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'm emily chang. every weekend we will bring you the best of west. official makes its after a long search. the dallas is the former head of

microsoft cloud. to say abouthe had his plans. >> i would say the first thing i want to focus on is to remove any obstacle to innovation. innovation of on things that microsoft did uniquely do. also stated that no gates will be stepping down. but gates will stay very involved with the company asked technology advisor. take a listen. i will have over one third of my time available to meet with product groups and it will be fun to define this next round of products, working together. >> we assembled a special roundtable to discuss

microsoft's new options. our editor at large cory johnson thesen erlichman join microsoft experts. >> i spent a lot of time working with satyam over the years -- satya over the years. combination of strong technologist as someone who has a strong vision and focus and is in his focus. i wouldn't think of him as somebody who just focuses on technology. it is all about how we bring technology to market and how we actually transform the business as a result.

if you look at what he has has a on, i think he great track record and he has done a lot for the company and there is a lot more he can give. >> how did he get the job, kurt? i'm the persone to ask. i think he is probably the right person for the role. i think they looked at a bunch of different candidates. he is a great internal candidate. he knows the business super well. he is on board with that. he has a strong relationship with other leaders in the organization. he is not shy about challenging the status quo or it i think he will ask questions. >> you and i were both guessing that it was not dallas for a while. for at it was nadella while.

>> this was like having evan jack on your board if your twitter. make changesng to on the board you might as well have an internal as an external candidate. tied toy someone who is the fastest-growing segment of the business, which is cloud services, enterprise services products. his contribution is huge. it was a natural fit when she made that change. >> kurt, let me ask you, having worked with him for two decades, did he stand out as a rising star? was any indication early on that this could ultimately be his destiny? >> i think he has always been a strong reorganization man. i think is a very good team

who can bringrson good consensus where there is conflict. if you look at what microsoft is looking for, i would say over the last few years he stands out as a guy who has the right mix of talents for the job. >> kurt, give me an example of that. there are all these famous stories about microsoft fighting against microsoft. satya made some really strong choices. how has he been able to navigate those things? could you give any examples? >> i think a piece of it is the strength that he has in that new technology vision to begin with. bring up theld discussions we have had about reat role as your -- azu should play.

there was a real discussion with satya about the evolution of that. that brought us closer together. here is a guy who can really work with us and find out what the right answer is and make it happen very it i think that is a strong example. >> john, what is it that they nadella akes satya strong ceo? what makes him special? things.ple of first of all this idea of him being able to be standing next to an area of growth, an area where microsoft can say we are making inroads. the second thing being his connection to the world of startups and silicon valley, where technology is going. you put those together with his willingness and i go back to -- thisment he made

idea of being willing to cut down walls and shift around the politics of microsoft to actually get wings done. i would say that is a one to three combination that helped him get the job, certainly. igerl, disney ceo bob joins us next. we get the latest on disney business. ♪

the best ofack to west warwick focus on technology and the future of business. disney had a strong quarter thanks to its animated hit "frozen." our correspondent jon erlichman sat down with disney ceo bob he started by asking him what kind of counterprogramming will appear on abc. >> i think it ends up being a good opportunity for us. abc's lineup on thursday nights is pretty strong, particularly with gray's anatomy and scandal. i don't know what it will be next season, it has not been determined yet.

the abc primetime audience tends to skew more female than male. it is a great opportunity moving the cbs entertainment shows out. they had success on the night really early with the big bang theory. moving that out so it does not compete with our shows. to that will probably help us in some form. i don't know, it is too early to speculate whether there is going to be tremendous counterprogramming. abc's strategy is what it is, regardless of the competition. themnows what works for and where their audience is and will continue to go after it. >> we are reminded of a time when there were a few reasons to be watching live tv. there is some marquee events that people are still tuning in to. the grammys are an example, the super bowl is an example. you have the oscars coming up.

would you be surprised to see record ratings on abc for the oscars? the, well, i am certain oscars will do well. a lot of the films in contention were released late in the year so there is more interest in them. yes, live tv is definitely something that is attractive to audiences, but there is a lot of tv and video available to people today, too. the audience is much more fragmented. it is a tougher competitive environment, maybe the toughest it has ever been. challenge is a lot greater today than it has ever been. >> just a final broadcast question, in the world of late night, jay leno is handing the baton to jimmy fallon. does that open the door for any marketing opportunities with jimmy kimmel, abc, anything you have thought about on that

front? >> i know it opens the door and creates a need for us to aggressively remind audiences that that only is jimmy there already, but that show is really good heard you will see more support for the jimmy kimmel abc but acrossat a company because the competition is changing and it is clear that nbc is going to go after the incumbents in a big way, not just nbc but cbs as well there it we love the success of jimmy kimmel now that it has been moved to the earlier time. slot. >> whether it is broadcast or cable, the willingness of the pay-tv providers to a you for your content. cable consolidation is a big thing these days. charter,er cable and are they coming together? is that good or bad for disney? >> it doesn't have much of an act as far as we are concerned.

we are abc, espn, disney. for instance, networks that are not only really well branded but in big demand because of their product. so whether it is consolidation or ownership of existing multichannel businesses changes, we are still going to be in demand as we have been. you cannot go after the multichannel subscriber about offering them our product, so it does not mean that much to us. there are apps that are easily accessible across a number of forms. you have talked about your strategy of games and how mobile has affected that. maybe you can clarify what we should be thinking about with respect to disney making games and how mobile has changed your strategy. >> it has changed it a lot, because when we entered the game market we entered it a few times , there have been fits and starts. about six or seven

years ago and were more focused on console games which are not mobile in nature. they cost a lot to produce and in termsd are limiting of people's access to them. we have seen mostly because of the development of smart mobile devices, phones and tablets, a huge increase in the mobile in that space. tremendous increase. it is really where the games market is today where we are concerned. we have shifted our strategy dramatically. mostis probably the obvious. interestingly enough, infinity is a game that is designed both for the fixed platform and for mobile. it is the first game we have rolled out that is playable on multiple devices. >> this is a game that has a variety of disney characters. up.can find them pairing it uses a number of disney -- it

uses a number of disney characters, basically toys or figurines with the tech elegy platform -- with that technology platform. it gives the user ability to mix and match our characters. so jack sparrow from pirates can be in the game with lightning mcqueen from cars, for instance. we think the trend in mobile will only continue. it is where we have to be in the space. television or film entertainment, by the way, is just as important to be there from a mobile perspective. we are going to continue to be very aggressive in that regard, not just for tv, but for movies as well. >> john ehrlichman with disney eo and chairman bob iger.

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to the best of bloomberg west, i'm emily chang. twitter's earnings report as a -- as a publica

company were not so great. 241 million active users. what does all this say about twitters business? i spoke at a special roundtable with bloomberg to tripping editor dave kirkpatrick and others including our editor-at-large cory johnson in our studio. >> if you want to some that all up, it is user engagement and thepeople are using it. numbers are not solid. it does not look like the explosive growth of the stock valuation. you and i use twitter constantly. >> we are power users.

>> in this world where twitter looms large, where media and advertising loom large, the rest of the world does not think it is such a big deal. a listen to take what he had to say. he expressed a lot of confidence. he was very emphatic about his confidence that they can tweak and change the product to engage the mainstream user. >> integration of those richer media experiences helps make it broaderccessible to a audience. we have taken steps in that direction with our launch of media forward. we will continue to make twitter a more visually engaging medium. >> they know twitter is not as accessible to as broad an audience as they want to reach. can they do it? >> i think there is no question that there are significant changes coming.

>> they have arty gone through a big redesign. -- they have already gone through a big redesign. one picture started to show up, it was a totally different experience. there are a lot of things they can do over the coming months to do more. >> my mom is still a big face accuser. she still does not quite get twitter. they've it, perfect question for you, author of the facebook effect, can twitter be as mainstream as facebook is today. >> thank you for saying it because i was going to bring it up myself. that is not to say i am not a huge fan of twitter. i don't use it myself quite a lot, but i think a lot of people fundamentally overestimate the potential of twitter as a is ms. when they fall into the habit of comparing it to companies like facebook or google. one of the big differences between facebook and twitter is that facebook has astonishingly

accurate personal data to base targeting for advertising upon. twitter does not have nearly such assets, not to mention, they have a way smaller community to do it for. the thing i have to throw out there about twitter, i am not a financial analyst, not strategy analyst, but the fact that twitters valuation was by some measure double that of facebook's, which is an astonishing valuation. facebook, which is very profitable and also growing, 17 times, which is a high valuation, but twitter is so much more highly valued than any of the other major internet companies, i think it is in precarious territory, considering the scale of its long-term opportunity. >> twitters user engagement growth is slowing down, but they are making dramatically more revenue per user. as a business, how important is increasing growth in users?

to get more from those users. long-termh over the will slow down. there are only so many people in the world. the fact that they are getting more revenue can only be a positive, but the fact that u.s. sequentially was down to 1.9%, as the worst growth they've ever had. let's say in the fourth quarter of the last year they got more mainstream press than ever before. we somewhat tweets and mentions of twitter and the twitter ipo gave him tons of publicity. if they only added less than two percent growth in the u.s. in terms of number of users, that is a bad sign. photos began to. they did not at those changes and improve user experience. of their users are

international. can they figure out how to monetize the rest of the world that is using twitter? >> there is a lot of question there. i don't think there's any question that there is a lot of low hanging fruit for the twitter business to scoop up. it takes time to build that at is this internationally and they're doing it successfully on a small scale. that in brazil with our company and i think twitter will do some really interesting rings with the rest of the world. i do think what we're talking about is very scary. it is early days in these companies and they are not moved sailing at. quarter per user last has great disparity. out,w does the story play david, the next few quarters for twitter? how do they look like? >> i think it will continue

losing money. they have a pro forma non-cap traffic. these people are investing in not making money. that is going to continue. investing is assuming that they will have quarters like facebook has recently had. i don't see that looming in the near term. >> bloomberg contributing editor david kirk patrick and mike arner cory johnson. two of silicon valley's top vcs are leaving to start their own funds. two women are stepping out on their own. ♪

>> this is the best of bloomberg west, i am emily chang. in a field dominated by men, two female venture capitalists are stepping up to start their own firm. cory johnson and i sat down with both of them to talk about why they launched the new firm. >> i think both jennifer and i felt like this is our entrepreneurial thing. it is like when you see a vision and you share it. we thought this is a great time in the market to be focused on seed and early-stage investing

around mobility as a theme. to work with somebody that you have known for over two decades. >> was this a difficult decision for you, jennifer? >> no, i have been in the business for 17 years and it is a great opportunity and time. frankly, if not now, then when? we have been focused on our careers as apprentices and now game int the top of our our respective firms and we thought this is an opportunity for us to do something different and start a different kind of firm and focus on building companies for the long-term. >> so you're saying now is the time. it is the the time for fundraising? what is the fundraising environment like now? to havee very fortunate successful careers and right now we are founder funding.

we have capital from jennifer and myself. we have more to last three or four years. that asbeen heartened we started to talk to people we have been getting proactive and raising from people we have worked with as entrepreneurs or investors wanting to invest. at this point we're excited to be investing our own capital. are theystitutions -- looking at this is a time to write checks to venture capital? you hope so, obviously. >> we are not fundraising but our colleagues are fundraising and we think it is a great time to put money to work in the industry. there is an explosion of opportunity in the mobile phase. we define it much more broadly than we have seen in the press in the past. we think that mobile will infuse in touch every ask for act -- touch every aspect.

>> it is no secret that the venture capital industry is dominated by men. only 11% are women. now we have two women founding a firm together. how do you look at the fact that both of you are women? >> well, we are women. [applause] [laughter] thosek we want companies happen to be founded by men, so we will equally back men, women and people from all different experiential backgrounds and other aspects. a diversity having

of views in the boardroom when you're trying to tackle tough challenges and the creative, having different perspectives, whether that is from operating or investor or gender respective's, there are tons of studies that show that. >> do think the fact that you are women gives you an advantage because of your different perspective? obviously different from the majority of the industry. >> data shows that having a different perspective in the boardroom, particularly around gender, which is something they have been able to study now both privately and publicly. it increases the chances of success. you overlookr of the reaction of mail colleagues? >> i have done a lot of investing in the social commerce space. one example would be birch box. subscriptionry,

commerce. people wanted to know people would pay $10 a month for things they could get free if they walked down to the department store. over 300,000 people pay $10 a month two years later. examplese less obvious ? i wonder if there are things as well. perspective,duct we have seen some companies that have made some seed investments in companies that do multiplatform approaches. they are companies that are taking advantage of your social graph in a unique way to engage consumers. anywayy are doing it -- womenn in general in general very much value word-of-mouth for recommendation for things much more than men do. they make go look online.

-- they may go look online. take advantage of that word-of-mouth and how the integrated in their technology. one of the things that is interesting about mobile is that it is very user interface focused. women are often on the fly, particularly moms who are living off their devices as they drop off kids and run errands. being able to have a simple user with sliding mechanisms. ,hen you look at opportunities we take that into consideration. i know one company that was doing it from a hardware perspective. when they did the prototype, they had an all-male team. when the woman that was testing it was poking at the phone with her fingernails, they had to

redesign. withat will be your focus all those trends out there? what are you going to be looking closely at? >> our focus that unifies all the way from enterprise to the consumer application layer is this mobility everywhere theme. whether it is a security to i t healthny applicationt is an but they have been very acquisitive in the mobile space because that is where the action is. those were the founders of aspect ventures. is tech really responsible for rising rents and housing prices in san francisco? we come back with some pu surprising results.

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>> welcome back to the best of bloomberg west, i'm emily chang. is technology responsible for rising rents and housing prices in the city of san francisco? the answer may surprise you. chief economist joined me for the answer on the question. >> we're definitely seeing rents rise faster in san francisco and other tech hubs than in the rest of the country. tois much less affordable live in san francisco then pretty much anywhere else. ae differences have been here long time. the affordability gap that separates them from the rest of the country has been here long before you and i were using e-mail. >> so you're saying it is not necessarily technology. >> it is certainly not the whole story. what we are seeing across these tech hubs is that they were were to places that

expensive to begin with, places that had good weather, universities, other industries that were there. most of the gap in home prices we're seeing today between tech hubs and other metros have been in place 25 years ago. >> so you're saying technology has nothing to do with the rising rent in san francisco? >> it is a big part of economic growth in the bay area and a big part of demand. housing prices as a result of strong demand and tight supply. certainly the technology industry is helping push up rices and rents. but the other piece of it is supplied. san francisco is an incredibly difficult place to build new housing. other places around the company have morethe country room for construction. the tech industry that is fueling demand for housing.

and housing is rising because san francisco is san francisco. we are only so big. it cost so much to build new homes and the regulatory issues surrounding construction are so great. inwhat makes it so extreme terms of housing is the supply, both because of geography. we have the ocean on one side and the bay on the other and also because of regulations. it is for difficult for developers to build new housing here. as a result, we see 1/10 of the construction and seven cisco that raleigh, north carolina has. it is very hard to have housing be affordable if little new construction is built. >> what is the surprise in this report to you? >> i think one of the surprises to me was how much that cap in affordability existed tony five years ago. it is hard to get that historical perspective because

they are so focused on what is happening now. most of the gap in housing costs between big tech hubs in other metros was in place in 1990. that was surprising. >> how much bigger has that cap become in the last 15 years? >> it has gotten bigger. home prices have risen more in tech hubs than in other markets. the gap has been growing. and without a lot more construction it will probably continue to grow. many of them have tight supply and that is a recipe for escalating home prices. >> what you think is the responsibility of tech companies and tech employees in this issue of tensions between the haves and have-nots? >> i think it is a eager issue than just the tech industry, but certainly in san francisco it is an important part of the economy. i think a lot of the story has to do with building more housing. some of that housing needs to be affordable, but eldon more

housing overall will help slow down the price in rent increase. >> so you think it is the government? >> i think it is a much bigger issue than just the tech industry. that was the chief economist at truly. trulia. ia. ♪

>> this is the best of bloomberg west. seahawks rolled over the broncos for the first ever super bowl victory. what about the commercials? they cost $4 million for just a 32nd spot. which companies scored and which ffed? >> we saw in

the most robust way ever before thecompanies try to use super bowl ad. i am sure you can probably read my mind. budweiser's puppy love dad was really effective. a look at it again.et's take ? really activ you?, what about what did you like?

i think what marketers wanted to do was this apple pie, budweiser type of thing. adhought the bud light really showed the problem with so many simple as where it was piles of money to be spent because they were going to buy an ad and they thought they had to do something stupendous. i don't think that told a great story about the brand. it was just so contrived -- >> is at the en is up for whatever isco >> -- is it the ian up for whatever at? d? in the end arnold schwarzenegger shows up and they're playing table tennis? >> i thought that a lot of the ads didn't take the opportunity.

couple opportunities to introduce a new brand. i thought the maserati at did a terrific job introducing a brand, making people think of something different and taking advantage of a big stage without acknowledging the stage itself. >> we do agree on one thing because i liked that one too. let's take a listen. >> they have always been here. ,umbering in the schoolyards limping through the -- >> it was like a short film. >> it had me thinking of the david and goliath look. .t was that fantasy or notion i thought that tapped into that

really well. it took a moment to introduce a brand in a very big way. >> we are not experts. let's bring in an expert to discuss this. what did you think? beatsfavorite was how music and go daddy traded in across the demo. >> there was not a lot of sex and cleavage, the staples of a certain kind of ad. we didn't have fiat ads like last year or the go daddy danica patrick stripper thing. >> much to the dismay of -- >> ce it was like taking a real person and have her click her dog on

the air. >> it was bold and effect it. effective. in machine engineered from new york. she is a real person. >> high, ted. i quit. >> she just quit her job in front of 100 million people. >> yup. ownhe reality is that women or run many small and medium size businesses. > how do you think super bowl advertising compared this year to years past? one has been able to top the apple ad from a few years past. at the numbers. 100 million people all in one

place. >> trying to get more eyeball time out of your $4 million. the bud light ad tried really hard to do that. a lot of people had that experience very moody think with using social media in the best way? >> some of the previews of the ads were the best. i thought the three minute preview was that her than the super bowl ad. there are techniques to get a conversation going during the event and before the event. across the board we saw innovations we have never seen before. andhat about j.c. penney the drunk tweet? >> i knew that would come up. it was not the most profound message possible, but they did something interesting and pushed the limit. matter of't just a throwing up twitter, but it was trying to get people from that tv and get more time with them.

does the multiplier work in advertising? >> it does. i was live tweeting and got tweets back from wonderful pistachios. >> are people shopping at jcpenney because of the drunk tweets? >> it is hard to get attention and i think attention matters. the question is how much it matters. it is hard to know for sure. >> that was the ceo and founder of right role with cory johnson -- of bright role with cory johnson. ♪

>> facebook turns 10 years old this week. the company founded in harvard dorm room now average is 750 million users every day.

here are some of facebook's most memorable moments over the last decade. ♪ >> the facebook was started in 2004 as a harvard only social network. by years and it had a million active users nationwide. its meteoric success proctored its founders to drop out of harvard and had west. there, the facebook became facebook. in 2005 it had grown to support more than 800 college networks and ended the year with 6 million active users. by 2006, facebook opened its doors to anybody with a valid e-mail address. it also launched a news feed, bringing users back on a regular basis. users ship shot up to 50 million. 2008, users nearly trip and

to 145 million. in 2009, it was a good year to like facebook where did the now infamous button was introduced and mark zuckerberg challenged himself to wear a tie for the whole year. facebook supersized in 2010. users increased to 608 million. in 2000 11, facebook introduced timeline and the company was valued at $50 billion. by the end of 2013, facebook 300ers had saved more than petabytes. this year, facebook celebrates continues to grow with its market cap of more than $150 billion.

it for this edition of the best of bloomberg west. remember you can watch a streaming on your phone, your tablet and bloomberg.com as well as apple tv as well. see you next week. ♪

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