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00:00TELEVISION IS A VERY STRONG BUSINESS. WE OPERATED THOSE AS TO BUSINESSES FOR QUITE SOME TIME. THE TECHNOLOGY BUSINESS ENTITY BUSINESS. AND THE TV BUSINESS HAS ACCESS TO THE WEATHER CHANNEL BRAND AND ACCESS TO THE BEST POSSIBLE SCIENCE. OF COURSE, THAT SCIENCE IS ONLY GOOD TO GET BETTER AS THE TECHNOLOGY PARTS OF THE WEATHER COMPANY INTEGRATE WITH WATSON. BETTY: HOW MUCH OF THE WEATHER CHANNEL DEPENDS ON THE DATA POINTS THAT HAVE NOW BEEN SOLD TO IBM? DAVID: THE WEATHER CHANNEL IS AN IMPORTANT CUSTOMER OF THE WEATHER TECHNOLOGY COMPANY. AS ARE MANY OTHER NETWORKS. WE PROVIDE DATA TO A LOT OF TELEVISION NETWORKS AND A LOT OF LOCAL STATIONS. PROBABLY THE BIGGEST RELATIONSHIP IS AND WILL CONTINUE TO BE WITH THE WEATHER CHANNELS TELEVISION PROPERTY. BUT IT WON'T CHANGE FROM WHERE IT IS TODAY. IT WELL AND GET BETTER AS A FORECAST GETS BETTER AS A RESULT OF OUR MERGER WITH IBM. BETTY: SO YOU HAVE NO PLANS ON SELLING THE MEDIA OR THE WEATHER CHANNEL ASSETS. YOU'LL HAVE ANY PLANS TO SELL THE WEATHER CHANNEL. DAVID: I WILL CONTINUE TO RUN BOTH UNTIL DISCLOSES. AND THEN THE NEW OWNER WILL SORT THAT OUT. BETTY: TELL ME ABOUT HOW LONG THIS INTEGRATION IS GOOD TO TAKE. DEBBIE THE PROCESS, DAVID. DAVID: WHEN YOU SEPARATE A COMPANY, IT TAKES A LITTLE BIT OF WORK. -- TAKE ME THROUGH THE PROCESS, DAVID. DAVID: WHEN YOU SEPARATE A COMPANY, IT TAKES A LITTLE BIT OF WORK. BETTY: WHAT DID THE COMPANY COLLECTED DATA WAS THAT WAS SO ATTRACTIVE TO IBM? DAVID: THERE WERE THREE TOURNAMENT OR AGENDAS. FIRST IS THE INTERNET OF THINGS. WE CONTINUE FIND MORE AND MORE THINGS TO COLLECT OBSERVATIONS ABOUT THE ATMOSPHERE WHICH IS HOW WE PREDICT THE WEATHER, FROM SMARTPHONE -- FROM SMARTPHONES, FROM WINDSHIELD WIPERS, FROM CONNECTED HOMES AND THERMOSTATS, FROM TRUCKS AND TRAINS AND BUILDINGS. AND WE CONTINUE -- AS WE CONTINUE TO CONNECT THINGS AND GET MORE DATA FROM THEM, THAT GIVES US SO MUCH MORE DATA TO PROCESS. THE SECOND PART IS COMPETITION. WE THEN HAVE TO COMPUTE THAT INTO A FORECAST. THE WEATHER CHANNEL IS UNIQUE IN FORECASTING THE WEATHER FOR 3 BILLION LOCATIONS EVERY 15 MINUTES IN ORDER TO SERVE EVERY PERSON ON THE PLANET ON THE SMARTPHONE. THAT TAKES AN ENORMOUS AMOUNT OF COMPUTING POWER. AND WE AT IBM HAVE AN AGENDA -- AND WE AND IBM HAVE AN AGENDA TO KEEP COMPUTING IN THE CLOUD. THE THIRD PART IS CONNECTING THE WEATHER COMPANY WITH WATSON. TODAY, WE DO PREDICTIVE COMPUTING AT THE WEATHER COMPANY. WE PREDICT THE WEATHER AND WHAT IS GOOD TO HAPPEN. BUT THAT ISN'T COMPLETE. AN AIRLINE PILOT NATION KNOW WHETHER TO FLY OR DELAY HIS FLIGHT PAID A TRUCK DRIVER NEEDS TO KNOW WHAT IS GOOD TO HAPPEN. PEOPLE NEED TO KNOW IS GOOD TO HAPPEN AND WHAT DECISIONS OR ACTIONS THEY SHOULD TAKE BY BEING COGNITIVE, BY TURNING THE PREDICTION INTO AN ACTION, BY CONNECTING OUR DINNER WITH ALL OTHER DATA. IT WILL MAKE OUR FORECAST INFINITELY MORE USEFUL TO BUSINESSES AND INDIVIDUALS. BETTY: CAN YOU PUT IT DOWN, HOW MUCH MORE ACCURATE THE WEATHER WILL BE BEING CRUNCHED BY WATSON AND THEIR COGNITIVE SERVICES? DAVID: WE ARE MEASURING IT BY PRECISION. I THINK IT WILL MEASURE ACCURACY. WE ARE THE MOST ACCURATE BUT THOSE ARE BIG AREAS, LIKE COUNTIES OR STATES. WE WANT TO MEASURE THE WEATHER AT THE LONG COMBINATIONS, FOR SPECIFIC LOCATIONS. THAT WILL REALLY MATTER. AT THE CONFERENCE THIS WEEK, THEY TALKED ABOUT HURRICANE PATRICIA. KNOWING EXACTLY THEIR ROUTER THAT HURRICANE ALLOW THEM TO ALLOCATE THEIR RESOURCES AND HAPPY BEFORE THEY NEEDED TO BE AND NOT WHERE THEY DIDN'T NEED TO BE. SO WE BELIEVE IT WILL SAVE BILLIONS OF DOLLARS IN THE ECONOMY AND IN LOST SALES AND END BY THE PREDICTIVE ABOUT WHETHER WEATHER IS GOING TO HIT AND WHERE IT IS NOT GOING TO HIT. BETTY: IBM HAS ALREADY BEEN CRUNCHING WEATHER DATA FOR QUITE SOME TIME. AND YOU SEPARATE HAVE. -- AND YOU SEPARATELY HAVE NOW THAT YOU ARE COMBATING THE TWO, HOW MUCH OVERLAP IS THERE? DAVID: THERE'S CERTAINLY ENERGY. WE HAVE BEEN FOCUSED ON DIFFERENT PROBLEMS. HAVE HAD A GOOD WORKING RELATIONSHIP FOR YEARS. I THINK THERE IS CERTAINLY A BIGGER AGENDA THAT CAN HAPPEN. I THINK BECAUSE IBM IS SO GOOD AT COGNITIVE COMPUTING AND HELPING BUSINESSES MAKE DECISIONS, WE WILL NOW CONNECT THAT WEATHER FAR MORE CLEANLY AND SPECIFICALLY TO RETAIL DECISIONS, TO TRANSPORTATION DECISIONS, TO ENERGY DECISIONS. THE WEATHER WILL BE FAR MORE USEFUL WHEN IT IS DELIVERED THROUGH WATSON. BETTY: THERE ARE SYNERGIES, I UNDERSTAND, BUT WILL THERE BE AREAS WHERE YOU SEE OVERLAP AND YOU WILL HAVE TO CUT BACK, EITHER STAFFING OR EXPENSES? DAVID: NONE OF THIS WAS BASED ON COST. WE TOTALLY BOTH BUSINESSES ARE GROWING. THE COGNITIVE COMPUTING IS A FAST-GROWING AREA WITHIN IBM AND OUR BUSINESS HAS BEEN GROWING RAPIDLY. WE HAVE THIS NEW APP OUT TODAY THAT IS BRINGING PEOPLE INTO THE IOS SYSTEM. WE DON'T SEE ANY REDUNDANCY. WE'LL MAY SEE SIGNIFICANT GROWTH. WE WILL CONTINUE TO HIRE AND BUILD A GREAT TEAM TOGETHER. BETTY: TELL ME HOW THIS DEAL CAN TOGETHER. WHO APPROACH TO? AND HOW LONG DID IT TAKE -- WHO APPROACHED WHO? AND HOW LONG DID IT TAKE? DAVID: WE WERE NECESSARILY TRYING TO FIND A SUITOR, CONTRARY TO RUMORS. WILL REGISTER AND TO BUILD A BUSINESS. I WOULD SAY THOSE AGENDA ITEMS OF COGNITIVE COMPUTING, WHICH I THINK MACHINE LEARNING IS ARTICLE TO THE NEXT ADVANCE AND WHETHER, OUR HUGE FOCUS ON CLOUD COMPUTING AND I/O TO KEPT HAVING THESE CONVERSATIONS. WE FINALLY REALIZE, THERE ARE SOME US TO DO TOGETHER. LET'S DO -- LET'S PUT THESE BUSINESSES TOGETHER AND DO SOMETHING SPECTACULAR. I WILL ALSO SAY, FROM IBM'S PERSPECTIVE, AS THEY GOT CLOSER TO OUR TECHNOLOGY, THEY BEGAN TO UNDERSTAND THAT THIS PLATFORM COULD WORK IN OTHER SOURCES OF UNSTRUCTURED DATA, MAYBE SMART ENERGY, MAYBE HEALTH, MAYBE EDUCATION OR SMART CITIES. IF WE CAN WORK TOGETHER AND ACTUALLY USE OUR TECHNOLOGY FOR OTHER PREDICTIVE AND MORE IMPORTANTLY OTHER COGNITIVE PLATFORMS, IT COULD BE A WIN-WIN FOR BOTH COMPANIES. BETTY: DAVID, GREAT DO SEE YOU. THANK YOU FOR JOINING ME. DAVID KENNEY, THE CEO OF A WEATHER COMPANY JOINING US IN ATLANTA. STILL AHEAD, LINKAGE -- LINK IN

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Blue Skies Ahead for IBM's Watson?

David Kenny, The Weather Co.'s chief executive officer, discusses the company's deal with IBM. He speaks with Bloomberg's Betty Liu on "Bloomberg Markets." (Source: Bloomberg)

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