Google Search Overhaul: Bloomberg West (09/19)

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Sept. 19 (Bloomberg) -- Full episode of "Bloomberg West." Guests: Spark Capital's Bijan Sabet, T-Mobile's Michael Sievert, Gerber Kawasaki CEO Ross Gerber, Quicken Loans' Dan Gilbert and Bloomberg Businessweek's Sam Grobart. (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 am emily chang.

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

Apple ceo tim cook speaks exclusively to bloomberg.

Find out what he thinks about the company's lagging market share in china.

It is day two of mark zuckerberg's trip to washington.

Search is google's primary source of revenue, so why is the tech giant revamping its key product?

Apples brand-new iphone are about to go on sale online around the world.

Tim cook spoke exclusively to bloomberg businessweek about some of the biggest issues confronting apple.

As for the iphone 5, tim cook said our objective was to sell a great phone.

As for apple shares , they have tumbled more than 32%. cook says -- on the early edition of "bloomberg west.

," i spoke to the man who conducted these interviews.

Take a listen.

They are all nerdy.

That is the best way to describe it.

Each of them is very articulate, very intense.

Everyone is very deliberate.

They really are quite doubtful and very precise about what they are about to say.

They have also been extremely precise about ios seven.

I have been using it for the last several hours.

It is really different.

Talk to us about the details.

Probably the biggest change is the loss of any sort of verisimilitude with similar things.

The notepad does not look like a legal pad.

They told me that initially, they wanted things to resemble things in the physical world to get people comfortable with using things on a smart phone.

People know what they are and they are able to move toward a more abstract aesthetic.

Let's talk about tim cook.

How did you respond to you about these claims that innovation at apple is somehow off?

He does not understand that and does not accept that at all.

That is not terribly surprising.

Innovation is not just change.

It is not just new features.

They wanted to throw a bunch of new features into a phone, they could do that.

It would not create the optimal experience for the customer.

You never called out competition like samsung by name, but it was clear that is who they were talking about.

He came down hard on android.

He talked about android being fragmented and he said that he did not think android could take over the world like windows.

His argument about android is that because of the issue of fragmentation, there are several different versions of android out in the wild.

Not each one is compatible with the other.

This is going to cause confusion for consumers and app developers.

Just to give you a data point, 93% of iphone users were on ios 6 before 7 came out today.

A third of the users are on one version of android.

Some of these versions are three years old.

When you look at things like customer satisfaction and usage, you see the gap between android and ios being huge.

He also dressed market share concerns.

In china, apple's market share has dropped.

There are cheaper competitors out there.

Look, there is a market we want to go after and there is the junk market that we do not want to go after.

There is a segment of the market that really wants a product that does a lot for them and i want to compete like crazy for those customers.

I will not lose sleep over that other market because it is not who we are.

Is taking the high road the right thing to do?

It is their approach and they do believe right now that they can be a very profitable, successful company at the high- end of the market.

Steve jobs said back in 2004, we have a greater market share in pcs than bmw and mercedes have in the automobile market.

They can have a robust user base and stay up there while everybody else fights down here.

That was sam grobart.

For more of his exclusive interview, pick up the latest edition of bloomberg businessweek on newsstands.

Facebook ceo mark zuckerberg spends another day in washington meeting with lawmakers.

What are his other motives?

You can also watch a streaming on your tablet, phone, and on

? welcome back to "bloomberg west.

I am emily chang.

We are on television, radio, and on

Mark zuckerberg has met with some key lawmakers on capitol hill today in closed-door meetings.

One of his top priorities is immigration reform.

He traded in his signature hoodie for a suit and tie as he made the rounds in capitol hill offices.

Zuckerberg stayed pretty tightlipped as he traveled the hallways.

Andy is one public -- at his one public event, he sounded off about his mission, he came here to lobby for immigration reform.

Often times, people talk about high skilled and comprehensive immigration reform as if they are different things.

That student is going to be the entrepreneur of tomorrow.

The toughest sell on that issue, house republican leaders.

He sat down with john boehner and eric cantor, who have been in favor of a more piecemeal approach.

Zuckerberg and his advocacy group are trying to get it on the house agenda at a time when the budget and debt ceiling are front and center.

He talked about lawmakers about patent reform and the nsa surveillance scandal.

He got an earful with the david rockefeller.

I believe facebook has an obligation that safeguards their customers information.

Rockefeller did commend zuckerberg for his work on cyber bullying.

While it is clear that mark zuckerberg went to washington to talk about immigration reform, what are some of his other motives?

Are there always other motives?

They are usually money, but not just money.

Mark zuckerberg has plenty of issues with the federal government.

He had some strong words about the government user request.

Nicholas thompson, good to see you in real life.

I was really shocked by how strong his words were about how boneheaded the government's demands were on american businesses.

He spoke very strongly and very candidly.

I suspect that in his meetings in washington he was not talking about that.

His beef is with the nsa.

His meanings in congress for more about immigration and building connections.

I would imagine that the congressman that wanted to meet with them -- he can say look, this nsa thing is hurting american business.

I am sure you try to make that case.

They were also meeting with them because it makes them look cool to their constituents.

They're trying to look -- to appeal to their young constituents.

What is the context for his involvement?

Usually, they think, washington, we can hack that.

That was the attitude of microsoft and google.

Quasi-libertarian, we do not need the government.

His roommates are people who become very politically active.

He has more of an appreciation for d.c.. he started this advocacy organization and he got into a lot of trouble because he pushed immigration reform.

He also says, i am in favor of the keystone pipeline.

There was a big backlash against that.

He is purifying himself.

We're just having mark zuckerberg stand up for the rights of undocumented immigrants.

He comes out of this and it's to wipe away a little bit of the mud that god on him from the keystone trouble.

Is this the kind of thing that ceos do when they initially engage?

Washington does not work that way.

He thinks he will have more effectiveness than he will.

That is the curse of silicon valley.

Immigration reform is massively complicated.

It is harder than he thinks.

The keystone pipeline is a classic example -- in the new yorker last week, great stuff.

Nicholas thompson, great to see you.

With 100 billion quarries per month -- inquiries per month, search is google's cash cow.

? this is "bloomberg west." google is undergoing an under hall.

-- an overhaul.

It pushes into voice.

Aren't they trying to read her mind?

Google's goal is to deliver lots of relevant information to the end-user, whether you are sitting in front of your computer or doing a mobile search.

We wanted to talk to their search is our -- yzar.

Google says that is just the beginning.

He is a google fellow and lead for the company's engineering efforts on search features.

When i first joined google -- google is undergoing an overhaul of its search pages.

His team of engineers updates algorithms to improve semantic search, the process of understanding actual words.

We have begun to understand words a lot better.

We began to understand synonyms and how these words are related to each other.

It is a complex search system and pagers as -- pages are sorted by hundreds of factors.

They will return to you.

Google's mission was always to understand what you want and give you exactly what you want.

Algorithms are constantly evolving as engineers run an experiment.

When users type keywords into google, the results include video, maps, images.

And then there is a focus on voice search.

Exley want to be able to understand what you are looking for and give you the tools that help you in your everyday life.

I checking the weather.

-- like checking the weather.

What about checking your flight time?

Is my flight today on time?

It understood that i had a flight today.

Technology hasn't proved so much in the last couple of -- has improved so much in the last couple of years.

Financially, how important is it for google to make these kinds of moves?

You are talking about a company that is going to generate close to $50 billion in revenue this year.

A lot of it is advertising related.

The growth is different than the early days of google.

Jon erlichman, thank you.

This week, during my interview with jack dorsey, and he said an ipo is a milestone, not a goal.

Twitter is about to hit the milestone.

I spoke with one of twitter's earliest investors.

I asked him what attracted him to twitter.

A lot of people did write this company off in the early days.

The first two injured capitalist -- venture capitalist investors , silicon valley did not get as excited about twitter as we did.

I know you cannot speak about the ipo specifically, but what can you tell us about the timing of this?

Earlier, you played back jack's interview.

This is a milestone for the company, but it is not the goal of the company.

We are delighted to have been an investor since the early days of the company.

We are enthusiastic about the progress.

You were a board member from 2008-2011. those were difficult years.

Jack was ceo.

Evan was elevated.

Dick costolo was ceo.

Jack came back.

This has been an extraordinary company.

It has gone through continued massive hypergrowth.

Anytime you go through that level of growth, things will evolve and it gets to be a pretty dynamic situation.

We invested in the company and there were five or six engineers.

There are now thousands of employees that the company.

I am delighted that jack and evan are still playing critical roles in the company.

Dick was an early investor of the company.

The team has grown , has evolved, there have been some changes.

It has been a very unique company from the start.

How does twitter compared to facebook?

We have seen a bit of copycatting.

We have seen facebook taking a bit of cues from twitter.

Is it a threat to facebook?

I tend not to get too worried about facebook.

Initially, he used to bother me when i saw facebook copying twitter features.

Users are using different products for different purposes.

It is no question that facebook is a very popular service.

Twitter continues to be very popular.

Users are finding products to be good, but for different reasons.

I do not think it is a zero-sum, by any means.

Twitter has done a good job of adding capabilities.

They are disciplined about maintaining a delightful and focused user experience.

Twitter has added video and photo, but the service is very lightweight.

It is fast, immediate, it is not bloated.

That was one of twitter's original investors.

Wireless carriers are getting creative as they try to woo users buying the new iphone.

Is an installment plan the way to go?

? you are watching "bloomberg west." i am emily chang.

Grand theft auto 5 is off to a fast start.

Sales topped $800 million in the first day of the games release.

Earlier projections called for grand theft auto to cross the $1 billion sales mark in its first month.

Sony has high hopes for its upcoming playstation 4. it is expected to sell 5 million by march.

It is expected in november at a price of $399. if the company completes the sale of a handset to microsoft, he will get about $25 million.

He was in charge of microsoft's business division before joining m nokia three years ago.

Turning to in pinterest, it took its first steps towards monetization today.

It would begin experimenting with promoted pins from select businesses.

He wrote on a blog -- what will happen?

What exactly is going to happen?

A new kind of promoted pins.

How they may start monetizing the site.

Reminiscent of hell twitter started doing ads on its site.

-- reminiscent of how twitter started doing ads on its site.

It flows into how the site is already used.

How do they assure users that this is not going to ruin it?

It is a delicate balance.

It has always been viewed as a potential gold mine.

People are saying where they want to go on vacation.

People are showing their friends the things they want to loan.

Air is a lot of consumer interest.

The ceo has been very forward about the fact that he does not want to turn this into a very commercial site.

He wants to keep it a lifestyle site.

It is a delicate dance and the fact they are turning towards business shows he is ready and willing to turn this into a commercial site.

He has been resisting this for a long time.

Sounds a lot like mark zuckerberg.

By the time facebook was four years old, it it was making no means of dollars.

Pinterest house lot about -- has about zero revenue.

They are realizing they will have to turn it into a business that they want to keep it going.

What kind of lessons are they taken from facebook and twitter?

They are mimicking facebook and twitter's native ads.

They do not want to do the splashy banner ads.

They want to do ads that fit into the flow of the site.

If you are a costume shop and someone is searching for halloween costume ideas, they will maybe -- that is an opportunity for the costume shop to advertise.

They do not want to barrage users.

The lesson they have learned from twitter and facebook is to go mobile early.

Mobile is a part of this strategy somewhere.

But this is a company -- how do they make good on that?

You are seeing it today.

This is the beginning of a long process.

They are already facing competition.

There are startups based on the idea that pinterest is not a commercial site.

There are starting to realize they need to get there now.

I am a user, so i will be watching.

T-mobile, at&t, and verizon are offering a new installment plan for those looking to buy the new iphone.

Consumers can get the new device without paying anything down and.

-- anything down.

T-mobile was the first to try out the installment plan model.

It is offering the iphone5 with zero down with 24 payments.

At&t is offering the phone for 20 payments.

For more on how tomorrow's lunch will impact the carriers business, i want to bring in t- mobile cmo.

First of all, you guys have been selling the iphone on pre-order the last few days.

This is an exciting launch for us.

Tomorrow is going to be a big day.

This is the first time there has been a major iphone launch where t-mobile has been a participant.

For us, it is a celebration.

How our pre-orders going so far?

I cannot give you numbers.

It has been available for a few days and we have plenty of orders.

We are anticipating the launch in the stores.

I think it is important for people to be able to touch and feel these devices.

The real launch date is tomorrow.

Any favorite color so far?

A little bit of a surprise.



Maybe it should not have been a surprise.

This is a big moment.

We have had the iphone5 for a few moments now.

I think this is a huge opportunity for people to switch , to question whether they have the right carrier.

There is a lot of pent-up demand for people, but they have been waiting.

They're waiting for a new device and this is their chance.

I would not have guessed that think would move to the forefront.

-- pink would move to the forefront.

Are you going to lose money?

Over the 24 months, we recoup the price of the device.

That is a level of transparency that our customers love.

There is finally a choice.

You can do business the old way.

They want to hide the ball on how much an iphone costs.

Or you can do business with us.

It is very transparent and simple.

You are paying for the device on the side.

We have compensated for that.

We reduce the price of our monthly rate plans.

You save over a two-year period $1000. this is the first iphone launch where there is real consumer choice.

At&t is offering the 5s 40 down -- for 0 down at.

Customers are coming to us and drove's. look at the second quarter results.

This idea of throwing away the contracts, throwing away the rules, letting you upgrade to the next device when you want is resonating with consumers.

Customers look at what they pay over the entire timeframe.

Even with that phone price, you are saving more than $1000. what they are doing is they are making you pay for the same phone twice.

The $22 a month they are collecting from you and then with the rate plan.

They are expecting that consumers will not know it.

But i want to asking about your ceo john leger.

He is a straight talking no- bs kind of ceo.

How has the impact of the brand?

He has really changed the strategy completely.

Look at where we are now versus where we were then.

A year ago, bashed we are outpacing everyone in the industry on growth.

-- we are outpacing everyone in the industry on growth.

This is an industry that is stupid and broken and arrogant and we are here to change it.

We will be able to grow our business for me do that.

We are putting customers first and letting them do business with us on their terms.

He set the tone for all of that change.

The phones are on sales in stores at 8:00. are you preparing for an onslaught?

We are ready.

We have 3000 stores.

This is a moment we are very prepared for.

We know how to handle volume and scale.

I mentioned the other day that with our zero down promotion in august combined with our on carrier value proposition it allowed us to deliver what we think was our biggest market share in our history.

We are ready.

We will be watching tomorrow.

We have heard one of the wireless carriers thoughts on the new phone, but what will apple investors be looking for?

Apple faithful are not the only ones anticipating the new iphone.

Investors will be watching closely to see how well it sells on day one.

He holds about $6 million in apple shares.

Ross, what do you think about the new phone?

What do you think about ios 7? i have been using ios 7 since i downloaded it yesterday.

I am happy with what they have done.

They have matured the operating system into a whole new level of form functionality.

They have done a beautiful job with the operating system.

When you combine the software with the hardware upgrades, you are talking about the best phone in the market these days.

What they really did was create the best phone in the market.

Apple absolutely has to make a tv.

I have sent tim cook e-mails.

I am so tired of my samsung tv.

If they can control the on-off switch on your television, it will control the entertainment ecosystem.

That is what i am waiting for.

The phone business is much more profitable.

It is a much more lucrative business.

What about management?

I think tim cook is he is a great manager.

That is where his strength was . steve jobs was not the best manager.

Kim was able to get the deal done as far as getting the product -- tim is able to get the deal done as far as being the product done from the concept phase and into the customers hands.

He is not the most exciting person to watch on stage, that is for sure.

I think -- i want to see what happens before the end of the year and what they ultimately do with the ipad.

We will have to leave it there.

Q so much for joining us today.

-- thank you so much for joining us today.

? welcome back.

I am emily chang.

Dan gilbert caught up with us at a recent tech conference in detroit.

He is majority owner of the cleveland cavaliers.

He thinks bankruptcy is a good thing for detroit.

Take a listen.

There is almost nobody who will not leave pretty impressed and have an impression different than what the expectation is.

1100 full-time interns , we had 19,000 applications for those jobs.

Every single one of them, i cannot find one survey who was not impressed.

Now they can have a tech job there, entrepreneurs who are attracted.

They can impact things positively.

Go to another big city, they are fairly advanced compared to us and you may not see the personal impact compared to us.

What is the start up pull here like that?

In detroit, you will be a big fish in a smaller pond.

What kinds of companies?

There is a vibrant startup community here.

We have people moving from seattle, san francisco moving here.

They are starting all kinds of businesses.

Web technology businesses, consumer web businesses, financial technology businesses.

It runs the gamut.

27 companies and some of them are growing out.

Very exciting startup community.

Magic johnson a partner?

He has an eye for the right talent.

You close to $70 billion in home loans last year.

What are you on track for this year?

85 billion or 90 billion.

We are very excited.

We are a technology company.

We are the largest online by far.

We are a centralized operation, doing loans in 50 states.

We are doing them all over.

Interest rates are going up.

Interest rates are still relatively low.

People are complaining.

It is a starkly -- we have been around 28 years, it it is still low.

Businesses still pretty good.

Would you ever consider branching out?

We do have a subsidiary called in-house realogy.

It is a network that deals with realtors all over united states.

We have an online financial tool that we have spun off.


Your best known for investing in the church rate.

-- for investing in detroit.

You have some very public statements about lebron james when he left.

That was three years ago and it was a very emotional time for everybody.

We are all past that now.

He has done pretty good.

The cavaliers will have a great season.

How great?

A lot better than the last three.

I earlier interview with dan gilbert.

You can watch the whole interview online.

It is now time for the bwest wide.

-- bwest byte.

$54 million, the amount of money amazon raised in its 1997 ipo.

The powerful woman behind the ipo was the chief -- the chief financial officer.

She died last night in a tragic bicycle accident.

She was the architect of the companies expansion.

She was a friend of mine.

I am sorry, such a sad story.

It is a moment to stay -- take stock in how far amazon has come.

Think about a company that had to prove itself.

It was a different story more than a decade ago.

Thank you for watching this edition of "bloomberg west." we will see you back here tomorrow.

? . .

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


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