>> welcome to the late edition of "bloomberg west," the global technology and media companies shaping our world. our focus is innovation and the future of this mess. a big week in technology. amazon,facebook, yahoo!, all reporting earnings, some disappointing. google announcing it is selling its motorola handset is missed to lenovo. microsoft getting close to naming session at della -- naming the ceo.

tom perkins, the cofounder of geithner perkins, wrote a letter to the wall street journal, comparing the war on the richest one percent in america to the persecution of jews in nazi germany. he joined me to apologize for that comparison, but not the message. perhaps the most talked about part of that conversation was his watch. take a listen. >> they got into a conversation about the idiocy of rolex watches. why does any man need a rolex watch? it is a symbol of terrible values, etc.. well, i think that is a little silly. this is not a rolex. rolexesbuy a sixpack of for this, but so what? >> he could have walked a few six packs over rolex-- of rolexes with that watch. joining me is an early-stage venture investor. i know you have been following

this all week. what do you make of perkins' comments? anything, if possible, i find him more offensive than i did earlier in the week. it was offensive the first go around, and now it is cartoonish. he walked back some of his most egregious comments with respect to the direct comparison to the persecution of the jews in nazi germany, but he went off the ranch with all of this other commentary. stuff,t socioeconomic but you asked whether or not he is connected to the economic into a, and got conversation about underwater airplanes and six packs of rolexes. either he has no grasp of how to construct a sentence, or he is completely adrift. >> so much feedback. the vast majority of people agree with you. some people have come to his

defense. >> oh no. >> i want you to listen to another thing he said. this is an argument that has been made over and over again, just now in this specific way. take a listen. >> it is absurd to demonize the rich for being rich and poor doing what the rich do, which is get richer by creating opportunity for others. >> does he have a point? [laughter] >> that is just remarkable stuff , you know? it could go on posters. his incredible willingness to take full ownership of everything that happens in the economic world. a friend of mine was particularly upset with a comment that was related. it said, i have created all these billionaires. that is such complete crap. the reality is, he put some capital toward incredibly

skilled people, he and others who worked to do one of the hardest things and economic life, which is to create an entrepreneurial point and grow it to the point where the founders become wealthy. at the notion that somehow he is the one doing this, through his intelligence and creative powers -- if you cannot see the role of luck in all of this, that you were in the right place at the right time, and the element of luck and independency, shame on you. i cannot imagine being that wrapped up in your own ego that you cannot even imagine there were other things going on than your own skill. >> perkins aside, what do you make of the tensions that have been flaring up in san francisco, the protests against the google buses, burning buses in effigy, throwing rocks at them? rent is going up faster than any other city in the world, in the country. i do not know about world. the worldt know about anymore.

some crazy things right now. that i completely understand. there is at least two levels. one is this incredible disparity, haves and have-nots, the phenomenon of almost a lottery driven society. i am in the right size and have the right paper. i never is worth millions because i happened to put money -- i had early employee stayed in a small start up. this feels unfair to people. they see different strata of society created as a result. that bothers people. there is also deep societal unease with this idea -- not just that, but the structure of middle-class economic life is changing. the bargain that we work hard and i grow in this country and my labor is valued -- i labor may no longer be valued. maybe the thing i have been trying to do is no longer relevant. that rapidly turns into dissent. --are seeing that with this these conflagrations in the streets. we should not be surprised that

is happening. >> the ceo of salesforce created a multibillion dollar company, based in san francisco, has done something where he gives one percent of equity, profits, and time to philanthropy. he came out to "the wall street journal," saying he thinks the google buses should be taken off the streets. he says, if you hang out in the mission, i come every five minutes. they have to be massively regulated. we have to get them on our streets. our streets. what do you make of that? >> i applaud him. there is far more going on, many of which are not public. a remarkable success, remarkable in terms of supporting philanthropic causes as well as bringing people up to see some level of success in their own economic lives. i agree with him. he is pointing out things that deserve to be pointed out. we need to be careful about the symbolism of the actions you

take and what it tells people about the privileges they can and cannot have, depending on where they got lucky, go to school, and work. really important things to point out. otherwise, people would be oblivious to them. >> google has become the poster child with the buses, but apple and facebook have buses going down to silicon valley. we know the leaders of these companies, the ceo's, give away lots of money. what is the responsibility of the companies, of the employees, to the local community? should google employees or google somehow enable their employees to do more? >> google does, to be fair. google has matching programs. money you donate to other causes you believe in. they are one of the most aggressive donors, directly and indirectly. the question is whether or not these kinds of highly symbolic

things, like creating parallel transportation systems -- what does that tell people about living in san francisco? it is one thing that i know there is someone behind this gate who has an expensive house looking at the golden gate. that does not get robbed in my face every day. and i see a parallel transportation system that brings people to work, that really bothers me. i think there has to be some give here. you are paying for the bus stops. there has to be more. or has to be blending of this with the public services. otherwise, you risk more serious confrontations. >> what do you mean by that? obviously, these buses are a few of many perks employees get to convince them to commute from san francisco to silicon valley. but can this divide be healed? and what should be done to fix it? divide can sure the never be entirely healed. it is in the nature of this

lottery phenomenon, where you have people made fantastically wealthy. we're not going to start handing out stock to everyone who lives in the bay area. that is not going to happen. you'll always have this envy. that said, when you start creating infrastructure, doing things like saying, the existing bus system does not work well, so let us do this -- you could make existing transportation systems good. what about free wi-fi on existing buses? what about enhancing the existing system, so they become a legitimate alternative for people who are not all turned -- not employees of google? i think you will see more blending of these services. google has a history of doing these things, jumping on what is needed, and blending the best into something else. that can happen even in public markets. the expectation is, you will see this bleed over to existing infrastructure, and not get a better version of san francisco public transit, it has that is

absurd. >> hopefully some of those people are watching bloomberg. stick with us. we are talking microsoft after this quick right. -- quick break. ♪

>> microsoft's board is preparing to make satya nadella the next ceo, and is discussing replacing bill gates as executive chairman. jon erlichman has been covering this story. what can you tell us about the timing? when might this be announced? >> they are very far along in this process. we know they could announce this as soon as next week. there is a team in seattle, at the super bowl this weekend. we are not sure whether this will complicate or slow things down.

they are looking to put such a in -- put satya nadella. theo not know whether person who is leading the search will step into the chair role. >> the potential board shakeup -- what would gates leaving the chairman position mean, assuming he continues as a director, just not as the chairman? >> right. i think when our story came out, a lot of people wondered whether he would be that much more removed from the day-to-day activities of the company. one would think he could end up consulting on a variety of different product initiatives at microsoft. one area where he has continued to lend his time over the years is, to example, search. there is a possibility that a role without being the chair,

maybe you get him sitting down with people like satya nadella, talking about the product less caught and be up in what you have to do as a chairman. wexler we will be watching through the weekend, through the super bowl. bloombergbring in our editor, who predicted satya nadella would be back. this is your chance to do a victory lap. ,ecember 13 last year, you said "i think it has to be satya nadella. i know the board wants to show someone from outside, bring in fresh blood. but ultimately it has to be him." why? >> i cannot do a lap with my microphone, or i would run around my chair. it has to be the right

combination of someone well- liked inside the company, which is hugely important. -- yout somebody who don't want someone who feels like a hatchet man. it had to be someone who was about the future, not the past. that meant they were summing -- coming from cloud and services, not from office or windows. that tips to nadella. and it had to be someone who knew where the bodies were buried. you have to have a notion of what you have to do, and not be frightened by this organization, which has an incredible history and its founder and chairman involved. it felt to me all along the company was angling for an outside candidate, i think the triumph of hope over experience, as oscar wilde said of second marriages. , at the end of the day, the best inside candidate. it seems to me this was where we

were going to end up. i am pretty pleased. i think it makes sense. >> a lot of people agree with you. others think it is too inward thinking. does this guy have the charisma to run a company like iker soft? -- like microsoft? >> i am speaking from limited data, but that has never let me stop me in the past. -- let that stop me in the past. i would say absolutely. certainly, he will not be as easily parodied alice -- as ballmer was, that that is not an attribute. we will not see monkey boy videos, which >> cory johnson's heart. cory johnson's heart. going to be anot lot of protection of legacy products. that is not his legacy. we need to put

millions of dollars into office just because we always have. this is going to be much more about the future of the company and where we need to go. given his reliance on cloud services, as opposed to bringing in someone good from the outside just to say we did. >> we will be waiting for an announcement any day. it sounds like they are close. stick around. we will be talking amazon. do not go anywhere. ♪

>> amazon may raise the price of its amazon prime number ship, which currently costs $79 a year.

the service includes endless video streaming, and free shipping. to $40 a year. what impact could this have on the bottom line? orderople like me, who many, many things from amazon a day, this is a good deal. but what about all of the other people out there? is amazon going to lose customers because of this? >> no, because they have managed to wipe out the entire retail landscape, so there are no stores anymore. there may be a couple out there. i do not think they are. it would be heartbreaking to me. this is one of those essential utility services, in terms of my own family consumption, in terms of video and other purchases. nevertheless, it always struck me as strange that the price has sat flat since i think 2005, around the launch date, and has

not changed despite increases in shipping costs and the enhancements that have made to the video service, the netflix- like service. the only surprise is that it took so long. i do not think it is going to change anything. it will be a lot of noise. but the appeal of the cash that millionth, say, 20 subscribers, and you add $40 in additional subscription fees -- you are talking a billion dollars incremental revenue. that is hard to turn down. >> what impact could raising this price have on the bottom line, have on the business? >> the explanation they gave was that this helps offset those shipping costs of moving everything around. the amount of stuff you can buy on amazon today, versus when they first rolled out amazon prime. we know why is, now they need those darned drones, you know what i mean?

something that is not going to cost you the same you pay to fill up the tank. that is part of the story. this is a potentially savvy move. drones, we know, are years down the line, it ever happened. what are other things amazon can do to offset shipping costs? people talk about them by ups, fedex, the postal service. realistically, what else can they do? >> they are trying to move more logistics centers closer to the larger populations of people. they have already done a lot of that, so they are not pushing things as far across the country as the early days. that cuts down on some of their costs. ofdoes swap some fixed costs storage and inventory for some variable costs of what they spend on shipping. nevertheless, they can adjust their cost structure a little bit that way. i do not look for drones anytime in the near future, but it is at

least interesting. it shows they are trying other stuff. i think an increasing amount of the value people see in amazon will be services. there are services that are not part of prime, but amazon prime competitor with netflix. the shipping is free, and i would have to pay for prime, or the other way around. you are getting something for a low price, compared to netflix. it is a pretty incredible bundle. >> what about the video service? they could spin the unit off and make it a separate company. >> they were asked about that yesterday and dodged the question, like all questions. i think it is an important development. endthey do it on the lower so people do not freak out at a $40 increase. $99 or $100. you could separately use the

streaming video service for a comparable price to what netflix charges. maybe they go lower. potentially, you could get more people to join prime. they say, you are using our video service for this much more per month. you could come into the prime family. there is a huge opportunity to take business away from netflix in a hurry, if they were to split it out like that. this pricing change totally plays into the idea of netflix. i am sure bezos has netflix and his sites, for sure. >> what do you think of that idea? the think that is exactly direction they are going. you are going to see some unbundling of services. amazon has traditionally gone after their top competitor will stop the bull's-eye is now on netflix. the shots are going to start to come. >> thank you both. ♪

>> we focus on technology and the future of business. disney and dish network are close to a deal to settle litigation over dish's ad skipping technology. the deal could include compensation to disney for subscribers who skip commercials. disney is also involved in legal fights with cbs and fox. sold out to new york city ahead olive picks. they are working overtime to add capacity. has evenme court

agreed to hear the case. twitter is buying 900 patents from ibm. terms were not disclosed. patent dispute, ibm warned of possible infringement of at least three patents. and 95head nine patents pending patents when it went public in november, a low number for a top tech company. the secret filing for an ipo, beating larger rival dropbox to the lunch. another $200aised million in vc funding. what is next in the battle of the boxes? every leafy -- ari leavy covers technology for bloomberg. leavy, was, aaron here on bloomberg west a year ago, talking about a potential ipo. the timeframe would fit into

what he gave us. listen to what he had to say. sustainablerm company, an ipo is in that path. >> you told us 2014. are you still on track? >> i would totally use those words. >> she is much funnier than i am. >> it is hard to compete. softwareour enterprise companies building in the cloud. that is the way people are doing business now. yet the way they have been buying is the old stuff. if you look at workday service -- these are companies that have gone public in the last couple of years with evaluations. and hitting price to sales of like 35 times, relative to a traditional enterprise company, which is like to to -- two to

four times. >> is this about reading dropbox, or is box ready? significant,that in terms of the timing. they are both playing into really big markets. we do compete. they have very different products. the products collide. it looksgo public when like they have a story they can tell to investors. >> how well do we think locks -- box is doing? >> the numbers i hear are somewhere in the $150 million revenue. we have stayed away from reporting, but have heard these types of numbers. not profitable. lots of employees. we have heard a thousand employees. they are clearly scaling themselves, scaling their engineering, for where the

market is headed, even though the numbers may not show it yet. evie is ationed aaron l funny guy. he is also a prolific tweeter. not all are serious. he was speaking about the potential new ceo. he said, understands how to build platforms, gets the cloud. i know he is from seattle and followed microsoft a long time. he also has cheeky tweets, like this one. funny, because so many ceo's are scared of saying anything, and he is the complete opposite. does that make the company look at her? -- look better? i know the investors well and talk to them frequently. what are the risks? does not fall into the top

10. he is an asset they invest in, one of the reasons the company has been able to capture such a big valuation. he is a magnetic personality and someone investors believe in. remarks may be, sometimes -- those may be things he will have to reel in. i am sure the lawyers are all over him. but this is a new environment. the ceo's of yesteryear are not used to this avenue, this ability to express themselves so openly. he is of this generation. >> they founded this company in 2000 5, 4 cofounders. they are all still together. that does not happen often. >> a solid relationship. the cfo and aaron went to college together. >> i think high school. they have been together a long time. ported the filing for an ipo at some point this year. for an ipoly filing

at some point this year. we turn to a san francisco startup changing the way game designers bring characters to life. this is a company that has developed software that captures a person's facial moments through a webcam. the movements are projected onto a 3-d character. we spoke about how they make animation easier. >> we were the first ones building machine learning into animation. has been very time-consuming work for a long time. >> it involves sketching body parts individually. >> it involves a lot of people that tweak every single keyframe of the animation. everything move from automatee learning to characters, like we are doing in front of you. >> you created a 3-d character of me. you took a few pictures.

if i raise my eyebrows or smile, you can see it happening. i am just looking into the webcam. >> exactly. it is taking the video from your face and is able to extract the emotions you are experiencing, and translate those in real time to the character, like i am doing. >> hello. how do you actually do this? >> we use a lot of machine learning technology. we are able to run this in real time, on a game engine. this was a project in collaboration with amd and unity. translate the real-time emotion directly on the character. mostly game developers using the software right now? >> correct. also people that do independent animated films. film it being used in widely yet, this kind of technology? >> this is really the bleeding edge. the technology is just coming to

the market right now. we are very early on. we only launched the first version a few months ago. we can put it in the pipeline for bigger productions. it is so much faster, real-time time instead of days or weeks. conversationsd with film studios? you mentioned independent filmmakers. i do not understand why they would not want to use this. what are the drawbacks? >> if you have a huge budget and are making the next pixar film, you have the luxury to have hundreds of animators work for you. if you are an independent filmmaker, you do not have those means. developersor game want to bring more emotion into their game, into their character. they want to compete with the big giants. >> there has been so much tom -- game industry

lately, laying off 50% of the workforce. how does this impact developers? going to see more animated films coming out of smaller teams we have never heard of. we have the technology to compete and to bring new, fresh, and crazy ideas to the market. will be more small teams making an impact into the game market. ximoy interview with the miim ceo. the tribeca film festival is getting tech savvy. ♪

>> and today's new hollywood, the tribeca film festival is in april in new york, but this year, the estel is going interactive. jon erlichman, what does that mean? >> if you think about film festivals, they are a great place to talk about film and different ways of film making, but also a great place to explore new ways of filmmaking with things like technology. rebecca had a buying competition last year. john patrick, the president and chief operating officer of tribeca enterprises, which is the parent company of a festival. you announced about a music video competition you are going to have this year. what are you enabling filmmakers to do? a we have partnered up with company called interlude, which has interactive filmmaking technology. we are going to allow anyone around the country to create an interactive music phone. they can use songs from damon alvar and -- songs from great

recording stars. they will create short films using this new interactive filmmaking technology. >> you had a segment earlier about cool 3-d animation tools. you think about go pro and the fun technology through something like that, or shutter stock, they able to use stock -- being able to use stock photos easily. how is this changing the way films are made? >> it is a revolution that is now hitting. it. our partner in this new filmmaking competition is lincoln motor company. it was exhibited using the oculus rift technology. technology.mmersive go pro is changing the whole culture of filmmaking. it is the idea that people are being empowered to tell their

own stories. you want to help facilitate that. we are looking forward to april, when we can bring those filmmakers to tribeca and shine a light on them. >> for the film watcher to have a different experience, i think about reading choose your own adventure books as a kid. i wonder how that changes the film viewing experience, if we are not all watching it in the same way. me be the ending is a little different for all of us. >> it is this blending of game making, filmmaking. where does one start and one and. -- one end? we have seen how this distinction and hard and that hard line between games and films has started to blur. we are really embracing it. we think it is a great opportunity. we think that is where the audience is going. you are finding creators love that flexibility and what these new technologies can do to help them tell stories.

>> let us go from film production to film distribution. that is part of what the tribeca business is about. we have moved from the theater. we're still going to the theater, but on demand. netflix is making its own original movies. are these good, helpful changes for the film industry? >> it is. the pace of change is tremendous. if you look at it three or four years ago, netflix started this incredible revolution. when they launched their streaming service, they give distribution and visibility to a lot of independent films. when they first started out, they were not doing deals with the big studios. over the last three or four years, they have shifted to original programming. they still have a huge film offering, but they have shifted toward originals and tv. inare seeing this shift distribution, this constantly shifting landscape. a lot of great opportunities.

we believe that brands like tribeca can help the audience sea ofand navigate this content. we believe that is the next wave. how do you cure rate and kobe viewer find what they are looking for? ask about 10 seconds left. the idea of going to kickstarter to fund films -- when are we going to know this is a model people can lean on? >> i thought a statistic recently which is something like $5 billion has been raised on kickstarter across all industries. zach rap just wrote a film to sundance. it just sold. you have nicer views, and people like the film. not only is kickstarter a great way to lose money, it is a great -- to gain money, it is a great way to go to an audience. hopefully, the audience will help identify the projects that should get the financing and visibility. >> cool stuff.

john patrick, chief operating officer of tribeca enterprises. football on just super bowl sunday that grabs viewers. of course, the commercials, which we cannot wait to see, unless you saw them already on youtube. ♪

>> if only i could make this message go viral. >> ♪ you are doing it darling changing the world one sip at a time she done it. so to stream ♪ -- soda stream ♪ top three most watched super bowl commercials on youtube so far. or than 70 related spots have been posted to youtube. these teasers or ads have been

watched more than 105 million times. joining me is a youtube trend expert. why, if it costs $4 million for television,spot on with a put the commercial up a week early? >> it used to be the next day, water cool conversation -- watercooler conversation included the ads. aw, there is one -- there is way to get people excited and engaged in the content, extending the conversation before the game. >> some of these are actual commercials. advertisers are realizing there is value, different strategies online, getting people excited for the big day. >> how do viewership numbers of the super bowl compared to the numbers on youtube? >> as of today, the videos have gotten 105 million views. as of today last year, videos on youtube before the super bowl only had 34 million.

>> that compares to 110 million views for the super bowl on television. so not bad. you are doubling viewership. >> you are doing well. >> let us talk about the top three. number one, my favorite. take a listen. you let her go -- lead herhome home when you let her go ♪ a little golden retriever puppy, you cannot lose. or labrador puppy, whatever that is. >> they only put that add up two days ago but are up 24 million days -- million views. the song was a breakout on youtube as well. they really understood their audience.

>> there was the hyundai commercial, number two. number three, scarlett johansson. >> what is interesting is how early some of these brands have gotten online. doritos has been doing a campaign since november last year, getting an early, with lots of different fan-made ads. a lot of consumer goods started taking a bit of a leaf out of the automotive playbook, looking content on early. it is something car commercials were doing first. ask folks like and did a super commercial. i think it is a teaser. -- >> volkswagen did a super commercial. all in one. we do not know what they are going to come out with. they still have one of the most memorable super bowl commercials in the last few years, in my opinion, with the little kid who could control the volkswagen. stickiness creates great ads.

the fact that we are talking about that years later shows that a digital strategy works well. you can share it with your friends. >> the actual commercial will be something different on sunday? >> we have to wait and see. >> we will be watching. always great to have you here. watch the full budweiser commercial. it is so good. it is time for the bwest byte. what have you got? >> friday. you know i love them. this is something i hope you love. one is our number. or is only 13-d animated version of emily chang, which you saw. one 3-d is only animated version of emily chang. >> it was really cool. it took a few pictures of me and came to the office and showed it to me. we did a little tweaking here

and there. right there, i had a 3-d animated version of me, which is a good question for you -- why aren't the film studios using this kind of technology? it certainly seems like it is pretty easy. >> he made a good point. when they have big widgets, they will spend more money. there has been competition for the world that x are built, i having cheaper, more accessible technology. before hollywood uses it in and bigger way, we can't have it with our morning meetings. they be you can join us in your 3-d version. this will rival the cory doll in the office. >> maybe we can get them to make an animated movie of all three of us. what do you think? >> love it. >> i mean, i would watch it. thank you all for joining us. it is friday. have a wonderful weekend. enjoy the super bowl. ♪

>> welcome to "lunch money," where we tie together the best stories and interviews in business news. i am adam johnson. take a look at the menu today. time warner cable says charter bosch bid -- charter's bid is a no go. we will hear from the ceo. it is the first time he has spoken publicly since charter made that bid publicly. cam newton tells us how he stays financially stable. chairman bernanke's last day as the chief. what words of wisdom does he have for us? in world investors moving money , into the bahamas. we will explain why. and media super bowl ads.