red carpet.

Jon erlichman is back with us now from l.a. where he is based.

A lot of times people asked this question.

It feels like this, maybe it as to some of the confusion.

You think of properties like yahoo mail, yahoo search.

Now, you think of tumblr.

This is a reminder that yahoo is a content company.

They make their money through advertising.

This would be a logical stenson of that.

Having live streaming content tied to a live television event is important for a lot of companies right now.

They have seen how important twitter has been.

Face but just adopted #to counteract that.

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


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