>> live from pier three in san francisco, welcome to "bloomberg west." our focus is the innovation,

technology, and the future of business. we are talking about yahoo! and yelp forming a big partnership and we don't know how it will work. it is part of the yahoo! push to keep and attract users. long time, sawa local is their opportunity. they were going to be the ones that were going to be the yellow pages of the internet. >> they have not gotten it quite right. >> when they launch their business, it was supposed to be the yellow pages of the internet and they look at local. they would index the web that are in is more local businesses came on the web, that would be with they did. on some level, they are admitting they cannot get there and yelp >> got there much faster. >>i'm curious how it will play out. i don't need a search engine to get me to yelp. i can search for restaurants wherever i want. i'm wondering what the motivation is here on both

companies. how is it a positive for both parties? >> yahoo! has a bigger platform than yelp. their homepage reaches more he will then yelp and yahoo! mail and other categories of yahoo!, they reach more people thanyelp kendrys by themselves. the revenue growth that yelp has seen in local business has been impressive. they just reported last week and it showed 71% year-over-year revenue growth in the local advertising business. yelp has feet on the ground of their opening up doors to get listings in ways yahoo! and no one else has been asked successful. >> their relationship changed tremendously. listings of the top of google but on the right side of the page, there are google-specific restaurant

reviews. yahoo! is at the bottom of the pile. let me bring in brian blair. he covers yelp and joins us from stamford, connecticut. how exactly do you think this will work? >> i think it will be very similar to what we see when we searched yahoo! instead of seeing the local ads, we will see yelp listed at the top. yelp is a strong brand and i think it will bidding an added degree of intelligence to yahoo! search. i think it could help drive people to use yahoo! search because it will make it smarter. it is a much more social thing. there are results created by the users in ways that yahoo! has never has success. + is not really happening either. >> we saw apple do this about 18

months ago with their mobile map product on ios. they started building in yelp reviews. when you search for a variety of services, if that service had been reviewed by yelp users, you saw two or three reviews. for apple, it added intelligence instead of just searching for any type of business but it was fantastic for yelp which was reflected in the stock price. it really drew a lot of new have 53 yelp who now million unique global users per month which is half of their 120 million unique switches substantial. >> how has yelp's business been affected by the changes at google, elevating the reviews? how has that impacted yelp? >> i think it was 2011 that google bought a gap. there is concern that this would business.p's

it has not had any impact largely because so much of the growth that yelp has seen has come from the mobile side. into apple maps has been one of the greatest things that has happened for them. it has helped grow the brand that made it a familiar name not just in the u.s. but international markets as well. there really has been no impact and that's why this is interesting. this will further push the yelp brand out to the it hundred million users of google which is a substantial opportunity for yelp. yelp already has a partnership with microsoft and bing. official tie up necessary? >> people don't use bing. it's gotten bigger and more

popular as a search platform but yahoo! still is the mammoth. 800 million users across all of the yahoo! sites. 350 million of those are mobile. until we see this project, we don't know what the impact will be. i think we will see this as a push in mobile were yelp has been strong and yahoo! hopes to continue to grow. i think we will see this really tie in nicely in the mobile environment which would be great for yahoo! and yelp. >> do we pay too much attention to groupon? i think groupon feels more like a fat. i think everybody was talking about that a couple of years ago and it still around and some people still use it but i think that's more of a fad and yelp is a platform that is here to stay and is still really in the early innings of a long lifecycle. this last quarter report for yelp, they talked about how

people are using it not just to search for things that they are clicking to call businesses through the platform. they use the app is a mechanism to get directly to businesses. that is a very meaningful trend. they highlighted that on the call but it speaks to a big future for yelp. >> i do that myself. it's so much. we will be following up on how exactly this partnership between the two companies will work. a big interview on bloomberg tv next hour. that 2:00 eastern time this afternoon, peter cook will be sitting down exclusively with lockheed martin ceo marilyn hewson. more trouble for bitcoin. fans are taking their anger out on their apple iphones next. ♪

>> welcome back to "bloomberg

west." activist investor carl icon is ending his campaign to get apple to buy back 50 billion dollars in stock this year. an advisory firm recommended that shareholders vote against his buyback for postal and after apple bought back an additional $14 billion in stock recently. icahn wrties - tim cook got a lot of flack for going to dinner with carl i can. what does this say about the result of their conversation? >> i think they can both claim a little victory if carl icahn is backing off and he says he got what he wants and apple was able not to do is pushing for. the bigger context is that tim is -- tim cook has shown big

shareholders that he can give them some of what they want. >> there was some aggressiveness , the notion that they purchased so much after the recent drop in the stock shows they were not just nibbling at this. many companies announce your buybacks and don't do them. >> it was during a time when the -- iphone sales came in a little less than people expected. year, david einhorn -- >> the same kind of thing. is when theyok initiated the big dividends. this is one of the largest buyback programs ever. there is something to be said for that. >> is this the end of icahn making a stir about apple? >> i would not err on the side

of him being quiet about much. for the time being, it seems to be that way but if he gets to a point where he thinks there is money to be returned, i'm sure he will go to twitter or wherever. >> he also owns less than one percent of a position. he could not actually make them do anything. he can go to twitter all he wants but he is in no position. iss will get involved and convince pension funds and mutual funds who have to vote whichever way they go by losing that vote, he lost the battle. >> he probably saw which way does vote was going to go. the same time, he was able to prod apple and why they decided to do this whether it was because of him or not, there is no doubt that carl icahn brought the issue back up to the

surface. it comes up and down for apple based on the amount of cash they generate. >> thank you. we are talking about bitcoin where troubles are still mounting. prices are plunging again today the biggestbased bitcoin exchange says it is halting bitcoin withdrawals. you can take out cash. it clarified the problem and what is going on saying the , itlem is not limited affects all transactions where bitcoins are being sent to a third party. apple has banned downloads of its most popular digital currency causing major backlash from the bitcoin community. matt miller covers bitcoin for us from new york. people are smashing their iphones because they don't like this? what's going on here? >> that has become a meme.

arench of redditors smashing their iphones and they switched over to android phones and most people in the bitcoin community have already been fairly apple averse but there are some people who like to make cool videos and destroy old technology. there is a guy smacking around his iphone 5 and someone else shooting a 4s. he was a pretty verbal shot. that appleeing is has taken a block chain off of its ecosystem and it's the mostly -- is the most widely is bitcoin while it out there. we spoke to the block chain ceo earlier today on market makers. he says he got one e-mail from the do not reply address at apple and they said there were unresolved issues. he does not know of any but they removed block chain from their ecosystem and since has not been

able to contact anyone at apple. i suggested he call tim cook or e-mail him. i don't think he has his number. right now, anyone who uses block chain will not be able to do it on apple. to forcee likely bitcoin users to use an android phone than it is to force iphone users to stop thinking about bitcoin. >> apple has not commented on white block chain has been kicked out of the app store. >> it's got its own payment system. >> there are 200 other bitcoinapps in the app store. >> but not really wallace. -- wallets. most of the other apps cannot be used to send and receive bitcoin. you cannot use them to go out and shop with them. that apple has its own payment system but i can't imagine any other reason why they would lock the block chain app. it's weird that apple has become

the giant death star of information where they are supersecret and do not tell anyone anything and refused to think different. does not make sense to the bitcoin community and it is confusing to consumers. interesting that in some ways it was clarified what the issues were but it is not that clear. they say it's an issue not x and it's amt. go problem for other wallets but it's a specific issue. i think they just have a problem with their software. >> i wonder how much of the collapse in bitcoin price had to do with russia and not being able to use it there. >> the russians abandoned the use of bitcoin which is not a surprise. it's no longer a communist country but it is still a command economy. you are allowed to be gator either.

debt to be gay there either. they want control as many of the variables as they possibly can. vladimir putin wanted control over the variables in the economy and the means controlling the currency. the same thing is happening with the chinese. they have had a regulatory crack down on bitcoin. >> thank you. coming up, we will go to l.a. for a story making waves on the parodyast, a starbucks called dumpster box has sprouted in l.a. and we will go right there with jon erlichman come in next. ♪

>> welcome back.

the big story on the west coast is getting a lot of attention especially on social media. a starbucks parody shop called dumb starbucks popped up in l.a. over the weekend. coffee and pastries are free. i'm wondering if they are actually serving starbucks coffee or serving not good coffee for free? jon is there to investigate. how is the coffee? >> i have been waiting in line seriously for more than one hour and i still don't have my coffee. my producer has to take my spot. this is one of the weirdest stories we have done. you sit in line with people and ask what you are here.

they say i heard about on the radio. they wanted to check it out. it is free coffee. maybe that gets the appeal for people to come here. i think they're more interested in seeing this dumb starbucks. any idea who is behind this? that is one of the favorite conversation points in line. is a lot of talk online about the possibility of maybe this being tied to an art installation. this is hollywood. we are pretty close to hollywood. maybe it is a tv production. people are wondering if it is a particular comedy central show. there are claims that maybe there were video cameras inside. i thought i saw one but i was

not quite sure. i will have to go back and and be more than a dumb reporter to find out. i'm hoping they fix the grande thing. the dumbest thing at starbucks as they call the small one a grande. >> the middle one is a grande. does that make sense? done, from thes , the dumb bagels and pastries they've got to the dumb different sizes of coffee. it highlights that this is a brand where everyone has always joked about the difference in sizes. starbucks does not think this is so funny but starbucks does not want to look like the cruel operation that is smashing down. we have not seen armies of lawyers around here saying --

this might have to do with who is behind this. is it for a tv show? maybe they will let it go for now. >> this is all over social media. tweeted they sold their coffee for $20. >> it seems dumb right there. >> why not? extra money. it would have saved me time in line of i had bought from some guy coming out. you highlighted the social media. you've got an equal grouping of traditional media here, dumb reporters like me, who were covering this and you've got people who are tweeting and taking pictures and having a blast. they just heard about it and they have come and i think that's the power of one little back and geteliz

the world's attention very quickly with dumb coffee. >> are we done? >> i certainly am. outside dumbman, starbucks, thank you so much. more of " herbert west" after this break when we -- more of "bloomberg west." ♪ >> bloomberg television is "on the markets." let's get you caught up on the action. there is not that much action in the markets. if you look at the individual indexes, the s&p is not change but the nasdaq is gaining 1/3 of one percent. shares of tesla hit an all-time high today, nearing the $200 for sure mark. so shares are on the rise after china announced the smaller than

expected reduction in subsidies for electric cars. they will pay more for you to buy a tesla. ♪

>> you are watching "bloomberg west." ollie baba is trying to take full control of chinese mapping company auto map, offering to buy 72% of the company it does not already own. the deal is valued at 1.6 billion dollars and alley that is made them number of back was agents this past year. tc is having trouble selling smartphones and first-quarter sales could be the lowest since 2009. a widerso forecasting than estimate of loss and bloomberg has reported the latest version of the flagship

htc 1 could be released soon in an effort to jumpstart sales. mark zuckerberg and his wife were the nations number one philanthropists last year. the couple gave 18 million facebook shares to the silicon valley immunity organization. the shares are worth more than 1.1 billion dollars. it's been a rough weekend for the aol chief tim armstrong and some people he singled out. he apologized for comments he made on employee conference call last week while explaining his decision to tweak the company's 401(k) benefits. he said the company had to save money in part because -- the mother of one of those babies wrote a column and she wrote --

edmund lee covers aol and joins us from new york. i know you have been talking with them. tim armstrong has apologized. what exactly are you hearing from the company now? >> the company says they are not commenting be on the statement he put out where he apologized. on top of that, the guidance they are giving us is tim wanted to keep the health care and that's why he wanted to cut the for one k benefits which she has now reversed. they are trying to give his he wants to keep the health care which is true. the fact that he happened to single out these families is what is rubbing everyone the wrong way as if they were

responsible for those cuts which is not really the case. that was the prevailing interpretation. >> the family story is so heartbreaking. it is also miraculous if you leave her column. her husband works at the huffington post. she said at the end that our daughter has already overcome more setbacks the most of us have endured in the span of aryl lives. -- in the span of our lives this the kind of regrettable but forgivable mistake a ceo can make or is this something that shows that maybe tim armstrong should not be in this job? >> this is not the first time he has put his foot in it. six months ago, he publicly fired an employee when there were a bunch of other staffers listening in. he apologized for that as well. executives -- i also

cover rupert murdoch -- he is an outspoken person as well. that is not the type of thing that takes your job away necessarily. as journalists, we like it when ceo's are more honest and upfront. this does not put a bad spell on him but he's got to learn to not talk too much. when i interviewed tim armstrong, i found him to be sort of a straight shooter. when he took over aol, the idea was that he was going to bring refreshing change to the company because of his no-nonsense approach and he has made some trichet it missteps. what kind of a leader is he actually? overall, has he been good for aol? >> overall, he has been and turned the company around and improve the advertising and transform the company from a dial-up service -- they still have 2.5 million people but he has transported them from that

to a premium publishing contents player that gets big advertising dollars. credit to him for that and he has been very upfront and tried to be refreshing in terms of what he has tried to do with the company. he always gets on the phone with journalists or tries to when we have big questions. has been a help in terms of understanding the strategy. if you are an investor, it's good to see that up and. lee, thank you so much. aol acquired the online identity a week after.me the sites launch and two years later, the founders bought back the company at a fraction of the cost aol paid for it. a year after that buyback, there was impressive user growth. did aol missed the boat? cory johnson has more. do?hat can aol

talk to me about how this happened. aol acquires your business. it does not find a way to monetize it, what was it like? >> when they bought her business, they had just gone public. they were exploring a lot of different things. they took a chance on us and we were four days old. they had been working on the product for about four months. that their focus was on media and our focus was on a software service provider. it was not a great fit so we worked with them and were able to spin it out. >> what was tim conrad like? like?as tim armstrong it speaks a lot to what kind of ceo he is. he does with great

ceo's do, take a lot of risks theis quick to assess situation but we were not a fad. i think it was hard for him to let us spin bike out. >> he was willing to buy it. you should have known. >> i think it was a good risk that he took another still -- he is still an equity holder in the companies i think it will work out well and long-term. >> what were you able to do that they were not able to do? >> we were able to slow down and focus less on customer acquisition and solve the fundamental problem around engagement. what reason do you have to sign into your page. it's a great page for presenting herself. we had to turn it into something where it's a tool for discovering people interested in you, people you have things in common with and enable you to forge connections with those people. that was our entire focus in 2013. under aol, itk

was a product not getting a development focus? >> they give us space to do the development correctly but there were not integration opportunities. we were a little bit of an island off the coast. it felt like we would be better served if we were independent and focus more on the engagement --ect then just on growing using motion with progress. motion withng progress, acquiring customers for the sake of acquiring customers make no. you want to acquire customers and get them on your product and using it and getting value out of it. those become high-quality customers. >> we see this over and over again particularly right now. we've got companies that have growing user numbers. even yahoo! has seen growing user numbers that the quality of the user experience may not be very good. >> that's different. engagement and monetization don't always go hand-in-hand.

on what type of value you can derive from use -- your user base. does not mean there is not a lag between getting engaged users in creating that value. we don't havetme a revenue model in place. ishave a clear sense but now not the right time. the right time is probably at the end of the this year. >> you had patients. >> thank u so much. slappy birds is gone and fans are furious. we will talk about pulling the app coming up. ♪

>> flappy birds fans are furious

after the mobile game was pulled from the apple and google app stores over the weekend. the vietnamese developer removed it himself -- cliff edwardsn who covers gaming. now i want to play because it is not available. it was the top app in the apple app store. it was again where you navigated and it was similar to super mario brothers. a simple game and very easy graphics. it was ridiculously hard. it was one of those games that people were addicted to the suddenly took off this year. it has been around since 2013. >> the guy said he was making $350,000 per way. >> aren't games supposed to be hard?

>> it's one of those games where it is really hard. you can buy your way through on these free games. >> it's like life. >> exactly, you could not. you make your way through this game and there was no way to buy currency or by any cheats to help you through the game. >> in addition to the game being too hard, he was criticized for copying other game makers? >> there were some rumors that nintendo is planning to sue them. nintendo denied that. we don't think that's true as far as we know. designing games.

activision can spend $100 million developing game over 2.5 years and it can be ready and or this thing it or other things it's about gameplay. a this game is a copy of nintendo game from 15 years ago. the sky developed this game in the course of a couple of hours. nintendo with five thousand employees is struggling to come up with games that appeal to people. zynga not just sell it to or some other company? why take it off the app store? >> you can easily copy this and there are already seven copies on it online. this guy was just pressured by it. he felt with all the tweets and you tube postings, there were even death threats and whether they were fun or not because the game was so hard and they were

blaming him. >> maybe there were other birds giving him death threats. >> exactly. comes backsee if it to life. thank you so much. do not go away,, this is really cool. >> there i am. ♪

>> welcome back to "bloomberg west." if you ever wanted to be an astronaut or wondered what it felt like, have zero gravity, cory johnson can tell you. >> there's a company called zero

g and they signed this partnership with virgin galactic who will bring people into outer space. g isan practice and zero offering the experience to fly people in these parabolic spaceflights known as the vomit comet. i am terrified of heights. willing to pay $5,000 to get the same experience i got. check it out. i'm cory johnson and right now, this is one of the most enjoyable moments of my life. it was not always that way. a few minutes ago, i looked like this. i am down in cape canaveral on my way to experience zero gravity with a company called zero g. i'm exactly the wrong person to be doing this. has partnered up with richard branson plus virgin galactic for passengers who have already purchased tickets on one of his suborbital flights to get

acclimated to the experience of weightlessness. zero g is offering it to anyone else for $5,000. feet.ane climbs to 24,000 this was over the gulf of mexico and goes into a series of parabolic arcs. the aircraft climbs in an extreme angle, 45 degrees and feels like 1.8 g's. dive in an extreme inle for half a minute and that moment, passengers experience weightlessness and then they do it again and again. there is a reason this plane is known as the vomit comet. >> less than four percent of our people do that. it's very rare. >> this is one of our guys and i will need america will in handholding. of ais is becoming more reality. these countries are talking

about training and bringing their customers on board to experience microgravity. it is a wide open market being created now. >> that brings us to where we all start. this is crazy. it's unlike anything. this experience comes at a price. version galactic ticket costs to $150,000 for six minutes of weightlessness. that's $694 each second. charging $5,000 per head which is only $11 per second. is weightlessness on the cheap. they have their eyes on more than thrill seekers. there is some big money coming in from nasa and several companies are looking for a lucrative contract from the increasingly outsourced space agency. >> the government space race is over. the capitalist space race is on

it will all be private companies now. >> and liftoff. >> nasa is paying the russians about $70 million each time u.s. astronaut hitches a ride on the international space station. a private space maker says they will charge 90,000% orderable -- sub orbital flights and jeff bezos says he will be doing the same thing with lou origin. -- blue origin. paying $5,000 might seem like a think ofin that -- but the perks come you get to keep the flight suit and a set of twitter actors making you the envy of your friends. can you put a price on that? me, one giant for leap for bloomberg television. >> you were not scared? >> i am a wimp. i was terrified.

for the greater glory, i will do all kinds of stuff. >> what do you feel like the moment it happens? >> i thought it might feel like you are swimming. it was very different. it was total weightlessness. you push with one finger against the wall of the plane and you go flying to the other side. >> does your stomach drop like a roller coaster? >> when the plane went for the big climb and then went through the turn, you would feel that. only one person on the flight got sick and i'm happy it was not me. >> who were all those people? >> they were random people who have paid. some people one contest. there was a couple that were going all over the country and doing different things in their wedding outfits. >> is the demand for this thing intense? >> they fly all over the country's $5,000 per shot. with this new space race, lots of other people will start to think about what it is like to be in space.

for the value space investor, it's probably a better deal. >> i don't think i would accept any amount of money to do something like this. better you than me. it is time to focus on one number that tells a whole lot. jon erlichman is at dumpster box in l.a. or it what you have? >> the number is one, i finally got my dumb starbucks coffee. you guys have been talking about online you can buy all sorts of dumb starbucks merchandise. that forbucks tweeted now, the only official visa merchandise is this fancy coffee cup. at least they got your name right. they are not that dumb. >> thank you, yes. they are not advising people to drink this coffee which is ok and take the vomit, but they could do that, you might have

some competition. they have put out the most frequently asked dumb questions. that is going for $75 on ebay. >> that is dumb. >> they have run out of photocopies or. >> we are the dumb people talking about it. will this end up on the tonight show? who is behind this? >> you just blew my mind. you go, we introduce a new angle on where the back story comes from there . i will say this is tonight show related. >> thank you both and thank you all for watching this edition of "bloomberg west." >> we are all a little dumber for that. >> we will be back tomorrow. ♪

>> from bloomberg world headquarters in new york, i'm mark crumpton and this is "bottom line." tonight, a bloomberg exclusive with lockheed martin ceo, maryland houston. then a look at the debt limit debate two weeks before another deadline. and an l.a. coffee shop takes a shot at starbucks. ♪ to our viewers here in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making ad