>> live from pier 3 in san francisco, welcome to the early 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. talking about the world economic forum in douglas, switzerland. a lot of -- in davos, switzerland. a lot of tech giants there. marissa mayer. randall stephenson. they talked about everything from the future of technology to the nsa. i want to bring in our editor at large cory johnson. good to be in the same place now.

>> we have been in separate places for a month. [laughter] >> one of the interesting things about the nsa, the tech leaders pointing fingers squarely at the government. >> it is interesting. certainly sac,o, and yahoo! as well getting these requests from the nsa. here they are at the world economic forum talking about the impact on their businesses. could askd if you president obama one thing, what would you ask for? let's look at marissa mayer. >> what one thing would you ask president for? >> transparency. so users understand the background requests we are getting and how that data is going to be used. we need to be able to rebuild trust with our users. trustyou think that the

has fallen because of this? >> i definitely think so. not only within the u.s., but also internationally. me there are other countries that have concerns we are looking at. i think transparency is something that would ultimately help this. >> you do wonder what the fallout is going to be internationally in terms of how it affects the growth of these economies. -- of these companies. if they do not trust yahoo!, they will look somewhere else. yahoo! -- they have all been to the white house to talk about this issue specifically. we also know that cisco has been more candid than any company out there. cisco came out last quarter, saying that sales of hardware precipitously. john chambers has been very outspoken on this.

he has been very outspoken about this policy because it is hurting his business. >> one thing he is coming for -- he specifically talked about the need for more regulation. i don't know if this is too optimistic on his parts. the idea that the united states and its allies can come up with a map for the road, how we are going to do business, how we are going to survey all? -- surveil? what happenedk at to cisco in china. reports from hewlett- packard last quarter. ibm. you can really see this playing out throughout the information technologies. it's not just the privacy issue. >> they actually put it back on the companies. take a look at what he had to say. transparency --

>> transparency is not just about the government. it is also about the vendors. vendors have to have transparency themselves. they cannot put it all on the government. >> who is he calling out there? yahoo!, cisco?ut >> i think he is talking about the fumbling around there, with the prism revelation and edward snowden. but i think one of the things that the company fell back on, i think, it's not that big an issue to tell you, but we're going to tell you it's not that big a deal. i will be interesting to see what the numbers look like when we can see them and if the numbers really matter. is it just really big metadata? at&t is cooperating very quietly. yahoo!, one of the early ones complaining about this. i think they recognize the threat to their business. >> speaking about yahoo!'s business, marissa mayer did dig

deeper. she talked about mobile. that has been a fema verse for the past year. she has been talking about how mobile has been -- has been affecting her business. >> by the end of this year we will have more mobile users and other traffic. we pride ourselves on running the world's largest start up. can we be flat? it really enables people to think, how should we be changing? what are the new disruptive things? >> here is the thing. she has been talking about mobile for more than a year. the thing thing is happening with facebook and twitter. it does not mean more people are using yahoo!, just that they are using yahoo! differently. what does it say about their traffic? what does it say about the growth?

>> the first thing, every single person matters big time for this company. hugee in this transformation across businesses where it is not just about adapting their existing business to mobile. a company like yahoo! is trying to find its way and find new relevance. it has lost its way for, let's call it 10 years. looking to be relevant on mobile. some numbers tell us in the last quarter of two 390 million mobile users. that's a 15% growth. that's a really massive growth and change in behavior. now they will be almost required -- not actually require -- investors will demand of them, tell us your metrics, because we want to know how many users you have out there. we want to see if it is

accelerating or declining. they want to see them accelerate. -- he was brought over from google. she just fired him. obviously she is not happy with the performance. >> a lot of companies that made their way initially on the desk they are mobile first. we keep hearing mobile first development. it is hard for a company to be mobile first. you can argue that twitter is mobile first. their mobile revenues exceed desk top revenues. we have not heard that from facebook. we certainly have not heard that from google and yahoo! we will see how that transition goes. at some point, the company is going to be required -- we know that yahoo! has fought with the fcc about what they can disclose. they did not want to disclose they had as much of 30% of revenue coming from microsoft.

rely on that agreement, which could expire in a short time. you can be sure if the mobile numbers look really good, they would disclose them. if they have not, they are probably not as strong. asked georgetor connolly of foursquare, asked technology isat transformed the market the most? marissa mayer said the iphone. another said the fit but -- fitbit. story a really funny about michael dell. take a listen. questionu feeling ok mark are you feeling ok, mark? what do you mean, michael? i'm really worried about you.

i'm your friend. i have noticed in the last re- days, you have not worked out. it's -- >> it's almost a little creepy that michael dell could know that marc benioff is not working out. >> both of them really built their empire on the desk top. they are thinking about and actively engaged in this world up -- not getting fit. these guys are both in their late 40's, i think. 40's, because i like both of these guys personally. what is interesting is they are actively engaged in learning about this world were lots of data is being created and users outside of the social network -- i know that they have the facebook team with the fitbit. with a few other devices, the

fuel band maybe a little less so, the sharing is massive amounts of data being collected. or in the case of marc benioff collected for a few days. i'm sure these guys are thinking what this means in terms of big business. >> but what does it mean in terms of right to see? where does -- in terms of privacy? where is this data stored? who gets to see it? what about privacy? >> i'm sure they are thinking about gathering the data and spending that data in seeing how it can be used, and not just trying to get his friends off the couch. >> definitely a great conversation. i know, i know -- you will sound it out. >> i truly have commitment issues. >> i have so many at home. our editor at large, thank you. coming up, we will talk about the future of ibm.

is what's in it? why not? ♪

>> welcome back to "bloomberg west." i'm emily chang. ibm reporting earnings yesterday 420 are teen and the fourth 42013 -- for 2013 and the fourth quarter. what is going on with ibm? this is the one company that warren buffett have a lot of faith then, that ibm had the smart decision to sell the pc business a few years ago.

they were supposed to be on the up and not. they have had arise. i have been on tv for so long. they have been able to increase servers per share. you have to think about how much financial engineering is going on. they have reduced their share, goch helped a lot of the eps up. but a lot of the numbers look bad for this company. what do you get in for? these guys have seen sales fall. i think really consistently over two years. -- the of a rating rockets profits have also continued to fall and those numbers are looking pretty weak. is happening before she took over? ceoeople forget there is a transition at ibm about every 10 years and they tend to be kind of rough.

the ceo was forced to undo some pension changes. that heard the number -- the company and the gross numbers. similarly, there was an attempt to revive ibm and he has done what a joke -- quite a job of that. years of great patents, the leading number of patents of all u.s. corporations. what have they missed? they have missed social. not just social for computers, but social for networks. this could have been an ibm opportunity. they missed- software as a surface. for all their inventing, they are not big in the against areas. with watson, the idea of that being some form of service. they say this could be a 10 billion dollar revenue opportunity. the customers say, it take so long to teach watson about us,

it's not really worth the investment. have they made a strategic misstep in terms of pouring money into this artificial intelligence thing? ofi think it's a little bit monday morning quarterbacking. the notion of renting out watson as a service comes rim years and years of trying to sell watson to every company. trying to convince companies they need this big computing power. you can see that in the numbers. it's only speculative. the technology services, quarter after quarter after quarter decline. they are supposedly moving away from slinging hardware like comen. most of their sales from software. >> and they're supposed to be moving into lenovo as well. software numbers have only grown three percent on a year-over-year basis. --n you get into the numbers

the tax rate, for example, falling really dramatically. i think that is overlooked with all the other things going on in the business. average, about 26%, and you have an 11% number lower than most analysts are looking for. the analysts are not going to come out and say, i got it wrong. they have a lot worse average than in previous years. eventually, that might come back to bite them even further. >> all right, ibm is something we will be watching, of course. amazon has denied they are building up a tv service to rival cable and satellite companies. this is a story that we reported yesterday. thele familiar with situation say that they are building a prime video selection that would have a live component. i want to bring in our senior west coast correspondent jon l.a.hman nla -- in

so, they are building drones but not up pay tv service? should we believe them? >> amazon says, you're right, we are now working on a pay-tv service, but sources have told bloomberg and other media outlets conversations have taken place. i think when you look at what amazon has become, there is logic to them at least having conversations on this front. they spend a lot of time on tv. they obviously have value in making tv and movies available through their instrument -- instead video -- instant video service that members are consuming through amazon prime. lubricant is reported that they hasworking -- bloomberg reported that they're working on their own apple tv device. amazon, a, the ceo of very smart person who thinks a lot about the consumer. and when you look at the

frustration a lot of consumers have with the pay-tv experience, amazon is a company i'm sure a lot of people are looking to for ideas. would it be for amazon to cut a deal with other content companies? content companies know they have got a good thing going. becomes a key hurdle, getting the media players on board. our understanding is they are to amazon,ll content for example. whether they can get that same pricing for what traditional pay-tv players are paying is another story. something that we highlighted last night on the late edition likely theyg west," would have to have a few players on board so everybody feels like, ok, we are all jumping into the ring together. >> all right, a story we will continue to follow. thank you, jon erlichman. we will be back with more. ♪

>> welcome back to "bloomberg west." flip motors is. hoping to do the same thing for electric motorcycles. take a look at their plan to reboot the commute. from the front, it looks like a normal electric scooter, but inside, it's anything but. a big hole in the middle of the frame means that the scooter has as much trunk space as a car. >> it is a vehicle for everyday things. is the visionary behind the electric vehicle start up. they have two vehicles in the works.

they have a take on the commuter scooter. the other vehicle looks like something from a sci-fi movie. part car, part motorcycle, it itl cost over $4000. >> takes all the safety of a car and the convenience of the car and marries that with the romance of the motorcycle. is also electric, is less price. somebody can take a little bit of this and a little bit of that. >> after years of development, and hope to get both vehicles into production this year. y i'm part of this generation , and i am developing a car for me to read for us. -- to do that, he has joined forces with a creative

designer who works for big brands like herman miller and bmw. >> what i'm excited to do is look at the complete package. how does this new type of vehicle become attractive to people who know and ride motorcycles? but also people who never have. >> they are working on the prototype. lessic makes normal cars desirable. thinks that it makes flip ready for the fast lane. >> we are creating a fast vehicle for any type of short commutes. >> really great story there. love that collision animation. all right, it's time for on the markets. olivia sterns joins us on new york. hey, olivia. >> hey, emily. let's get you caught up on what

is happening on the stock markets. you can see the market is mixed. season.r earnings the one stock we are really watching is general dynamics. we will be back on the markets in 30 minutes. ♪

>> this is the early edition of "bloomberg west." i'm emily chang. you can also catch us at our later time of 3 p.m. pacific, six p.m. eastern. now to headlines. deaths in the ukraine after antigovernment protest. protesters were killed after the fourth straight day of protest in kiev. verizon has published its first annual report on law enforcement request. it has received inquiries from companies last year.

just 11,000ved requests in the first six months of last year. frigid temperatures hitting the northeast after the area hit with a major snowstorm. 11 inches fell on new york's central park. there are still scattered flight delays at new york airports. would you pay $2 million to in your house? dear lord. it's a great movie, but that is a lot of money. stephanie ruhle and rick chapter spoke with the imac ceo ought -- at the world economic forum in davos and asked if imax is ing from the rich getting richer. >> they do not have to travel to davos because they can see you

on the screen home. on a serious note, that is a very niche product for a small market. in fact, if we sell 10 of those a year, it is a lot. are looking at revenues that are still $700 million worldwide. " did 20% of the north american box office. this is just sort of an niche. partome theater is just a of it. we have another home theater. we have china, the middle east, and russia. wins a ton of" awards, do you make money off of that? >> we might. not a lot of money. the way we may money is if it is released. for us, we are excited if the film really broke new ground and

used special effects in a new way and that is for imax really takes off and that is why we index so hot. so, i will -- index so high. so i would like to see it when because it's a really great movie, but it was shown off in imax. it is associated with that brand. >> i think that is more important. >> imax movies just a few years ago -- a were in the museum of natural history. they were almost documentary- style. that has to be a big payday for you. >> time flies. it seems like yesterday for me, too. "apollo 13"back to with tom hanks, the harry potter movies. yes, it's a new business model. obviously people will pay a certain amount of money for documentary movies. rings"u see "lord of the

in imax, kerry potter, things like that, that is special. , michael bay film part of "transformers." he filmed part of it with imax cameras. spectacular. >> when i was going to school trying to learn french, guess where i work? >> at imax? no way. soda was this, my popcorn was that. how much will people really pay? they paid the equivalent of $23. in new york city, about $20. we have almost no complaints, because you get what you pay for. it's a really special

experience. if you think of watching a film like "gravity" on a small device or small screen, it is a value. >> there comes a point where people -- will there come a point where people think about imax like -- maybe not apple, but maybe think of you as a consumer technology company? because you are making these home theater systems for $2 million, 250 thousand dollars, and it computes what something like sony brought via television -- bravia television? >> our brand awareness in places like china is higher than in the u.s. in russia, it's a big deal. this is their old view of imax. theater, the big one, the small one, i think that is a test for us. we will see. we would not put our name on it if it was not something really

special and transporting in a way. if it all works, yes. >> do you look to the future and think, how can imax be the name in the home that sony was once upon a time and maybe samsung is now? is different than those companies, but definitely we will look at how we can broaden our name in the home. when you ask about that, you think about things like gaming or virtual-reality -- >> which is not part of your game at all. we have to think about the regular consumer electronic experience. i think apple is a great example. they rethought the experience. culturally, that is how we help -- ceo richard g on. could google have

been insulating its search engine ranking? ♪

>> this is the early edition of "bloomberg west." emily chang. is google trying to punish expedia? take a look at this. expedia results under google the last week. this is according to a german research firm called search metric. it will does not like it when companies try to tame the system. cory johnson, what do you think? >> i think a lot of companies try to game the system. google is in this industry. it did not happen to everybody. priceline, traveler, kayak -- those numbers seemed stable. expedia's shares taking a hit from these news. down four percent yesterday.

me live via skype from berlin, the search metrics president. tell me what you saw on the expedia search results on google. 20% over at fell week, especially on very important terms. they had a significant drop. 25% is no joke. i would imagine a substantial part of their business comes from google. >> yes, definitely. everybody asks google questions. especially in travel, people are really relying on google. not ranking anymore, it it alters traffic. >> i look at this -- i wonder,

is this fairly uncommon? every few months they would have what they call "shuffle. companies that ranked very high would suddenly come down low. -- they call the google shuffle. companies that ranked very high suddenly come down low. the seems more targeted. >> it looks like a penalty. , let's say tywords here were [indiscernible] have tosomething they do. >> we have seen this with companies like rapgenius. with aia went public certain number of search results. shortly after the announcement, the results fell quite a bit on google.

are there things that they can do to show up higher? google is that getting better and better -- hulu.ntioned this is something they did many years back. expedia is such a big brand. they have a good quality company. [indiscernible] >> markets, if you will, talk about other companies. marcus. any companies this is happened to? >> i think there are many companies. google, is google taking care day? the index every joining us via

skype. thank you very emily? >> we will take a closer look at how well shows like "orange is are doing for netflix. that is coming up. ♪

>> welcome back to "bloomberg west." i'm emily chang. t-mobile is hoping to be your next un-bet. the uncarrier is debuting a new visa card. mobilegram, called money, will give customers a way withouts bank accounts

an atm. the program starts next month. netflix reporting earnings after the bell. they have been on a winning streak. the stop stop on a slide. today? see the numbers jon erlichman, what are you watching today? >> it is always fascinating to look at the subscriber numbers. they are getting close to 4 million members around the world, nearly double what that number was a couple years ago. millionber is -- 43 members. can you hold on to this? netflix,tion rate at the company says, has been improving. that is an important part of the story. >> about retention, a lot of people talk about the original shows. is that what keeps people coming back?

is it the fact that your kids can watch "the lion king" a million times a day? >> yes, i think that is part of it. " allge is the new black, those shows, it does create a must see tv option. changed onnterface rocha, playstation, -- roku, playstation, xbox, smart tv's. it's very interesting to look at. they are spending time on the technology, the luck -- the look and feel, as much as the shows. >> despite the focus on the streaming business, the company still has a big dvd business. how much more is the dvd business to the overall business? splitsly, they tried to the two companies and that did not work out. >> no, and analyst said totally

written off the dvd business. this company having neighborhood of 7 million paying dvd subscribers around the country, it generated trigger $21 million of revenue in that stretch. andad 39 bit -- is to abuse -- they had 39 distribution centers around the country. -- they are very much engaged in this business. there are pockets of the country where the internet can the spotty and it's not in your a streamingbe using service. that is why the dvd business continues to be relatively healthy in spite of people saying it's going away. jon, our senior west coast correspondent. last -- many residents are upset

the buses are stopping. they say that it smacks of elitism. charged aes will be fee of one dollar per day, which means companies like google will ave to pay more than $100,000 year in fees. they will also be prohibited some routes. what's interesting -- the city cannot charge more unless they put it to a citywide votes, meaning we as residents would have to vote whether we think this is a good deal. >> when you think about it from the city standpoint, when the up, theyt the bust decided not to take revenue from build the bus- stop, they decided not to take revenue from the bus stop, parking or things like that.

>> but there are residents in san francisco getting the benefit of it. >> they are. but not the rest of the city. only those residents who work there. i think this ties into this notion of income inequality. there are things we see going on in our economy where people working for companies like apple aregoogle and facebook becoming some of the richest people in the history of united states at a time when the poor are so much poorer. by that token, it is having a huge impact on real estate. the real estate around the us stocks are astronomically higher are -- the bus stops astronomically higher than the real estate around it. >> there is the notion that this area is rich with tech. >> the debate, i'm sure, is going to continue. thank you, cory. more after the break. ♪

>> welcome back to "bloomberg west." coming up on the late edition of the show today at 2 p.m. eastern we will bepacific, talking about apple's store on fifth avenue. it was hit by last night's winter storm. we will talk about, joe will cost to fix this shattered glass. that's on our late show at 6 p.m. eastern, 3 p.m. pacific. it is time now for on the markets, 56 past the hour. back to new york. hey,te, that emily --

emily. stocks are mixed. take a look at the opera market. the dow in the red. the s&p, pretty much flat. at the nasdaq, up 13 points. big movements. the olympics around the corner. athletes and companies are gearing up for major sporting events that can have long-term impact on their brands. chris malone is the founder and managing partner of fidelity partners. he joins me over the phone from philadelphia with a look at who are likely to be the winners and losers this year. do have thenk we audio. are you with us? >> yes, i am. how are you? >> great to hear you. a little blip in technology. the super bowl. it is no longer a matter of nailing that halftime ad. what do companies have to do to

capitalize on the super bowl? >> the super bowl is not only the mother of all sporting events in america. last year we were introduced to joe flacco, a company called inter-g --entergy. what of this happens on happens on the field. atloyaltytelook st.com. which brands are positioned to win and which are likely to be at the bottom? the brands that are well- positioned to includechobani. -- chobani. intuit, which plans to give away to a small business. they are running a contest to give away a super bowls..

also beats by dr. dre, butterfinger, and sodastream. gothinking about what could wrong, what comes to mind is janet jackson's famous wardrobe malfunction. what could be damaging to the brand? >> there is definitely a risk. was an example of that. they power the superdome. there was a blackout and that's not the way you want to be a household name. then there is bruno mars, who has stepped out to become a household name. that could have a real pop on .he radar screen >> and what is the impact for the upcoming olympics in sochi? >> the olympics and the super bowl are such different events culturally. the super bowl is all about parties and friends and alcohol

and winning, essentially. the olympics are a much broader appeal culturally and have much from a globalnce unity standpoint. what you see is companies that really want to associate themselves with global unity, ringing people together, the thatics is a great event has more meaning culturally than the super bowl. it has a lot greater meaning than sports. >> we have to leave it there. chris malone, thanks for joining us. " money moves" with deirdre bolton starts now. ♪ >> welcome to "money moves." we look at alternative assets.